How much do the utilities cost? "Many condos have electric heating, and that can be expensive," says Warren, adding that condo units in Ontario are all slated to go onto sub-metered systems by 2010. "And all your expenses are going to rise by at least the rate of inflation, usually more. Over a three-year time frame, maintenance fees in new condominiums can typically rise 50 per cent."
And, while it may be tempting to buy a condo with all the possible amenities – pool and spa, gymnasium, rooftop garden – Warren says that you should think twice about it. "Even if you don't use them, you'll still pay for them."
Check out management
Warren also suggests that you consider the reputation of the builder, as well as the quality of the condominium's management. "How long have they been there, and how many times has the management changed? If they're changing often, that's not a sign of a healthy condominium corporation," warns Warren. Changing management can also be a sign of problems with the condo management committee, which is made up of elected tenants. And things could get much worse, so nose around and ask some of the tenants whether they feel the property is being run well. Warren cautions that management problems can adversely affect your own unit's value. "You have to bear in mind that unlike a house, you can't maintain the value of your property by yourself."
Lifestyle considerations
Former house dwellers may find that the condo lifestyle isn't what they had in mind. "Lifestyle issues can become the most contentious for people who aren't prepared for the change," says Warren. "What you're going to be doing, in effect, is living in an apartment with noises from the neighbours. There's a whole series of compromises that must be made."
For example, even within your own unit, pets may not be allowed, curtains visible from outside may have to be a certain colour and there may be restrictions on what you can do on your balcony. You probably won't be allowed to barbecue, and you may even be prohibited from putting Christmas decorations on the outside of your front door. Adds Thompson: "In older buildings, any repair work can be obtrusive too, especially for retirees who aren't away at work during the day."
"It's a restrictive lifestyle," says Warren. "The condo bylaws, rules and regulations can be onerous. There can be 60 to 70 to 80 pages of them, and if you really want to talk to a lawyer who specializes in condos, you might have to pay $2,000 to do so. Most people don't, and then they're surprised at what they've bought into. It's being penny-wise and pound foolish."
Of course, there can be advantages to living in a condo. But you have to look at all aspects of the deal, including, of course, location: "It is still the prime determinant of value for any kind of real estate," says Warren. Thompson goes a bit further: "You have to be realistic about the reserves – don't be deceived by the initial allowances. In fact, my advice is not to buy a new condo but rather look for one that's a year or two old so the fee structure is established."
Page 2 of 4 -- Is living with extended family right for you? Read all about one family's experience on page 3.
