When looking for properties a lot of people go with the feel of the place. They look around and say, “Can I see myself living here?” This is great to a certain extent as you do have to envision yourself in a space but there are other factors that also need to be considered. With more people opting to live near urban centres and in the downtown core, condo-living has become a great option for convenient, easy, stress-free living.
Condos can be a great investment but you have to do your homework. Should you buy a brand new condo that’s barely up yet or invest in one that’s been around a while? Here are some tips on what to consider when deciding to buy a condo.
Maintenance Fees: There are a lot of charming older condos in the city as well as glitzy new ones that are going up quite rapidly. So, what’s the difference? Well, one of the things to consider is maintenance fees. New condo’s monthly maintenance fees tend to be lower as everything is brand new and in working order so they need less upkeep and there are fewer chances of things like elevators and water pipes breaking down in the first few years at least. What this ultimately means is that your monthly cost may increase at a lower rate in a new condo than an old one.
Location: Another factor to consider is where the condo is located. If you’re looking at a slightly older condo that you love that’s fine, but think about your surroundings. Is it in an area where a whole slew of new condos are slated to go up? If so, this may keep the older property’s value from appreciating or even worse it may actually reduce its market value. People will gravitate towards the shiny new building and you may not be able to compete with the newer condos when it’s time to sell.
The Budget: It’s important to know your budget and make a decision you are comfortable with. This can mean buying an older condo instead of a newer one and there is nothing wrong with that. However, you must have a plan. If you plan to live there indefinitely then go ahead and buy it, but if you are thinking about selling three to five years down the line then you have to consider the fact that the older the condo gets the more it might depreciate. Basically, it may not be the best investment decision for re-sale purposes.
Reserve fund: So, what is a reserve fund and why do people always talk about it when it comes to buying condos? A reserve fund is a separate, almost like an emergency, fund that is maintained by the condominium corporation to take care of any unseen repairs or replacements that come up in the life of a building. This includes the walls, roofing, windows, heating and cooling systems, lobbies, playgrounds or whatever other amenities the condo may have. When the condominium corporation has to spend a large amount of money from the reserve fund, the maintenance fees can go up to make up for the expenditure. The larger the reserve fund, the better off you are as a buyer.