What You Need To Know About Buying A Condo
October 7, 2015 | Posted by: Mike Garganis
More and more Canadians – especially first-time home buyers – are choosing condominiums over conventional home ownership. Here's a quick guide to the ins and outs of purchasing a condominium.
What is a condominium?
Condominiums include ownership of common elements and assets of the building and community (and sometimes land) in addition to the unit you own. Condominiums can be an affordable and convenient way of living, offering the benefits of shared amenities, security and some home maintenance. As a condo owner, you have a say in the running of the condominium corporation and can vote at meetings.
How much do condominiums cost?
As with buying a conventional home, the price a condo is listed for is just one of the costs you need to budget for. For instance, if your down payment is less than 20 percent of the purchase price, you'll need to buy mortgage insurance, the cost of which depends on the size of your down payment. And there are additional costs such as taxes, moving and closing costs.
How do maintenance fees work?
In addition to your mortgage payments, condominiums come with an extra cost – monthly maintenance fees, also known as condo fees or strata fees. These are determined by the condo board and are different for every building. Maintenance fees typically cover communal expenses such as utilities and shared amenities; it's important to budget for these costs when shopping for a condo – and to know what they do and don't cover.
What else should I know?
Because you are buying into a corporation, it’s important to understand its health as a business. Some key questions to ask, include whether the condo has any legal disputes, whether it has a healthy reserve fund, how much condo fees have increased year over year and what the rules are of the condominium.
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