Condos come with their own costs
OTTAWA — Buying a condominium may be an affordable way for many first-time homebuyers in Canada’s big cities to enter the real estate market.
But the condo market comes with its own set of costs that are different than buying a house.
Purchasing a condo should start with finding a realtor who specializes in the neighbourhoods you’re interested in and knows the buildings, says Vancouver realtor Mike Stewart.
An experienced agent, Stewart says, will be able to steer people away from problem buildings where a bargain price may be cheap for a reason.
“You never want to buy the best unit in the worst building because an individual property owner can do nothing effectively to change what’s happening overall in a building,” Stewart says.
“But the inverse is true. If you buy the worst unit in the best building, you can always fix your unit. But you can’t fix the building.”
Condos are generally cheaper than houses, and in markets such as Victoria, Vancouver and Toronto, they may be the only option for a first-time buyer.
There may not be the same maintenance chores with a condo that come with owning a house, but that doesn’t mean there isn’t a cost. Condo owners may not have to fix minor problems around the building themselves, but someone does and they have to be paid.
Stewart says all buildings have issues, so what is important is that the condo’s strata council, which manages the building, is transparent and proactive about dealing with the problems.
“Good maintenance and timely repairs maintain the value of the property, which is the value of everybody’s investment,” he said.
Monthly condo fees are generally related to the size of the unit. They may sometimes also be based on non-square-footage features that affect the value of a unit, such as what floor it is on.
For those buying a condo, they should understand the monthly maintenance fees, what they cover and how much they are expected to increase.
Ottawa lawyer Leslie Kirk, who specializes in real estate, says it is important to review the condo documents so people understand the financial health of the building and ensure the strata council is meeting its required obligations.
An inadequate reserve fund could mean owners might have to cough up cash for a special assessment to pay for things such as windows being replaced or major repairs to common elements of the building.
Those living in a house may be able to put something off until they have the money, but not so for condo owners. “You don’t necessarily get to choose when you’re going to make a major repair in a condo,” Kirk says.
Condos may also have rules about what people can and cannot do, such as restrictions on the size and number of pets, whether or not they can install hardwood floors or if they can put a barbecue on the balcony. “There’s also some condos now that ban smoking everywhere, including inside the units,” Kirk said.
Ottawa real estate sales representative Tammy Laverty says choosing a condo is about what is best for you.
“If you have a big family and you want a big yard then a condo is probably not for you,” she said.
“But maybe if you’re a firsttime homebuyer and buying a brand new home is overwhelming or you want to downsize or you’re really busy, a condominium is probably going to be a really great choice for you.”