Written by Jason Lau Tuesday, 19 February 2013 20:40
Condos can be a great choice for many people, including first-time buyers looking to get into the market and build equity. A condo unit can be a good starting point since it is usually less expensive to own and carry than a traditional house. Condos can also be the right decision for people making their choice based on lifestyle. These buyers primarily choose this type of home because there is no yard work, snow removal or roofing repairs to be done, while others are looking for the extra security that comes with being high up in a secure building.
Whatever your reasons for considering a condo, it's important you start out by knowing what you're buying into. Some people don't have a clear understanding of what a condominium really is. They use the term “condo” as synonymous with “apartment,” however the term “condo” refers to the form of ownership and has nothing to do with the physical characteristics of the unit. In fact, a condo doesn't have to be an apartment at all. A condo can also be a townhouse, a link home, or any type of multi-unit residential dwelling or commercial property with shared areas. These areas, or common elements, can take the form of a swimming pool, rooftop lounge, exercise room, front lobby, parking garage etc. The cost of operating and maintaining these common areas is jointly shared by the individual unit owners in the form of maintenance fees that are usually paid monthly. The cost is determined by the condominium corporation which is made up of unit owners like you and since there is a certain degree of control over maintenance costs, I recommend getting on the board and becoming one of the decision makers.
Condominium ownership offers many advantages, such as the potential to build equity, title, and privacy within your unit. With a condo, you can count on the fact that your property is being well maintained with little effort on your part.
On the other hand, freehold units offer other advantages over the condominium option. You have more freedom to alter your property to suit your needs, and since you are responsible for upkeep, you have a bit more control over your maintenance costs. You can keep expenses down by cutting your own lawn and shoveling your own drive. You will have to budget accordingly for big expenses like a new roof or furnace.
Condos have rules and by-laws that govern such things as pets and what colour your neighbour can paint his garage, and by law a portion of the maintenance fee goes towards a reserve fund. Sometimes, the need for such rules, by-laws and a reserve fund become evident when the complex begins to age and can negatively affect resale values. There's a lot to consider when choosing a condo or freehold home; be sure to ask your realtor for help.
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