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Condo Advice

I'm debating between 2 condos I like. Both are of equal square footage. One is about 5 years old and the other one will be supposedly finished Sept. 2010. I'm in no rush to move out as I live with parents who are letting me stay with them indefinitely.

Do I

a) buy the 5 year old property even though it costs a little more (higher maintenance fees) and may require a few renovations.

or

b) go with the newer condo with lower maintenance fees and pick all my colours/finishings...

I am aware of possible risks in buying from a builder but I would like to make a little profit upon resale in 8 or 9 years...

Just wondering if anyone has had to decide between these two options before and might have some advice/suggestions for me.

I think you've pretty much got your answer in your question

don't buy a condo

quote:

Originally posted by ChemEnhanced don't buy a condo

Agreed.
There is nothing about the fundamentals about the condo market that seem positive to me. There wasn't even that much of a correction this year....I think a massive correction is coming, and Toronto condo flippers will be a thing of the past.

quote:

Originally posted by ChemEnhanced don't buy a condo

exact.

Re: Condo Advice

quote:

Originally posted by 1dawoman b) go with the newer condo with lower maintenance fees and pick all my colours/finishings...

My two cents: from the experience of people around me, the condo fees are always artificially low to sell you the condo, actually it's the fee per sqf prescribed by local authority... which in reality is hardly enough to pay all the maintenance costs.

What happens, is that after a year or two, condo fees almost double to reflect the real maintenance costs.

With a new building, there's the surprise element because you don't have a history of things that went bad/things to come.

In an older building, you can request budget and cash reserve details from the current owner, and even go back a few years in the backlogs to see what the future of that building holds in term of problems and work to do (which relates to cost...)

I could write a book on this...but that will wait until I get home tonight.

short answer...all things being equal (location, style, finishes, etc), I would go with the existing condo over a new one.

- mortgage rates remain near historical lows. secure a rate now for 5 years or roll the dice and see where rates are in Sept. '10 (likely later, and likely a fair bit later as there is typically an occupancy period with new construction condos prior to title to the unit being given to you which can range from a couple of weeks to over a year in bad cases).
- existing building will give you an indication on how well its been managed.
- no firm time of possession and ownership with a new build.
- deposit structure can be fairly aggressive on new builds...15-25% within a short period of time of signing the offer is not unusual. that may or may not matter to you.

more to follow. much of it will depend on your preferences and personal situation. btw...where are you looking?

quote:

Originally posted by MarkT I could write a book on this...but that will wait until I get home tonight. short answer...all things being equal (location, style, finishes, etc), I would go with the existing condo over a new one. - mortgage rates remain near historical lows. secure a rate now for 5 years or roll the dice and see where rates are in Sept. '10 (likely later, and likely a fair bit later as there is typically an occupancy period with new construction condos prior to title to the unit being given to you which can range from a couple of weeks to over a year in bad cases). - existing building will give you an indication on how well its been managed. - no firm time of possession and ownership with a new build. - deposit structure can be fairly aggressive on new builds...15-25% within a short period of time of signing the offer is not unusual. that may or may not matter to you. more to follow. much of it will depend on your preferences and personal situation. btw...where are you looking?

+1 and occupancy as well as registration may be delayed further typing up your money

i agree with most other ppl here in getting a house over a condo, that is if you have that option - unless of course you're truly after the lifestyle aspect of a highrise

quote:

Originally posted by MarkT more to follow. much of it will depend on your preferences and personal situation. btw...where are you looking?

Lakeshore/Parklawn

quote:

Originally posted by dEsidEL i agree with most other ppl here in getting a house over a condo, that is if you have that option - unless of course you're truly after the lifestyle aspect of a highrise

Obviously a house would be ideal but I'm going to be living alone and dont really need a whole house to myself...Im interested in being in a condo for a few years before getting married.

we went a 5 year old, simply because we wanted to be sure that weren't any inherent issues with the building right after it was built.. i've heard of horror stories with some of the new buildings, so wanted to make sure we didnt slide into one of those

quote:

Originally posted by ChemEnhanced don't buy a condo

+1

The thing about condos..

They subject YOUR ownership to the rules of others. You are under the mercy of the condo board. They decide your fees, they decide the rules on how you can use your own property and they decide on what gets fixed if anything. And YOU are the one that pays.


A real estate agent once gave me a piece of advice. "when you buy a condo you dont own the floors, the walls or the cielings. Just the air in between them".

Very true.

quote:

Originally posted by Jayx1 A real estate agent once gave me a piece of advice. "when you buy a condo you dont own the floors, the walls or the cielings. Just the air in between them". Very true.

it is very true....you basically buy the air located within the building....and this issues you have to go through if you actually decide to upgrade things like flooring.

Lol at the anti-condites...

Maybe he doesn't want to live at home anymore and he said he didn't want a house to himself...

What's the alternative??? Rent??? The dumbest way to live if you can afford not too...

Which building is the new one? South beach or iLoft???

Well can't be South Beach as they've not even broken ground yet...

quote:

Originally posted by VDub Lol at the anti-condites... Maybe he doesn't want to live at home anymore and he said he didn't want a house to himself... What's the alternative??? Rent??? The dumbest way to live if you can afford not too... Which building is the new one? South beach or iLoft??? Well can't be South Beach as they've not even broken ground yet...

with condos u get the wonderful triple threat of mortgage, taxes, AND condo fees. I consider condo fees to be rent and some of the condo fees out there are equal to what youd pay for rent for your share of a 2 bedroom apartment. So i really dont see a difference unless the market spikes higher than the taxes and fees paid in the interim.

As a principal investment. Condos fail... As a rental property they could be very lucrative.

But again, a lot of condos wont let you rent your property out. Because THEY control your property, not you.

oh no!! the condo fees

as if you don't have any fees w/ a house! lol

and speaking of the condo board fear mongering, the board is run by CONDO OWNERS w/o compensation! to imply that the condo board is somehow inherently evil and detrimental to you as a condo owner is just stupid

quote:

Originally posted by VDub Lol at the anti-condites... Maybe he doesn't want to live at home anymore and he said he didn't want a house to himself... What's the alternative??? Rent??? The dumbest way to live if you can afford not too... Which building is the new one? South beach or iLoft??? Well can't be South Beach as they've not even broken ground yet...

I thought my gender was obvious since it's stated in my user name.....guess not :P

and yeah, I like iloft>south beach

quote:

Originally posted by Jayx1 with condos u get the wonderful triple threat of mortgage, taxes, AND condo fees. I consider condo fees to be rent and some of the condo fees out there are equal to what youd pay for rent for your share of a 2 bedroom apartment. So i really dont see a difference unless the market spikes higher than the taxes and fees paid in the interim. As a principal investment. Condos fail... As a rental property they could be very lucrative. But again, a lot of condos wont let you rent your property out. Because THEY control your property, not you.

I see what you're saying, however, maintenance fees include utilities: hydro, gas, cable etc. So by living in a house it's not like I wouldn't have to pay monthy fees...

Also, the buildings I'm considering allow unit owners renting out...

quote:

Originally posted by Jayx1 with condos u get the wonderful triple threat of mortgage, taxes, AND condo fees. I consider condo fees to be rent and some of the condo fees out there are equal to what youd pay for rent for your share of a 2 bedroom apartment. So i really dont see a difference unless the market spikes higher than the taxes and fees paid in the interim. As a principal investment. Condos fail... As a rental property they could be very lucrative. But again, a lot of condos wont let you rent your property out. Because THEY control your property, not you.

You also have to remember what the maintenance fees are covering, things like hydro, water, A/C & heating, snowplowing ect...

I've owned both a house and a highrise and although there are no "maintenance fees" with a house you do still have a lot of other incurred costs that you don't with a condo. You are also responsible for all your own maintenance, which on a older home can be very expensive (I'm sure she can't afford a new home in that area). For a young single person a condo is both affordable and easy to maintain. Keep in mind she's not looking to flip it but sell after 8-9 years.

I would go with the 5 year old for all the reasons above AND that fact that you can also start paying down your mostgage earlier than waiting. Therefore more equity at the end for you.

some condo fees cover everything, some dont. Either way with your own property you become the master of your expenses. You control the heat, the water, the cable, the snow removal.

it just bothers me when others are in control of my choices.

quote:

Originally posted by mute79 oh no!! the condo fees as if you don't have any fees w/ a house! lol and speaking of the condo board fear mongering, the board is run by CONDO OWNERS w/o compensation! to imply that the condo board is somehow inherently evil and detrimental to you as a condo owner is just stupid

I know... which means basically another form of "government" to contend with.

Re: Condo Advice

quote:

Originally posted by 1dawoman a) buy the 5 year old property even though it costs a little more (higher maintenance fees) and may require a few renovations. or b) go with the newer condo with lower maintenance fees and pick all my colours/finishings...

Based on what you've laid out as the options. It seems like the answer is obvious

quote:

Originally posted by Jayx1 some condo fees cover everything, some don't. Either way with your own property you become the master of your expenses. You control the heat, the water, the cable, the snow removal. it just bothers me when others are in control of my choices.

Have you noticed lately that 90% of those people in control have all their heat, water, cable, etc shut off 23hrs a day?

What about condos NOT in Toronto? Still a bad idea?

quote:

Originally posted by VDub What's the alternative??? Rent??? The dumbest way to live if you can afford not too...

Not necessarily. Rent has to be compared with condo fees, interest on mortgage, property taxes, and expected value of gain/loss on your property (which may not be very easy to put a value on right now considering general housing market uncertainty). Opportunity cost of other available investments is also a factor that should be considered.

While in many cases it is better to own than to buy, there are certainly some cases where renting may be a better investment.

quote:

Originally posted by Shaya007 Have you noticed lately that 90% of those people in control have all their heat, water, cable, etc shut off 23hrs a day?

yup... and they arent paying $600 a month for those things either hehehehe

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