Tag Archives: condo apartment
Check owner-to-renter ratio when buying a condo
By Ellen Roseman – Toronto Star Moneyville
Buying a house is a big learning experience for most of us, since we do it infrequently. Buying a condo presents even more challenges.
I always advise people to do lots of research, talk to neighbours and check the minutes of the condo board meetings. Don’t make an impulse purchase, as Jody White described doing in a MoneySense article, “Went for a coffee, came home with a condo.”
I recently talked to Peter C, a reader who bought a condo apartment in downtown Toronto before it was built. This was a first home purchase for the school teacher in his late 40s, who hoped to pay off his mortgage quickly and retire early.
So, how is he doing? What has he learned since moving into his unit two and a half years ago?
“The condo was a great decision,” he says. “I’m on an ambitious plan to pay off my mortgage in five years. Then it will truly be Freedom 55 for me.”
But if he had to do it over again, Peter would have checked out the ratio of renters to owners in his building on Carlton St. near Yonge St., an area popular with college and university students.
“I was disappointed in the large number of units reserved for student renters,” he tells me. “I was horrified when seeing the hordes of students moving into this building and then not caring for it, being loud and obnoxious.
“I remember calling a friend and saying how wonderfully quiet it was (noise is a VERY big issue with me), when a group of students appeared on the balcony below me at that exact moment, blasting music so loud it thumped its way through a foot of concrete and into my suite.”
It was a rough three months until the condo board was set up, he says. Once strict rules came in, the students moved out.
“I had them kicked out after two warnings,” Peter says about the noisemakers in the unit below him.
“I am very proud of my building and nothing angers me more than seeing absentee landlords renting out to these frat kids, who are completely oblivious and indifferent to the owners.”
Tough talk for a teacher? His students are eight years old, an age he enjoys. Loutish lads in their late teens are a different story.
In 2006, I did a column series on buying a condo and talked to Ulla Colgrass, who called herself “a semi-expert in condo buying, with three under my belt.” She preferred to buy an existing unit, rather than one that was under construction or in blueprint only.
It’s easier to check out an older building. You can wander in the halls, ride the elevators, speak to building staff and owners, trying to sniff out any problems.
Soundproofing can be an issue in newer buildings. And if you buy before construction is finished, you can’t walk around to see how loud everything is.
Condo expert Douglas Gray, author of 101 Streetsmart Condo Buying Tips for Canadians, recommends asking this question: “How many units are owner-occupied?” Beware if more than half the units are rented to tenants, who may not have the same pride of ownership.
Peter has other regrets about his condo purchase. The monthly fees were $250 when he moved in. Today, they’re $410.
In another column in my series, I warned that condo fees can almost double in the first three years if you’re buying a newly-built unit. Developers calculate the first year’s budget as tightly as possible, leading to significant fee increases when the condo board takes over.
Peter also wishes he took a variable-rate mortgage, rather than a four-year fixed-rate mortgage at 4.7%. But he’s devoting all his resources to paying off the mortgage quickly.
“I decided to live again like a poor student so I could be debt-free in five years,” he says.
Living like a student is one thing. But living with students is another. Make sure you know the percentage of owners versus renters before making a condo purchase.
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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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Condo living is not for everyone
Don’t ignore concerns about the building, the lifestyle or the way the complex is managed
By Inst. of Chartered Accountants
There are as many reasons for choosing condominium living as there are people who buy them. For some, it’s the location. Others want the amenities condos can offer, like exercise rooms, pools or tennis courts. Then there’s convenience – home ownership without the snow-shovelling, lawn-mowing or upkeep of a private residence.
But whatever the reason – convenience, location or facilities – it’s important to know what you can and cannot expect when you buy a condo … and what constitutes value in today’s real estate market.
Chartered Accountant Alenna Morresi-Emer is chief financial officer with Morrison Financial Services Limited. It’s a Toronto firm that provides CondoCorp Term Financing to condominium corporations who, due to unforeseen expenses, require assistance in repairing or maintaining their common elements. She’s had a great deal of experience assessing the physical and financial health of condos.
Here are Emer’s top seven tips to help ensure your decision to buy that condo is one you won’t regret.
1. Purchase a property that suits your needs and goals. Those will differ, Emer says, depending on whether you plan to live there for five years, 20 years, or to rent it to someone else.
2. Location, location, location. As with any real estate, it’s only as good as the neighbourhood. Is it convenient, safe, close to schools, transportation and services? It’s no bargain if no one wants it.
3. Convenience comes at a price. Condo owners pay monthly fees to maintain common elements, like the underground garages, hallways and lobbies and exercise facilities. There can be “special assessments” too. These are often substantial extra amounts that unit owners must pay for repairs or upgrades should the corporation not have sufficient reserve funds put aside to pay for them. Condominiums are run by an elected board of directors, Emer points out, and this board has the authority to impose such assessments if deemed necessary.
4. Yours, mine and ours. Know where the condo corporation’s financial responsibility ends and yours begins. Who pays for new windows if your unit needs them? If your townhouse has a backyard patio, where does your “exclusive use” end and the community’s begin? Can you build a fence or put in a rock garden?
5. Do your homework. Before a condo can be sold, it must have a “status certificate” that your lawyer can request. It will identify any liens against the property, current legal matters or upcoming increases in condo fees. Ask to see the financial statements. These will tell you if the corporation is financially sound, and if the unit owners are likely to face an increase in monthly maintenance fees or a special assessment. A reserve-fund study, which provides a 30-year projection of estimated repairs to the complex, will also follow the financial statements. Emer suggests you tour the property and speak to actual unit owners, too. Find out what issues they’re dealing with, how they make decisions and who the key players are.
6. Know the rules, and be prepared to abide by them. Condo by-laws will tell you if you can lease out your unit, use a barbeque or install a satellite dish on the outside wall. Even the out-facing colour of your drapes or window coverings is often regulated.
7. Condo life is community life. You’ll have to deal with different types of people, often in close proximity and in many different circumstances. Know what you’re prepared to live with, and for how long.
“Condo living is not for everyone,” Emer says. Don’t ignore concerns about the building, the lifestyle or the way the complex is managed. It’s far better to walk away than invest your money, time and energy in a situation that can bring you years of unhappiness.
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Contact the Jeffrey Team for more information - 416-388-1960
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Condo style — the choice is yours
Each has its own pluses and minuses, and the fees are just the start
By Inst. of Chartered Accountants
They’re today’s emblem of modern city living. With on-site services, minimal maintenance and sometimes even at-your-door transportation and shopping, condos are the home-ownership choice of seniors wanting to downsize, twenty-somethings trying to enter the real estate market, and everyone in between.
But convenience comes with a price. Condo owners can pay big fees for all those amenities and their upkeep. If you’re trying to choose between an apartment-style high-rise or the relative autonomy of a townhouse, know that each has its own pluses and minuses, and the fees are just the start.
“Condo fees largely depend on the facilities the complex offers,” says Chartered Accountant Peter K. Harris, partner at Harris & Chong LLP in north Toronto. “Townhouse complexes tend to be smaller, so the cost to maintain the common elements is divided among fewer owners. On the other hand, townhouses don’t have interior common areas, elevators or heating systems, so the fees are often lower.”
In both townhouse and apartment condos, Harris says it’s important to read the corporation’s declaration, by-laws and rules and know where your responsibilities for repair and maintenance end, and the condo corporation’s begin. In a purchase, you should obtain a status certificate, which, among other important details, outlines the legal boundary limits for your unit.
“On a per-square-foot basis, many condos are more expensive to live in than private homes,” says Chartered Accountant Jack Rothman, who believes developers would design condo projects differently if they actually lived in the structures themselves. As a member of his condo’s board of directors, he’s seen first-hand the problems that can result when developments are built to meet inadequate or outdated building codes and regulations—sometimes at the expense of sufficient parking space or proper provisions for water run-off in bad weather.
Structural issues notwithstanding, Harris says the biggest problems in condos – apartments and townhouses alike - arise from what he calls “The Three Ps”: people, pets and parking. “Things like installing satellite dishes outside one’s unit can cause major problems for neighbours and the building itself,” he cautions. “People who are inconsiderate, exceed boundaries or do things without checking the by-laws may find out they’ve broken rules. They can be legally forced to take things down and make repairs, or compensate the corporation for doing it.”
Safety is another consideration that can plague condo owners. “Most high-rises have better security. The buildings have locked doors, gates at the entrance to the property and sometimes even security guards,” says Rothman. “Townhouses tend to be out in the open, and can be more susceptible to vandalism and outside influences.”
“In apartments, safety features like fire alarm systems and fire extinguishers are enforced by inspections,” says Harris. “It’s more difficult to ensure a townhouse complex is as thorough and diligent about safety, because such fire detection measures are the responsibility of individual owners.”
Consider, too, Rothman says, the issue of condos as rentals. “In any condo complex, especially where the units are smaller, probably 40% are inhabited by someone other than the actual owner. Tenants don’t have a direct financial stake in the corporation, and sometimes don’t take the same interest in maintaining their units and the common elements as an owner would.”
Still, if you’re like most city dwellers, you’ll probably decide that the pros of owning a condo outweigh the cons. And whether you opt for a balcony on the 20th floor of a high-rise, or an exclusive-use patch of grass outside the back door of your townhouse, experts still say that buying your own home – any kind – can be one of the best investments you’ll ever make.
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Contact the Jeffrey Team for more information - 416-388-1960
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Incoming search terms
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- Condo townhomes fuse ground-floor living with high-rise amenities A flourishing trend, condo townhomes are part of the blueprint...
