Buying a condominium is a lifestyle choice. Maybe you don’t want to do yard work anymore, or you want the feel of extra security, or you can’t yet afford to buy the house of your dreams. Whatever the reason, here are 6 tips on how to buy a condo.
How to buy a condo
- Do you want to be in a woodframe or concrete building? Concrete is much quieter, often ensuring you don’t hear every footstep or conversation taking place next door, above or below you.
- How much are the strata fees and what do they cover? This varies from property to property, so be sure you understand exactly what you’ll be paying for each month. Generally strata fees cover the cost of maintaining common areas, water, sewer and garbage but they sometimes include gas or hydro for the individual units, and less often, cable tv/internet access.
- Do you want to be downtown or in a residential neighborhood? Prices will vary depending on the area you choose, so talk to your real estate agent about what your budget will buy and what areas you’re likely to find something in.
- How much is in the contingency reserve fund? This covers the cost of replacing large building components such as the roof or boiler systems. If the fund is low and something needs replacing, there will often be a “special assessment” levied to cover the costs of the needed item. That assessment is a lump sum payment you’ll be expected to come up with at the time of the levy.
- Is there a depreciation report? If not, why not? If so, does the strata have a plan to follow any of the recommendations or are they taking a “wait and see” approach to the repairs. The depreciation report is a long term look, usually 25 to 30 years, at all of the building components, their remaining life expectancy and a ballpark figure for the cost to replace each item. If there’s a large number of items expected to fail in the near future, you can likely expect to receive a special assessment which could be a substantial amount.
- Is the property self-managed by the strata council and residents, or is there a property management company involved? Self-managed properties often expect the residents to volunteer for tasks such as yard maintenance or “handyman” type projects. If you’re not prepared to volunteer, a self-managed property may not be the best choice for you.
While this is not a complete list of things to consider when buying a condo, it contains a few key factors. Arm yourself with as much information as possible before committing to a purchase as there can be other financial considerations down the road you may not be expecting. You should also review two years of minutes and financial statements to get an accurate idea of the issues and financial condition of the property.