Recent reports from the Toronto Real Estate Board (TREB) have hinted that as much as 42 per cent of all homes sales in Toronto are condo residences.
Yet, while condos offer their share of benefits over freehold houses – including enjoying an ever widening price gap of $300,000, offering a low maintenance lifestyle as well as easy access to transit and entertainment – many buyers are dismayed by Condo Fees.
At an average $0.50 per square foot, condos fees can represent a fair share of your monthly budget on top of your mortgage. With that in mind, we’ve decided to cover how condo hunters can minimize how much they spend on monthly maintenance fees when looking for a new unit.
1.) Forgo upgraded lifestyle amenities
Condo Fees - Amenities If you don’t fancy yourself a swimmer, it’s perhaps best to look for a condo that doesn’t feature a massive indoor pool.
Why?
Swimming pools, much like, gyms, large landscaped courtyards and concierge services, cost money to operate and maintain. Money that you’ll have to pay on your end through monthly condo fees.
Reports have suggested that condominiums with multiple amenities (gym+pool+concierge) can increase condo fees by upwards of 30 per cent.
If you expect you’ll seldom use the on-site amenities and are looking to maximize your monthly savings – you’ll want consider ditching high maintenance amenities such as tennis and basketball courts or swimming pools.
However, if you enjoy living an active lifestyle for example, don’t simply rush and skip out on gym amenities to save a few extra bucks only to regret it later. It’s key that you pick a condo that both suites your lifestyle and your budget requirements. It’s about putting in what you get out.
2.) Buy new
While a number of older condominiums offer condo fees that sit below the city-average, more often than not, older buildings carry heftier monthly maintenance costs compared to their newer counterparts.
As buildings age, utilities and services need to be updated and more closely maintained, which in turn, lead to a slight jump in fees. Older condos also tend to be larger, and since condo fees are calculated by square footage of a unit, you can end up paying more on maintenance.
On the other hand, newer condos feature the most up-to date utilities and are often smaller in size. That means less of your monthly budget will be funnelled into condo fees.
3.) Buy Small
If you’re looking to live in the heart of the downtown core, it’s likely you value location over square footage in the first place.
With condo fees predominantly calculated by square foot, if you’re looking to minimize costs – you can opt for a smaller unit.
Of course, it’s important to take into account your lifestyle and consider the fact you should pick a residence with at least the next five years in mind. Don’t go too small and force yourself to move in less time – it’s about balance.
4.) Consider going for a condo townhouse over an apartment
Pay less Condo Fees - condo townhouse A number of condo townhouse developments are sprouting up across the city, and unlike their freeholds counterparts, condo towns offer a maintenance free lifestyle in exchange for monthly condo fees.
Yet, with a lack of elevators (along with the cost of maintaining them) and many offering a lifestyle that’s more in tune with a traditional single family home – meaning no underground parking or access to amenities – it’s often the case that condo townhomes offer lower monthly maintenance fees than their high-rise counterparts.
However, it’s important to note, this isn’t necessarily true in all situations. For example, when townhouses are part of a bigger condo tower development, fees can often be on par as the high-rise units as access to the gym, swimming pool etc will all be shared.
5.) Opt for a towering high-rise
Towering high-rise condos don’t only offer better views.
With more units and a larger number of residents sharing the collective costs of maintaining the building, condo fees are often significantly lower in major developments compared to more intimate boutique buildings, where costs are distributed amongst a smaller pool of people.
Remember, there is power in numbers.
6.) Get to know the condo board
The duties of a condo board largely revolves around maintaining common element areas, enforcing bylaws and attending to residents’ concerns.
The board also has a huge influence over finances and approving budgets of the condo’s daily operations – which in turn, has a huge impact on monthly condo fees.
With that in mind, it’s a smart move to do some investigating into the board. Interview a handful of people currently living at the condo you’re interested in and ask them about condo fees and whether they’ve seen substantial spikes over the years.
Also raise questions about whether the condo board has been effective at addressing peoples’ concerns and their overall experience with the building.
It doesn’t have to be anything formal. While touring a building, if someone happens to be casually passing by, simply voice that you’re considering moving in and want to hear their opinion. Most people will be willing to share a few good nuggets of information. After all, they were hunting for a condo at one point as well.
With your realtor by your side, it’s also smart to do a bit of digging to see whether the board is facing any legal issues.
You can even take an extra step and pay to view a status certificate for the unit you’re interested in, even before putting down an offer. While it may set you back around $100, it could save you in the long run by giving you insight into the reserve fund, insurance policies and whether board has faced legal issues in the past. However, it’s only really recommend you do so if you’re highly keen on a particular condo. Viewing a status certificate is always a condition upon putting an offer on a new unit.
7.) Talk to your real estate agent about condo fees
condo fees real estate agent If avoiding hefty maintenance fees is high up on your list, it’s best to share that with your real estate agent.
Why?
Many agents are familiar with maintenance fees and condo boards of particular buildings – especially if they’re a condo or neighbourhood expert – and can help point you to certain residences that are easy on the wallet in terms of condo fees.
Better yet, if your agent had a previous client buy in the same condo you’re eyeing, they can connect you with him or her. Therefore, you can learn first hand from those who previously purchased in the building about condo fees and whether they increase substantially year over year.
8.) After you buy, get involved
It doesn’t end when you’ve signed on the dotted line. After moving in, take steps to show up and get involved in condo board meetings, participate in voting and consider running for a position in the condo board.
That way, you can help ensure your concerns are voiced, you can learn about where budgets are directed towards and understand why or if cost increases have to happen. It’s also a platform for you to ask questions about the reserve fund, insurance, deposits and more.
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