Tag Archives: building maintenance
Budget wisely for first homeownership
By Helen Morris, National Post
Moving into your own place can be great. Securing a mortgage and paying out all of the extra closing costs will make you study your finances like never before. While the mortgage payments, and perhaps also condo fees, will be the largest monthly outgoing, planning ahead and having a safety net can help reduce some of the more unexpected shocks to your budget in the first couple of years of ownership.
“Most times the client doesn’t see that far,” says John Filice, a mortgage broker with Invis in Toronto. “They just want to get the mortgage approval and know they can start shopping for a home.”
Mr. Filice says explaining the pre-approval process to clients gives them a better idea of the true cost of home ownership.
Says Trevor LeDrew, regional director with Investors Group in Windsor: “Your total cost of carrying the home: principal, interest payments … factoring in taxes, heating expenses, condo fees — try to keep that around 30% to 32% [of gross income].” He adds: “Your entire monthly debt load, when you start factoring in credit cards, cars and so forth, should not exceed 40%. If you can stay in those parameters, the probability of having a positive experience buying a first-time home goes up significantly.”
Budget and plan for a number of costs. For instance, the cost of furniture and window coverings can be shocking, Mr. Filice says.
As well, “If you don’t have a home inspection, there’s always some kind of work that sneaks up on you even if it’s just getting the furnace cleaned every two years,” he says. “[Most first-time homeowners] are not aware of those kinds of mechanical upkeep costs.”
If you are buying a resale condo, looking at the status certificate will show some of the costs of upcoming building maintenance. It may also be worth your while to hire a home inspector to flag current and future maintenance costs.
“That buyer inspection will typically outline things that need immediate attention, like water damage,” says Andrew Bodnar, sales representative with Re/Max Condos Plus brokerage in Toronto. “The inspector will often put in things that should be looked at again in another three to six months.”
Mr. LeDrew says many people are keen to put every penny they can into their deposit and to pay down their mortgages as fast as possible. However, he says that as long as there was a 20% or more down payment (avoiding mortgage-loan insurance), it may be prudent to hold back some of the money during the first couple of years of ownership to give yourself a safety net to pay unexpected bills or meet a shortfall if any budgeting was off.
“That’s one year of additional interest on that down payment that I would be forgoing, but on the peace of mind side, it’s something to weigh if you’re going to get through that first year,” Mr. LeDrew says. “You may be better off saying, ‘I’ll put that [onto my mortgage], but I’ll do that on my first anniversary.’ “
Mr. Filice says if a client is planning to buy at his maximum and he has high debt levels, he often suggests he opts for a cheaper home to give themselves some breathing space for those expensive first few years of ownership.
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Contact the Jeffrey Team for more information – 416-388-1960
Laurin & Natalie Jeffrey are Toronto Realtors with Century 21 Regal Realty.
They did not write these articles, they just reproduce them here for people
who are interested in Toronto real estate. They do not work for any builders.
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The great condo clash
Helen Morris – National Post
When it comes time to sell your condo, you want to make sure it stands out from the crowd and you get the best possible price. If a new condo building has just been completed next door to your older place, the new units will be competing to catch the eye of buyers. A number of factors will determine if the new place will inadvertently force you to reduce your price or make it harder to sell.
“Is the new building cutting out your view? It’s back to location, location, location,” says Ed Saxe, president of the Ontario Association Appraisal Institute of Canada. “In Toronto, if your existing building has a view of the waterfront and they put up a 30-storey building in front of you, most purchasers or homeowners would say, ‘Now my value has decreased because there goes my view.’ “
If the new building does not have a physical impact on your place, then it need not damage the prospects of your sale.
“A lot of times [in today's] market the square footage price is actually going up. It may cost more to get the same amount of square feet today than it did when your building went up,” says Andrew Bodnar, sales representative with Re/Max Condos Plus brokerage in Toronto. “One of the positive benefits [your older place has] is that typically older layouts will be larger.”
Mr. Bodnar says the age, style and condition of your older condo will affect the level of interest from buyers; not all buyers will favour brand new units.
“Inventory is one of the big things that … we don’t have. If you’re trying to buy a unit in the city right now, it would be common to get into multiple offers,” Mr. Bodnar says. “If you’ve got a place that’s available for resale now, there’s a lot of buyers on the market.”
Another selling point for your resale place is that you can provide buyers with a clear track record of condo fees and maintenance history.
“On the new building, maintenance-fee pricing may work for the first year then they realize they don’t have enough and [fees increase],” Mr. Saxe says. “If you look at your 20-year-old building [you can see] if they haven’t built up the reserve fund properly.”
Mr. Saxe says the size and type of accommodation, amenities, parking facilities and other attributes of your resale condo may be so different from the new place next door that you could end up marketing your place to a totally different set of buyers and not be in direct competition at all.
Mr. Saxe says the price and saleability of your condo is much more likely to be affected if it is part of phase one of a development and phase three has just been completed.
“Phase one to phase three, your amenities are basically the same,” Mr. Saxe says.
In a downward market, Mr. Saxe says resale places may struggle against competitively priced new, broadly similar, units next door. Equally if the market has risen, your slightly older, perhaps less expensive place, could be just what the Toronto condo buyer is looking for.
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Contact the Jeffrey Team for more information – 416-388-1960
Laurin & Natalie Jeffrey are Toronto Realtors with Century 21 Regal Realty.
They did not write these articles, they just reproduce them here for people
who are interested in Toronto real estate. They do not work for any builders.
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