Many people, especially millennials are showing a great amount of interest in buying condos, as they feel that it perfectly gels with their modern lifestyle and is definitely suited to their needs. The recent craze towards condos is fuelled mostly owing to people looking to downsize or looking for a better lifestyle. Condos are compact, located in convenient areas and offer a wide range of amenities that otherwise single home owners would find difficult to build and maintain.
So if you are looking to buy a condo you’ve ended up in the right place. We have five tips that will help in your search for the right condo.
1) Establish Why You Are Buying The Condo:
It is important that you determine why you want to buy a condo in the first place. Most people buy condos mainly to move in themselves. This is specific to small families and singles, as condos usually are small in size that is ideally suited to them. The amenities and facilities in the complex must also be taken into consideration. Ideally buyers must consider if they would be using these amenities or else it would be a waste to buy a condo and pay for them.
If buyers are considering the condo as an investment then they must be asking themselves the following questions:
- How much has similar condo properties in the neighbourhood appreciated over a period of time?
- What is considered to be a reasonable percentage in appreciation of the condo, so that the buyer considers the investment a successful one?
- How long do you plan to hold on to it?
- Will you be expecting to make a considerable profit after interest on mortgage?
- What are the prospects for renting the condo? How soon do rental properties get occupied in the neighbourhood?
- What is the on-going rent in similar condo property?
- Is the condo near any industrial / business zones, which will help attract more people to rent it?
2) Sort out Your Mortgage:
One of the biggest mistakes that buyers make is that they start scouting for condos even before they know what they can afford to spend. After all, isn’t this the first step? Look for a condo and then apply for a loan to pay for it. That’s exactly the wrong thing to do. In most instances buyers tend to fall in love with a house and then later realize that they can’t afford them even with a loan. This will only lead to heartbreak for buyers when they realize that they can’t afford the place.
The most important thing to do before looking for a condo is to get a pre-approval for your mortgage. This will provide a lot of cushion, confidence and certainty for buyers when they are searching for a property to buy. You would have to be worried about hitches in negotiations or being left short of time to process your loan when a counteroffer offer is made. In many cases sellers only prefer talking to buyers that are pre-approved, as they know that buyers will not back out because of any last minute complications. This puts buyers in an advantageous position as they get first preference in negotiations.
3) Research all Aspects of the Condo:
More often than not buyers think it is necessary to just look at basic aspects like appearance of the condo, the developer’s track record and the price of the condo relative to surrounding properties. While all this are definitely important components, your research must be more detailed and expand beyond this.
Here are some elements that your research must include:
- What are the condo fees? How is it relative to similar condos in the neighbourhood? Are the condo fees commensurate with the amenities that are available in the complex?
- How well is the condo complex maintained? Are the amenities, facilities and common areas well maintained?
- Analyse the location of the condo. Is it located near your workplace? Are there sufficient amenities like schools and hospitals near the condo?
- How is the transportation surrounding the area? Is it easy to get to your usual places of visit?
4) Financial Egg-Nest for Down Payment:
Even before you set out to look for potential condos, get your finances sorted out. This is a step that is often ignored by buyers, especially first time buyers, as they feel that they can just make it through. However, this can lead to disappointments like missing out on your dream house or complications in striking deals because of poor planning. Here are some aspects you must ponder:
- How much can you afford to spend? This is the most important question that you should ask.
- How much of down payment can you set aside? Buyers must realize that their houses will not be funded 100% through their mortgage. Buyers must have at least 20% of the property value set aside for the down payment.
- Have you considered the additional expenses that will be associated with buying a home? Things like home décor, modifications / repairs, mortgage processing fees, condo fees and caution deposits can significantly add to expenses.
- Buyers must keep in mind that buying a condo will be a commitment that will last for a long time. The condo fees must be paid every month as long as you stay in the complex. Similarly the mortgage will have to be paid off over long periods like 10 – 20 years or more. Please keep this in mind before making any decisions regarding buying a condo.
5) Explore your Environment:
This is an important step that most people neglect. The condo property is going to be owned by you for a significantly long time so it is essential that you get to know how your surroundings are. A good first step would be to meet the neighbours and see how the community fits you. Talking to the condo management will also help you better understand how well managed the complex is and how active are members in preserving the quality of amenities in the complex.
Condos definitely make for great and warm abodes where families/single stay in a happy and joyous manner with great social interaction with their neighbors and as a closely knit unit.