It seems to be a common misconception that only newer or new condominium buildings are good investments. Many people feel that older buildings need too much work, have high maintenance fees, are dated architecturally, and just poor investments. Every time a builder constructs a new condo building, everyone flocks to it, puts down huge down payments, and can’t wait to sign on the dotted line, before the builder has even broken ground.
Now there are many benefits of buying new as well, but I don’t seem to need to convince anyone of that, which is why I’m focusing on the older gems. When I say older, I mean 5yrs old to 40yrs old, or even older.
Ok I get it, nothing sells like NEW, except for sex. But if you’re in the market for a condo, and decide to overlook the resale condo’s on the market, you are doing yourself a disservice. There are a ton of advantages to older buildings over new ones, here’s just a few:
- Older buildings sport much larger units for the same money, I mean hundreds of square feet larger.
- Older buildings have real facilities, like a real pool, not just one of those one-man bathtubs with water current so you can pretend to swim a pool length.
- Older buildings have tons of outdoor real estate. I’m talking about private grounds for the unit owners, that you can walk in, take your dog for a walk, throw a frisbee, etc.
- Older buildings carry a reputation. You can easily find out if it’s a good building, what the demographics are, how it’s managed, etc.
- Older buildings have larger balconies, sometimes huge.
- There’s no waiting for the building to be built, and when you move in, it’s an established building with everything completed, and up & running.
Of course, doing your due diligence is important when deciding to plunk your money down on an older building, but this isn’t difficult. If your agent is showing you huge 3 bedroom units listed for $55,000 with maintenance fees of $800+ / month, it’s probably not a good investment. High maintenance fees and low asking prices can indicate a poorly managed building, and the unit owners are having a hard time selling them.
Any realtor who knows anything at all about condos will make your offer to purchase conditional on receiving a status certificate, and having you & lawyer finding everything to be satisfactory with it. The status certificate contains important information about how the building has been managed over the years, it’s financial health, reserve fund savings, work orders, planned upgrades & maintenance, rules of buildings, among other things.
An experienced real estate lawyer can look over the documents and give you his professional opinion on the state of the building, and whether he feels it’s in good shape or not. Many experienced lawyers may have handled other transactions in that very building, and can further advise you. You can review the document yourself as well if you wish, and make the decision on whether you want to move forward and purchase or not.
Book a home inspection on the unit, and use the time not only to inspect the unit, but to check out the whole building, the facilities, the halls, the parking area, the grounds, get a good feel for the place. How exactly do you do all this when you’re dropping your money on a grassy field, where the builder hasn’t even started doing anything yet?
Do your homework, and I’m betting you can score a place that could put your friends new condo to shame.