What to Look for When Buying a Condo
Best Tips for Buying a Condo
Written By: Mariko Baerg, REALTOR of Bridgewell Real Estate Group
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If you’re wondering what to look for when buying a condo, then you’ve come to the right place.
We’ve put together the top things to look out for when buying a condo, that makes you think about more than just size & location. You’ll also want to consider amenities, maintenance fee inclusions, strata management, direction, demographics & more.
Not every strata or building is the same, and some manage themselves and the finances of the building better than others, so it’s important to make sure you’re asking the right questions when buying a condo to make sure you’re making the right purchasing choice!
For the most comprehensive list of what to look for when buying a condo, keep reading!
Location, location, location!
One of the most important considerations to make when purchasing, if not the most important, is location. Is it close to rapid transit or a bus? Are the schools in the area desirable? Is it close to nearby amenities or parks?
If you purchase in the right area then resale value will always be strong, but don’t forget to think long term. If there’s a lot of construction coming up in the area then there will be a lot of future supply, noise, and traffic issues down the road. Consider the long term plan for the area in addition to what it is like right now.
Demographics & Neighbours
Unlike a single family home where you’re on your own lot, or a townhouse where you might share the walls beside you, in a condo you have the possibility of having people below, beside, and above you!
You’ll want to get an idea of the demographic of the building, what your neighbours are like, and who you’re sharing your walls with. The demographic and people in you neighbourhood are often a reflection of the location and amenities surrounding you.
Are there good schools? Is it close to transit? Is it mostly renters or owner-occupiers in the building? It’s important to consider what type of people will the areas you’re interested in attract.
Size
Find out the square footage and make sure the furniture at your existing place (or the furniture you plan to purchase) will fit in your new condo. Consider the size of the bedroom(s) and whether it’ll feel tight, and what the function of each room will be – does the size of each room work for you and your lifestyle?
Flow & Floor Plan
A floor plan can make or break the way a unit feels, and there are times when a bigger square footage can FEEL tighter than technically smaller units because of the flow and floor plan. Is the floor plan choppy or closed off? Is it awkward? Is it functional?
Often times an “open concept” floor plan is more popular, but consider overall functionality and how it works for you.
Pro tip: If you’re purchasing a presale condo and they don’t have a show home of your unit floor plan, ask the sales staff if there are other buildings as a part of the developer’s previous portfolio and see if they have a copy of the same floor plan!
Maintenance Fee Amount
The maintenance fee, also known as the strata fee, is an amount that is paid on a monthly basis (typically the 1st of each month) that goes towards covering the operating expenses of the building and contributing to the contingency reserve fund.
You’ll want to consider the maintenance fee and costs of ownership to make sure that it is within your budget. However, you’ll also want to consider the maintenance fee relative to other similar units on the market to make sure it is in line with buyer expectations.
Maintenance fees are a part of mortgage affordability calculations, so if a fee is too high relative to the market averages then this could cause issues for future buyers qualifying. However, keep in mind that a low maintenance fee isn’t necessarily ideal either as it can often mean the contingency is under-funded.
Inclusions in the Maintenance Fee: Utilities, Amenities, Caretaker
You’ll want to know what amenities are included in the maintenance fee so that you know any added inclusions that you can enjoy!
Some common ones to consider are:
- Property Management
- Caretaker
- Heat
- Hot Water
- Gas (if applicable)
- Water & Sewer
- Snow Removal
- Landscaping
- Concierge
- Any Amenities
You’ll want to know whether it’s all covered, or whether you can expect another bill so that you know the full cost of homeownership before you buy.
Keep in mind though, a risk of amenities is that this is something that the strata needs to cover and insure; therefore, the cost of maintaining a building with a pool and hot tub is often more than one without one.
Storage, Storage Locker or Bike Locker
One of the common complaints about condos is they don’t have enough storage space, so make sure that you pay attention to how much storage there is inside the unit as well as whether or not there is a storage locker included.
Some condo buildings have storage lockers that are allocated to units.
A full size locker is 6’ height x 4’ wide x 6’ deep, whereas a half size or a bike locker is either half height or width of a full size locker.
Having that extra storage space is huge bonus, and can help to store holiday decorations, snowboards, bikes, household items and more!
Parking
Parking is another important inclusion – as not all parking is the same! You’ll want to check:
- the location in the parkade and any barriers
- if multiple stalls, whether they are side by side
- if they are full size or small car stalls
- if they are on the same level as the storage locker
- how close the parking is to the elevator
You should verify the inclusion of parking and a storage locker (if any) on the Form B strata document to confirm that the strata has record of it and they will transfer to you on completion.
Contingency Reserve Fund
The strata’s contingency reserve fund (CRF) can be seen as their savings account. The more saving’s they have, the less likelihood of special levies incurred by the owners there will be. The contingency can also help to fund big capital projects, such as roof or building envelope replacements, and cover any unexpected repairs and bills.
Having a healthy contingency is representative of a well-run strata, and is definitely one of the top things you should be looking out for.
For more details, visit: What is a Contingency Reserve Fund?
Strata Documents and Depreciation Report
Knowing how the strata is run, what maintenance has been done, and what maintenance is required is very important.
Strata documents, specifically the minutes, will tell you important information such as:
- history of noise or other complaints
- maintenance that’s been done & what is to come
- how proactive the strata is and how often they meet
- any issues or red flags to be aware of
- budget & financials of the strata
- maintenance fee increase indication & history of how the strata has dealt with increases or levies in the past
Further to the above, the depreciation report is an important document that assesses the current and future life of key components of the building (ie roof, windows, etc) and how prepared the contingency reserve fund (the strata’s savings) is to fund those costs. It is particularly helpful to estimate when key replacement years are for the strata, whether maintenance fees should likely increase, and how much you should expect to put aside for potential special levies for key projects.
The depreciation report is very helpful when it comes to financial and building repair planning, and will also indicate to you whether the contingency is healthy or not. However, not all strata’s have depreciation reports done so if there is not a report then you’ll need to proactively try to find much of this information yourself.
Check Out This Related Article: Strata Documents to Read Before You Buy
Special Levies
You’ll want to know if there are any special levies in the near horizon. We always add a clause that if a special levy is approved prior to the completion date that it is the responsibility of the owner, to avoid any issues if a special levy is approved after we hand in the deposit but before the move in date. You’ll also want to know if any special levies are proposed in case you want to negotiate for a hold back, or plan accordingly.
Understanding what special levies have been paid in the last 5 years, if any, will give you an idea of the strata’s style of balancing contingency, maintenance fees, and special levies.
For more information about special levies visit our blog:
What is a Special Levy?
Strata Insurance & Deductibles
Insurance premiums have increased significantly which results in a higher cost of personal unit insurance for you as a buyer. Furthermore, many deductibles have increased to rates that are difficult to insure; typically, if the deductible is over $150,000 then you will have reduced options and have to pay a premium.
You’ll want to obtain the strata insurance note so that you can analyze what the strata is responsible for and the existing coverage they have so that you can match your personal unit insurance up accordingly. You’ll want to keep an eye out for WHEN their insurance expires, and what the existing cost of insurance and deductible is for you.
For more information on strata insurance premiums and deductibles, check out this blog: Strata Insurance Premiums & Deductible Increase in BC
Rules
Knowing what you can and cannot do is extremely important in a strata property. Can you rent out your unit? Are you allowed BBQs on your balcony? Are you allowed pets? Is there a size/height/breed restrictions for pets? Are there quiet hours? Knowing the rules and bylaws BEFORE you buy the home will ensure that you understand the condo lifestyle and what comes with it.
Also, keep in mind – not all strata’s are the same with regards to their rules and bylaws, so make sure you read the documents with relation to the building you’re purchasing in very carefully!
Property Management & the Strata
The property manager is there to help guide the strata council with regards to the strata property act, and also help to manage building inquiries, quotes and more. If you’re dealing with a self-managed building, they typically don’t have the same experience or up to date knowledge as a property manager. (but not in all cases) The property manager often significantly impacts how well-run the strata is, so you’ll want to make sure you have a good one.
Figuring out how proactive the strata is and how they run the building is also very important. Are they involved? Do they have a good grasp of what maintenance needs to be done? Are they planning for upcoming capital projects? Do they typically levy or do they have enough money in the contingency? Analyzing how the strata runs a building is a very important part of what to look out for when buying a condo.
Building Construction & Age
Consider the building construction (wood frame vs concrete) and building materials. Is the builder reputable? Is it rain-screened? Pay attention to the age of the building and how construction or building code may differ from options within your price range.
Furthermore, in BC we have a building warranty called the 2-5-10 warranty. The coverage and responsibility by the builder is separated in to years 2, 5 and 10 for certain building items (ie, envelope, structure), and having a building within a 10 year age is often very desirable.
Floor Level, Direction & View
Is this a corner unit? End unit? Inside unit? Ground floor? How much natural light does the unit get? Will it get too hot, and if so does the building allow air conditioning? There’s a lot to think about when considering the pros and cons of each unit and the level, direction & view comparatively.
Floor level typically takes a greater weight for high-rise condos than low-rise ones, as developer often charge anywhere between $3000-10,000 a floor. However, don’t just pay attention to floor level, as a unit on the 12th floor with a NW view may be more desirable than a 25th floor with an E view facing in to another building.
With low-rises, keep in mind that the top floor units are typically more desirable as you don’t have any one above you. (Wood frame low-rises typically carry noise & sound from unit to unit more than concrete high-rises) Ground floor units are often nice for those that want a large patio, or have kids that have the ability to stomp around without complaints from neighbours. However, keep in mind for ground floor units that privacy is often an issue, so you’ll want to consider the direction, fencing or gates when purchasing a ground floor unit.
Development Plans for the Area
Further to knowing the view, you’ll also want to know if that view is protected. What’s the upcoming plans for the area and will there be any rezoning or tear downs that will result in the view being blocked?
Understanding the long term plans for the neighbourhood can be both an opportunity to get in early and make a good investment, but if it’s already developing and going to be a construction zone for the next 10 years you’ll probably want to factor that in. Learn more and determine whether the unit and the area meet your lifestyle plans.
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If you’re looking to hire a realtor with experience to help guide you through the process of buying a house in Vancouver BC (and surrounding areas!) or help estimate the cost of buying a home, reach out to us today at 604-319-0200 or email [email protected] for realtor representation!
