Tips To Buy A Condo - The Comprehensive Guide

Many people, especially millennials, are showing a tremendous 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 homeowners would find it challenging 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 is precisely 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 cannot 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 pre-approved buyers, 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 these 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 crucial 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 members are 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.

1) Condo Fees -

One of the major reasons people buy condos is for the lifestyle choice it offers. A condo complex is more often than not filled with amenities. It comes with a wide range of amenities like a gym, swimming pool and guest suites, etc. While buyers may be under the impression that lower the fees, the better, this is not the case always. The condo fees should be compared to the facilities and the amenities that it has to offer and not against other condos. Naturally, more amenities mean more fees for its upkeep. So buyers must not always keep an eye out for condos that charge low fees.
More importantly, it should also be noted that lower fees would result in poorer upkeep of facilities. This would be counterproductive, as the whole point of owning a condo comes down to the lifestyle and amenities it offers. So, buyers must be wary about condo fees and how it is spent before you target which condo to buy.

2) Common Area Utility And Maintenance

This is another aspect that must be explored by prospective condo buyers. Condo buyers must be aware that the complex will come with shared space such as hallways, lobby/concierge, guest suites, gyms and swimming pools. These utilities must be shared by all residents in the condo complex, and everyone must share responsibility in preserving and maintaining them. Owners must be extra cautious when bringing over guests or family to use these amenities are they are not the sole owners. Many people also find it difficult to share such spaces as it affects their privacy. These people should not consider buying a condo in that case.
Before making an offer, buyers must also inspect the facilities and find out how they are maintained. This would give a clear picture of how active and cooperative society is and how much they care about maintaining common shared amenities. Naturally, shoddy maintenance can indicate a lack of care or unity among residents, poor management or that a high percentage of the condos in the complex are being rented, as renters tend to be less concerned about repair and upkeep, as they don’t own the property themselves. Do proper research on how well that building is maintained to avoid future disappointments

3) Condo Rules -

As mentioned earlier, unlike a townhouse or a villa, a condo does not represent whole ownership of the property. Residents would have to share common areas and amenities. There is always the possibility of noisy neighbours and loud music. So, people who value privacy must think twice before looking to buy a condo. However, living in a tight unit and sharing space may also bring great unity among residents.
Buyers must also look into the rules laid out by the condo residents and management before buying it. The condo rules may have some conditions that you may find objectionable and may also end up being a deal-breaker. For example, there may be a no-pets policy or a curfew on loud music and parties after late night. If these might bother you, then you may have to look elsewhere. Breaking condo rules after moving in can make things very uncomfortable as you may have face flak from the faces that you have to see every day. So, make sure you go through the rules or have your real estate agent look them up for you.

4) Management -

Many condo complexes are run and maintained by companies, which specialize in maintaining properties. Sometimes these companies turn out to be an extended arm of the property developer. In some instances, residents of the society form an association and decide against hiring a manager and take things into their own hands. However, in most cases, a condo complex will have a condo manager who is fully responsible for the management of the complex. It would be a great idea to chat with the condo manager as well so that you can find out more about how management works and more about the society. Naturally, you do not want to end up in a poorly run condo complex.
Before making an offer, buyers must also inspect the facilities and find out how they are maintained. This would give a clear picture of how active and cooperative society is and how much they care about maintaining common shared amenities. Naturally, shoddy maintenance can indicate a lack of care or unity among residents, poor management or that a high percentage of the condos in the complex are being rented, as renters tend to be less concerned about repair and upkeep, as they don’t own the property themselves. Do proper research on how well that building is maintained to avoid future disappointments

5) Insurance -

A critical thing to check with your real estate agent is if the condo property has an Insurance Policy. If it does, what does it cover? Not only does this give you security, but it also lets you know about what you should be covering with your Personal Insurance. Most often, condos will be insured for property damage to the complex and its common areas and facilities. It can also cover any third party liability that can arise from someone entering the complex. It is extremely unlikely that the Insurance would include the properties of the residents as well. This can help you in determining what you can exclude and include in your personal homeowners Insurance Policy so as to avoid an overlap in coverage or conflict of interest.
Condos represent a ritzy lifestyle with a close-knit group of families, so always ensure that it is well-aligned with your interests in life and with your philosophies. And hiring a real-estate realtor who is well-versed with the various condos in the neighborhood and their respective amenities is the definite first step that you ought to take so that you can live in peace and harmony in your ‘dream condo’!
FOR FURTHER INFORMATION OR IF YOU HAVE ANY FURTHER QUESTIONS PLEASE DO NOT HESITATE TO CONTACT ME.

AJ LAMBA

(REAL ESTATE COACH & BROKER OWNER)

PHONE: 9055029944