July 15, 2016
Whether you are a first-time buyer, downsizing from your family home or looking for an investment property, condominium homes continue to be a great option. I often talk to customers who are wary and unsure about what condo ownership entails, or have heard horror stories about skyrocketing condo fees. Let’s debunk some of the myths surrounding condo ownership:
The term “condo” is not interchangeable with “apartment” or “high-rise building”; a condo refers to a type of ownership, and not the building form itself. A condo can be a townhome, a semi-detached home or a detached home with shared areas, such as roads and amenity areas.
These shared spaces within a condominium are called, “common elements”, and can include a swimming pool, exercise room, party room, rooftop terrace, or sometimes it is just a common shared road with landscaping. The cost to operate and maintain these shared areas is done by the owners through monthly maintenance fees, commonly referred to as “condo fees.”
One very important factor to note, is that not all condo fees are created equally. Here are some of the main drivers of condo fees:
Another type of condo ownership is the “common element” condo. Here, the owners only bear the cost of maintaining roadways. The owner is responsible for snow removal in their driveways, lawn maintenance and exterior repairs to their home, while other standard condos have a relatively maintenance-free program. All of these items are taken care of for you and are extremely convenient for the person on the go and gives you the option to “lock ‘n’ go” without the hassles of maintaining a home and cutting your lawn. Current Adi communities that are standard condominiums are Stationwest, adjacent to the Aldershot GO station), Nautique Lakefront Residences, located in downtown Burlington, and Link2, located in north-east Burlington, adjacent to Bronte Creek.
The alternative to condominium ownership is freehold ownership, which offers the advantage of the owner having full ownership of the home, inside and out, as well as the parcel of land it sits on. That means if you want to paint your garage door, change fixtures, or make repairs to your home, you can absolutely do that, but you will be bearing the cost of all these changes and improvements as well as the labour involved in maintaining them. However, do remember, this also means if your eclectic neighbour chooses not to cut his grass, clean and manicure his lawn or paints his garage door pink, there isn’t much you can do about it! In a condo community, there are rules and regulations in place to ensure the homes’ exteriors and landscaping are maintained and stay uniform.
While the conception is that there are no monthly maintenance fees for a freehold home, the reality is you will still need to budget significant amounts of valuable capital for repairs and upkeep of the home because you are responsible for the property and the home maintenance. In some cases, these will be far higher than a typical condo fee. For example, this can include:
Make sure you are earmarking generous amounts of capital for a new roof for when the time comes!
With the Greenbelt Legislation that has come into effect and the provincial and local municipal governments looking to curb urban sprawl, it will encourage growth of our urban hubs and take advantage of existing infrastructure. A lot of pressure has been placed on the availability of land, making it nearly impossible to build traditional freehold homes, if at all, let alone at an affordable price, especially if you’re looking to live in and enjoy the Golden Horseshoe cities and their satellite suburbs and what they have to offer. These cities have become desirable for their access to jobs, transit, highways, and quality of life. These include cities like Burlington, Toronto, Oakville and Mississauga.
Freehold townhomes have become somewhat of a real estate “unicorn” in new home construction; as cities grow and intensify, and housing types becomes more compact, condos are becoming much more commonplace and the only affordable option for most buyers.
Make sure you do your homework when looking for a freehold vs. condo type of ownership. This can include doing the math on what a freehold home will actually cost you, which we will look at I more depth in Part 2 of this blog. Stay tuned!
If you have questions, any member of our Sales Team would be happy to help! Call, email or visit us at any of the following locations:
Presentation Center Hours: Monday – Thursday 2:00pm – 7:00pm (Nautique 1:00pm – 6:00pm); Friday by appointment; Saturday, Sunday and Holidays 12:00pm – 5:00pm
Samantha Sutton is the Sales and Marketing Manager at Adi Development Group.