Don't buy a condominium out of desperation or frustration because you can't afford your dream house. A condo should not be a conciliation prize.
Buyers should purchase a condominium with deliberate intention. A condo should be the obvious choice when the buyer understands how and why condominiums offer a viable real estate ownership option. Then, with professional guidance, the task is to discover which condominium complex and specific condo unit are the best housing and investment fit possible in the current market. A condo's positive features should hold the buyer's attention and spark imagination to ensure condo ownership is a completely positive experience.
There's no doubt that the relatively lower price tag common to condominiums is attractive. However, a condominium unit—high-rise suite, low-rise suite, loft, townhome, or work-live space—must be the best fit for the same real estate reasons that would apply when buying a comparable detached house.
When a condominium proves to be a bad fit, usually the misfit arises from poor buyer self-assessment and incomplete market research. We've all met the keen condo buyers who are more interested in cool loft lifestyles than in making sure their purchase increases in value and is a pleasure to live in. Then there's the decor-obsessed buyers who are so excited about working with an interior designer that they do not take time to explore how communal living according to condominium bylaws may restrict their plans.
Condominiums should not be bought out of frustration with the housing market, or buyers can end up with real estate that frustrates their lifestyle. Don't rush into a condo purchase because you're fed up with bidding wars. If you can't see the value when you examine condo complexities, then move on.
Condominiums come in an increasing array of shapes and sizes, across the price spectrum. Some include cars, boat docks and amenities that have historically been exclusive to those living in mansions. Buyers can buy two or more units and combine them. Resale buildings may offer prime locations and ample suite sizes that are typically only high-end purchases in new buildings. Twenty-first Century condos incorporate new technologies to save energy and create green living environments, so your new home can also reflect your strong environmental commitment.
Among the many advantages of condominiums are five key factors that are essential to a great fit and maximum condo benefits:
- Condominiums aren't free, but they can be priceless. Real estate costs money to buy and money to maintain. If you can't afford a house, maybe you can't afford a condo either. Expect fees, taxes, expenses to keep rising, just like rents and everything else. There are two important steps you can take to keep an eye on finances:
- Take an active role in the running of the condominium, so you can help with frugal thinking.
- Confirm that the unit can be rented out, in whole or part, temporarily or permanently. Not all condo units can be rented. At the same time, condos are popular investments, so decide whether you want to live in a building where investors own a significant proportion of units and rent them out?
- Each condominium is created by law. Condominiums are creatures of statute, which means they are created and defined by law, not by the structure of the buildings and units. Condominium bylaws dictate what owners can and cannot do. A condominium corporation and board oversee maintenance of the complex and preservation of investment value. Details vary according to provincial condo law, so don't be distracted by what you see or hear about condos in other provinces or countries. Learn as much as you can about the rights and responsibilities that your province dictates for condominium boards and owners. This degree of legal protection and recourse does not exist for owners of single family homes, so don't let your ignorance of the law undermine this advantage. Local condominium real estate professionals can fill you in on the special documentation and concerns involved when purchasing a unit in their area.
- Each condominium is unique. Make no assumptions. Know what “must-haves” define your unique lifestyle and financial needs. Ask a lot of questions and get details in writing—preferably in the offer and Agreement of Purchase and Sale. Which amenities are part of the common element that is shared by all condo unit owners? What types of units can be bought, i.e., cars, boat docks, commercial square footage, parking spaces...? For instance, buying a parking space can be a good investment even if you don't currently have a car. Which features reflect current buyer trends and which will help hold long-term value for the complex? Which amenities will you really use and which would be cheaper to have off site? For instance, swimming pools are wonderful but expensive features. Monthly condominium fees reflect the cost of running the whole building, including all the goodies you don't use.
- Condo's are ready-made, compact communities, Condo developers invest significant money, time, and expertise targeting a specific group of buyers for each condo project. Some target income and demographics, others lifestyles. Most condo sales programs accentuate aspects of the neighbourhood the project sits in. Does the developer hold buyer meetings before move in date, so new owners can meet and get busy networking? Is the financial range of buyers compatible enough that one side will not be battling to add luxury while the other is fixed on maintaining affordability? Is there enough diversity to keep the community attractive to new buyers a few years down the road. For instance, projects geared to age like 50 plus condos, offer amenities for that active lifestyle. In ten or twenty years, will new 50 plus buyers still value the complex?
- Acquire and exercise skills in committee-style living. Participating in management of the condominium will hone communication, financial, and business skills, or help you develop talents you did not know you had. If you consider working with others a great pleasure, you'll find “people value” in condos that can be hard to reproduce in subdivisions. Over long winters, built-in camaraderie can be a real plus.
Buy the right condo and that fit will also lead you down the road to your dream house.