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The power of twitter!
I was running low on ideas to post on this blog and while researching through different articles about what I thought were possible suspects for a topic, I came across an article on how to leverage twitter to help you do more with less. One of the suggestions were to leverage it as a think tank; so without a second thought I shot out a twitter asking my followers what they would like to see me post about. Low and behold, I have 17 topics sitting on my table that will keep me busy for the next little while. Love it!
The topic I’m writing about right now is what you should consider when you’re looking to make a purchase and have to decide between a condominium or freehold property. Let me start at the basic differences:
- Condominiums can be townhouses, apartments, houses or any other piece of real estate where there’s a share in ownership and operational expenses of a real property while having a negotiable title to an individual unit. In simple terms, you own a piece of a big project and share in the expenses of maintaining it.
- Freehold (Fee simple) ownership is the most common, highest estate or absolute right in real estate ownership. The word freehold refer to an interest in land for a limited or infinite amount of time.
- There’s also cooperative ownership as well as co-ownership relating to owning real estate which have similar traits to condominium ownership but are very different and I won’t be discussing in this post.
In simple terms, a condominium purchase is accompanied by additional services offered at a monthly fee which is called a condo or maintenance fee. In a freehold property, the owner is responsible for the repairs from their own pocket.
The question about which one you should purchase or would work best for you is best answered by conducting a review of your needs. Following would be the factors:
- Budget: How much money are you looking to spend?
- Time: How much time do you have available to services the property. Do you enjoy yard work?
- Your lifestyle: Do you have pets? How much time do you like spending outside? Are you planning on having kids or have kids?
Budget plays an important factor when considering what you’d like to purchase. A lot of buyers in downtown Toronto don’t have much of an option as it’s mostly condos that are avaiable close to the core.
The cost of a freehold property in downtown Toronto can be quiet expensive as land comes at a premium. Freehold ownership does become a bit easier in the suburbs as prices for real estate tend to soften up as you move away from Toronto. There’s still a big gap in affordability for first time buyers and a condo often is a better option.
Another item to consider is how much time can you spend on maintaining a property. Having a yard is a task that needs to be attended to two to three times a week if you’d like to keep it green. A lot of busy professionals don’t have the time but enjoy having the yard in which case they opt for a townhouse project where the condo corporation maintains the lawns or a building that has green space i.e. roof top terrances.
Do you have pets? Have kids or planning on having children? Maybe a better option would be a freehold property or a townhouse with easy access to parks or located on a cul de sac.
Freehold property owners if faced with an unexpected purchase, i.e. storm blew off shingles, have to dip into their lines of credits or savings to make the repairs whereas items like roofs and window repairs would be covered by the condominium corporation. I’m not implying that you don’t pay for it rather you don’t have to fork out big cash to have the repairs done right away.
There are some downsides as well. A ill managed property or condominium corporation can spell disaster for one owner or an entire complex. When purchasing a property, make sure you are able to manage the work that needs to be done to ensure you can maintain the value of the property. Ask your REALTOR to give you an idea about how much time would be required to maintain a property. You’re home inspector should give you a list of items that need to be checked or replaced on monthly, quarterly, semi-annually and annually. Review the list and make sure it gets done.
When purchasing a condo, please make sure your REALTOR makes your purchase conditional upon your lawyer reviewing the status certificate. Your lawyer would review the documents to make sure adequate amount of reserve funds are available and you are notified if there are any new levies being imposed. It’s also a good time to confirm your life questions i.e. pet restrictions, barbeque or backyard restrictions etc with your lawyer to confirm any information you used to make your decisions is true.
This is a very broad topic and I’ve just attempted to stratch the surface of it. I cover this in detail when conducting buyer consultations for our clients. If you have any specific quesiton that you’d like me to review, please feel free to contact me directly and I’d be happy to answer it for you.
To your success and continued increase in wealth!
The contributing factor,
Addy Saeed
Real Estate Sales Representative,
RE/MAX Active Realty Inc., Brokerage
Direct: 1-877-HEY-ADDY
www.HeyAddy.com
Follow me on Twitter
You’re (sic!) page needs some proof-reading. Good information otherwise.
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