Buying a condo is very different than purchasing a house. When you buy a home, you can touch and feel the house’s exterior, and you can have a look at the roof; you can go into the basement. For the most part, you have the option to see the entire home and land. Also, it is a common and worthwhile move to hire a home inspection to have a closer look at the mechanicals and wear and tear of the house.
Condos, on the other hand, are very different. You cannot see the entire basement, the mechanical room of the building, the state of the elevator mechanics, the whole roof, etc. You can see the condo living space, and to learn more, you could hire a home inspector for the unit itself if you wish. Most condos are so new that the is rarely an issue with wiring or plumbing (except Kitec Plumbing!!). It is essential that you know what to look for and what you should
So here are the questions to ask when buying a condo:
1. How much are condo maintenance fees?
Maintenance fees are an essential monthly payment to understand. You are legally obligated to pay this fee. It covers the property management fees, maintenance, common spaces, reserve fund, snow removal, etc. The maintenance fee is based on how many square feet you own in the building. Knowing what it is composed of is essential and is one of the most important questions when buying a condo.
2. Is there a special assessment planned?
Is there a special assessment planned for the near future or a recently completed one? This is a biggie. A special assessment is used to evaluate the capital cost required for a larger investment that the condo corporation’s reserve fund cannot cover. This is a hefty fee charged to each of the condo unit holders, with no exceptions.
3. What is the reserve fund?
Is the reserve fund large enough to cover any larger capital repairs that may pop up from time to time? When buying a condo, you have a large area of “common space” that everyone shares, so the net result is that each condo owner needs to pay into the reserve fund every month to cover the cost of repairs thereby as they arise. If the reserve fund is underfunded then this is a flag, beware!
4. What are the specific rules and regulations?
What are the rules and regulations? Are dogs permitted? When purchasing a condo, you relinquish certain freedoms that you would otherwise have if you owned a detached freehold home, for example. You must abide by rules and regulations and all of the other unit owners and tenants.
➤ For more informative condo content check out:
- Condo Purchase Checklist
- Our Guide To Toronto Investment Properties
- Frequently Asked Questions when Selling a Condo in Toronto
5. What do the current residents think? (elevator small talk)
When you step into the elevator to visit or leave the condo unit, ask someone in the elevator what they think of the building. This informal, small chat can give you a lot of information about the type of people who live there (old vs. young, etc.), what issues may have arisen, and the sound transference between units? You never know what you may learn!
6. How old is the condo building?
What is the age of the building? The older it is, the more repairs will occur in the nearer term. The newer, hopefully, the few. Is there still a builder’s warranty, or does TARION cover it? In my experience, buildings over eight years of age begin to have more annual capital repair costs. It’s inevitable with any structure, so don’t be alarmed. Choose to be informed.
7. How many units are for rent in the building?
How many units are for rent in the building? Another one of the most important questions to ask when buying a condo. Many investors, speculators and landlords have purchased the incredible influx of few buildings. It is good to determine what percentage of the building is owner-occupied versus tenanted.
The reality is that owners typically take far more pride in the space and neighbourhood. The buildings are typically better cared for as the condo dwellers are invested. The other upside is there is less turnover in the building with owners. Less turnover can result in a more “community feel.”
Questions to ask your realtor when buying a condo:
8. What are the most common mistakes condo buyers make?
- Buying into pre-construction “hype”
- Not using a realtor for pre-construction
- Future planning for pre-construction:
- Thinking resale condos are not as good as pre-construction
You can read about these in detail in this blog post.
9. Are condos a good investment?
There are pros and cons to resale and pre-construction investment condos but in short, yes! Rain or shine, Toronto condos are an excellent long-term investment. We break it down point by point in our Toronto Condo Investment Guide.
There is a lot to know about specific questions to ask when buying a condo; feel free to reach out to me and explore more information about What To Know When Buying A Condo
