As single family home prices have risen, many consumers have been looking to condominiums as an alternative. First time buyers like the lower prices, which makes entry into the real estate ownership market easier. Seniors like the low maintenance aspect and the ability to be in a community catering to their lifestyle. Others like the security advantages that the building provides, especially for those who travel frequently.
When you purchase a condominium, you purchase and have title to your individual unit in a multi-unit property, and share in the ownership of the land and other common property with all the other unit owners. The type of common property varies depending on the type of condominium - high rise or townhouse for example - and would include hallways, elevators, heating system, parking structures, landscaped areas, recreation areas etc.
A condominium is a specific form of ownership and does not describe a type of building.
One of the great advantages to owning a condominium is that in most cases, it is owner-occupied and owner run. Owners ensure their investment is maintained and regard improvements as an investment which increases the value of their individual unit.
Advantages and Disadvantages of Condo Ownership
If a winter holiday is part of your lifestyle, you can leave with your mind at ease, without the worry of a driveway to clear. In the summer the grass will be cut, you won't have any exterior painting projects or fence repairs to look after.
Condo projects are now part of most communities which means being able to stay in the same location where you were a homeowner. Some condo projects are more successful than others in terms of capital appreciation and length of time to sell. Here are some of the advantages and disadvantages of condo ownership:
- Protection from rent increases
- Monthly cost of owning is often less than renting
- Easy financing
- Wide range of property types, prices, locations, sizes and amenities available
- Availability of amenities such as swimming pool, tennis courts, hot tubs, saunas, whirlpools, exercise facilities, health spas, sun decks, community rooms (the cost of which may otherwise not be affordable)
- You are investing in your own home and build equity
- Appreciation of capital value
- Pride of ownership
- Freedom to make interior changes and enhancements to your unit
- Enhanced security availability and peace of mind when leaving unit unattended
- Maintenance and upkeep is kept down or eliminated
- Security of tenure and permanent occupancy
- Cost is often less than single family home due to efficient use of land and economies of scale
- Very marketable
- Wide range of prices depending on features, luxury and location
- Sense of community due to permanence of residents and resulting social activity
- Developments available geared to a specific lifestyle (restrictions on age, pets, children etc.)
- Participation of owners in operation of development including budgeting, decision making, determination of rules and by-laws.
- Some loss of freedom may be experienced due to rules and by-laws e.g. type of pets allowed, right to rent unit etc.
- Due to a larger concentration of people you may experience problems with the "5 p's”, pets, parties, parking, personality and people.
- Money is tied up in equity
- You may be paying for some amenities you never use
- Boards of directors vary in terms of skill and effectiveness