This article will help you identify the things to look out for when purchasing a condo.
These are the top factors to consider when purchasing a condo. Consider amenities, maintenance fees, strata management, direction, demographics and more.
Each building or strata is different. Some buildings are more financially stable than others. It’s important that you ask the right questions before purchasing a condo.
Keep reading to see the complete list of things you should look for when purchasing a condo.
Location, location and location!
The location is one of the most important things to consider when buying a home. Is the property close to rapid transit? Is the area well-resourced? Are there any parks or amenities nearby?
The area you choose will have strong resale values. But remember to look long-term. There will be noise, traffic, and future supply issues if there is a lot more construction in the area. The long-term plan for the area should be considered in addition to the current situation.
Demographics & Neighbours
A condo is different than a single family home, where you live on your own land, or a townhouse, where you may share the walls with others.
It’s important to know the demographics of your building, your neighbors, and the people you share your walls with. Your location and the amenities around you often reflect your neighbourhood’s demographics and inhabitants. Are there schools that are good? Is the building close to public transit? Are there a lot of renters in the area or owners-occupiers? It is important to think about the type of people you want to attract.
Determine the area and ensure that the furniture in your current place, or the furniture you are planning to buy, will fit into your new condo. You should consider the size of your bedroom and how tight it will feel. Also, think about the purpose of each room. Does the space work for you?
Floor Plan & Flow
A better floorplan can make you happier, and allow you to live in your condo more comfortably. According to recent studies, prospective buyers are most interested in a floor plan that flows well.
A smaller unit does not necessarily mean that it is better. A unit’s feel can be affected by its floor plan. I have seen many units that felt smaller than others because of awkward floor plans. Visit the showhome if you are interested in purchasing presale condos. Ask the developer if there are any other buildings with similar floor plans that you can see in person. Also, do your research on the plan.
The maintenance fee, also called the strata fee or the monthly fee, is a payment that is made on a monthly basis. It is usually the 1 st each month. This money goes towards the building’s operating expenses and the contingency reserve.
Budgeting is based on the amount you pay each month for maintenance fees. You should also ensure that your maintenance fee is within the buyer’s expectations and the rest of market. A high maintenance fee can cause problems for future buyers. A low maintenance fee may not be ideal as it could mean that the contingency fund is under-funded.
Included in the Maintenance Fee: Amenities, Utilities, and Caretaker
It’s important to find out what amenities are included with the maintenance fee. This will allow you to be aware of any additional benefits you may enjoy. You should remember that amenities are something the strata must cover and insure. Therefore, the maintenance fee for a building with a hot tub or pool is more expensive than one without them.
You will want to find out what other amenities are included in the maintenance fees. This could include landscaping, snow removal and heat. It’s important to find out if it all covers or if you can expect an additional bill before you commit to homeownership.
You will need to find out if the maintenance fee includes gas if you purchase a unit that has gas connected for the stove or fireplace. The hot water tank system is another important item. This is your responsibility, or the responsibility of the strata. If the boiler system is used, hot water will be included in the maintenance fee. This means that you won’t have to worry about replacing or servicing a hot tank.
A lot of buildings have a caretaker who lives nearby or in the building. They clean up and take care of common areas, as well as taking care to maintain regular maintenance. This could have a positive impact on the long-term maintenance of the building.
Storage and/or Storage Locker
Condos are often criticized for not having enough storage space. Make sure you check how much storage is available inside your unit and whether there is a locker. For full-size lockers, some condo buildings offer storage lockers. They are usually 6′ tall x 4′ wide by 6′ deep. This extra storage space can be a huge advantage and can be used to store holiday decorations and other household items, such as bikes, snowboards, or household items.
Parking is an important consideration. Not all parking lots are the same. Check:
- The location of the parkade, and any barriers
- If there are multiple stalls.
- If they are small or full-size car stalls
- If they are at the same level as the storage box,
- How close is the parking lot to the elevator
To confirm that the strata has a record of the parking and storage lockers, you should check the Form B strata document. They will transfer it to you upon completion.
Contingency Reserve Fund
As a savings account, the strata’s contingency fund (CRF), can be viewed as their saving account. The owners will pay fewer special levies the more they save. You can use the contingency to help pay for unexpected repairs or bills, as well as fund large capital projects like roof replacements and building envelope replacements.
A healthy contingency is a sign of a well-run strata and should be something you are looking for.
Strata Documents & Depreciation Report
It is important to understand how the strata works, what maintenance has been done and what maintenance is needed.
Strata documents, particularly the minutes, will give you important information like:
- History of noise complaints or other problems
- Maintenance that has been completed & maintenance to be done
- How proactive and frequent the strata are
- Any red flags or issues to be aware
- Budget & financials for the strata
- History of how the strata dealt with levies or increases in maintenance fees
The depreciation report, in addition to the previous, is an important document. It is often requested by strata to analyze how the contingency fund will be held up against the building’s depreciation and any costs that may result. It shows the estimated age of each item and the time the strata will need to replace it. The engineer can compare the costs with the current contingency amount and maintenance fees and make recommendations for key repairs/maintenance items and the increase in maintenance fees.
A depreciation report can be very useful in financial and building repair planning. It will also tell you if the contingency is safe or not. But not all stratas have depreciation reports so you will need to actively search for this information.
It is important to find out if any special levies are in the future. To avoid any problems if a special levies is approved before the completion date, we always include a clause. In case of a holdback, you will want to find out if special levies have been proposed.
Knowing what special levies were paid over the past 5 years will give you an insight into the strata’s method of balancing contingency and maintenance fees.
Strata Insurance & Deductibles
The cost of personal unit insurance has increased dramatically due to rising premiums. Many deductibles have increased to make it more difficult to insure. Typically, if your deductible is greater than $100,000, you will be limited in your options.
To be able to compare your personal unit insurance with the strata, you will need to get the strata insurance notice. It is important to know when their insurance ends and what the cost and deductible are for them.
It is important to know what you can and cannot do in a strata property. Is it possible to rent out your unit? Can you have barbecues on your balcony? Do you allow pets? Are there any restrictions on pets’ size, breed or height? What are the hours of operation? Understanding the rules and regulations before you purchase a condo will help you to understand how it works and what you can expect.
Keep in mind that not all stratas have the same rules and bylaws. Make sure to carefully read the documents in relation to the building you are interested in purchasing.
Property Management & the Strata
The property manager assists the strata council in navigating the strata property act and managing building inquiries, quotes, and other matters. A property manager is not as experienced or up-to-date if you are dealing with a self managed building. However, not all strata are managed by property managers. This can have an impact on how well the strata runs.
It is important to determine how proactive strata are and how they manage the building. Are they involved? Are they able to understand what maintenance is required? Are they preparing for capital projects in the future? Are they imposing a levy on their buildings? Do they have enough funds in contingency money? It is important to understand how the strata manages a building before you buy a condo.
Construction of Buildings & Age
Take into account the building construction (wood frame or concrete) as well as building materials. Are they reputable? Are the windows and rainscreens working? Be aware of the age and differences in construction codes between the options available to you.
In BC, there is a warranty for building materials called the 2-5-10 warranty. For certain building items, such as the envelope and structure, the coverage and responsibility of the builder can be separated into years 2, 5, and 10. It is very common to have a building that is less than 10 years old.
Floor Level, Direction and View
Do you think this is a corner unit? End unit? Inner unit Ground floor What amount of natural light does it get? Is it too hot? If so, does the building have air conditioning? When weighing the pros and cons of each unit, as well as the view, level and direction relative to the others, there are many things to consider.
High-rise condos are heavier than low-rise condos. Developers often charge between $3000-10,000 per floor. You should not only pay attention to the floor level. A unit on the 12th or 25th floors with a NW view might be more appealing than one with an E view facing into another building.
Low-rises are more desirable than the top floors because there is no one higher. Wood frame low-rises are more noisy than concrete high-rises. Ground floor units can be a great option for people who want large patios or children that like to run around freely without being hounded by their neighbors. Ground floor units can be noisy so make sure to check the directions, fencing, and gates before you buy.
Plan of Development for the Area
You’ll need to know the view and if it is protected. What are the plans for the area? Will there be any rezoning, or other demolitions that could result in the view being blocked.
It’s possible to invest early and get in on the ground floor. However, if the area is already in development and will be subject to construction for the next 10+ years, you will need to consider that. Find out more about the area and whether it suits your lifestyle needs.