Condo/Townhouse Buyers Guide

Should I Buy a Condo/Townhouse? 

As single family home prices have risen, many consumers have been looking to condominiums or townhouses as an alternative. First time buyers like the lower prices, which makes entry into the real estate ownership market easier. Seniors like the low maintenance aspect and the ability to be in a community catering to their lifestyle. Others like the security advantages that the complex provides, especially for those who travel frequently.


Condo/Townhouse Concept

When you purchase a condominium/townhouse, you purchase and have title to your individual unit in a multi-unit property, and share in the ownership of the land and other common property with all the other unit owners.  The type of common property varies depending on the type of condominium - high rise or townhouse for example - and would include hallways, elevators, heating system, parking structures, landscaped areas, recreation areas etc.

A condominium or townhouse is a specific form of ownership and does not describe a type of building.

One of the great advantages to owning a condominium or townhouse is that in most cases, it is owner-occupied and owner run.  Owners ensure their investment is maintained and regard improvements as an investment which increases the value of their individual unit.


Advantages and Disadvantages of Owning a Condo/Townhouse

If a winter holiday is part of your lifestyle, you can leave with your mind at ease, without the worry of a driveway to clear. In the summer the grass will be cut, you won't have any exterior painting projects or fence repairs to look after.

Condo/Townhouse projects are now part of most communities which means being able to stay in the same location where you were a homeowner.  Some condo/Townhouse projects are more successful than others in terms of capital appreciation and length of time to sell. Here are some of the advantages and disadvantages of condo/Townhouse ownership:

Advantages 

  • Protection from rent increases
  • Monthly cost of owning is often less than renting
  • Easy financing
  • Wide range of property types, prices, locations, sizes and amenities available
  • Availability of amenities such as swimming pool, tennis courts, hot tubs, saunas, whirlpools, exercise facilities, health spas, sun decks, community rooms (the cost of which may otherwise not be affordable)
  • You are investing in your own home and build equity
  • Appreciation of capital value
  • Pride of ownership
  • Freedom to make interior changes and enhancements to your unit
  • Enhanced security availability and peace of mind when leaving unit unattended
  • Maintenance and upkeep is kept down or eliminated
  • Security of tenure and permanent occupancy
  • Cost is often less than single family home due to efficient use of land and economies of scale
  • Very marketable
  • Wide range of prices depending on features, luxury and location
  • Sense of community due to permanence of residents and resulting social activity
  • Developments available geared to a specific lifestyle (restrictions on age, pets, children etc.)
  • Participation of owners in operation of development including budgeting, decision making, determination of rules and by-laws.

Disadvantages

  • Some loss of freedom may be experienced due to rules and by-laws e.g. type of pets allowed, right to rent unit etc.
  • Due to a larger concentration of people you may experience problems with the "5  p's”, pets, parties, parking, personality and people.
  • Money is tied up in equity
  • You may be paying for some amenities you never use
  • Boards of directors vary in terms of skill and effectiveness


Strata Fees 

As a unit owner you will be responsible for your share of expenses known as strata fees. These are set out in the strata declaration. It describes what expenses are to be shared and in what proportion. This can be equal or unequal in cases where they are based on the comparative size of the units.

The exterior and common area maintenance of your condo/townhouse is covered by your strata fee. The fees are usually paid monthly in accordance with the budgeted expenses. Of course if you have more amenities such as a swimming pool, on-site security personnel etc. your fees will reflect the extra services.


Reserve Fund 

Reserve or contingency funds are set up by the strata corporation to cover major or unexpected expenses. The developer of a new condominium usually sets up a fund which is then turned over to the strata. The fund becomes an asset of the strata and each year the unit owners decide on what the level should be. The individual owner does not have any rights to the Reserve Fund.


Questions You Should Ask When Buying a Condo/Townhouse

Pricing

  • Is the unit competitively priced with others currently on the market?
  • Have you taken into account the amenities offered?
  • What is the resale potential?
  • Have the units appreciated?
  • Are other unit owners in your financial bracket? If higher they may vote for services you can not afford, if lower they may vote down changes you would like to see.

 

Nav Khangura Personal Real Estate Corporation
Nav Khangura Personal Real Estate Corporation
REALTOR®