Condos have become evermore popular as observed by the multiple rising towers on street corners and visible cranes in city skylines, plus the statistics don’t lie! But owning a condo unit, no matter how high above the city, might not always be living on ‘cloud nine.’ If you want to minimize the odds of being frustrated with your ownership situation, here are a few basic questions you ought to ask before catching the condo-fever.
1. What is the market like?
Condo costs and appreciation rates are not equal across a given city. Try to foresee how various areas of your town are likely to evolve over the next few years: Where will your city council invest? Where are business ventures blooming? Where are young families settling down? You may find that some traditionally not-so-coveted neighbourhoods could very well be your best gamble!
2. Can maintenance fees remain that low?
Your mortgage is just one of many condo expenses. Since your future housing unit lies within a larger complex that needs maintenance, you will necessarily have to absorb monthly association fees to pay for the cleaning of the hallways, the lawn-mowing, the continuous repairs, etc.
Such maintenance fees are sometimes kept artificially low in the pre-construction selling phase: beware of these glittering promises, because the amount you pay could go up quickly. If you can, you should ask long-time, condo owners of the building in question of how often their condo fees have gone up.
3. Are there big bones of contention?
Find out about what is going on in the complex before you enter it. One way to do this is to request the minutes of the association’s previous meetings: by leafing through this documentation, you will be able to take a look at the internal debates that have been going on. If the owners are unhappy with the noise level, the plumbing, or the gardening in a given complex, you would have spotted it before committing to the purchase!
4. What are the rules?
Before signing your contract, you ought to read it carefully. Since your unit is part of a larger complex, you are not “totally free” in the sense that some rules, conditions and restrictions apply to all residents of the building. Remodelling could be seriously constrained, pet ownership forbidden, Christmas lights prohibited, etc. If some dispositions of the contract look vague to you, ask for some clarifications.
5. How many renters are there in the complex?
A high percentage of renters can have negative impacts on financing for those individuals seeking to purchase a condo. For instance, having too many rented units in a given complex can limit your capacity to get a mortgage with a financial institution. There is a reason for this: condos occupied by owners are generally thought to be less at risk than condos purchased by investors.
This article was written by Alexandre Duval who is a blogger for Merlin Assurance. He is also completing his master’s degree in Political Science at the University of Quebec.