If you’re looking to buy your own place in an urban area, there’s a high chance that you’ve considered buying a condo. Typically, more affordable than a normal home, they’re an ever-popular choice, especially among a younger market. However, there are different condo types, and it’s well worth understanding the differences.
Many people envision a condo like an apartment within a block, but there are many other types on the market. Townhouses and even detached homes are also available to buy as condos and work in much the same way. These are popular in urban spaces, as they offer a more traditional type of home in the city, for a lower price.
In general, the condo corporation or homeowners’ association will manage the communal areas, with each owner paying a fixed monthly fee to cover the costs. Communal areas vary widely among different condominium complexes, though most include a parking lot as a minimum. Others may include anything from an on-site gym and playgrounds to security services and elevators.
Regardless of whether you’re thinking of buying an apartment-style condo, a townhouse or a detached home, there are two main types of condos to be found; regular and freehold. Both have their pros and cons, and your lifestyle will largely determine which is best for you. Do your research to make sure you know all there is to know about this popular housing option.
When you buy a regular condo, you typically own the interior aspects of your unit. The exterior of the building, communal spaces and the land your property is built upon is owned and managed by the condo corporation.
You’re normally free to do as you will with your unit but have no control over the exterior — though different complexes have different rules. Instead, you pay a monthly fee and the corporation takes care of upkeep and maintenance.
There are many advantages to buying a regular condo, though most of these are circumstantial, and you may find it’s not quite the right choice for you.
- Regular condos can be tens of thousands of dollars cheaper than freehold condos, creating an affordable option within a popular urban space, and especially for first-time homebuyers.
- No need to worry about maintenance and expensive repairs to things like the roof, as the condo corporation is responsible for taking care of these things. In some units, you might not even have to worry about pipes and cables that are hidden in the wall, as these might not be within the boundary of what you own.
- You’re normally able to decorate and renovate your unit however you like, though there may be some restrictions in place depending on the individual condo corporation.
- Access to communal areas and amenities.
- Since the condo corporation takes care of the exterior, you can be sure that your neighbour’s properties will always look good on the outside, creating a more attractive neighbourhood.
While the lower price tag is tempting, there are some downsides to buying a regular condo.
- You have no control over the exterior of your unit, limiting how much you can make the place your own.
- Some condo corporations have rather strict rules and may even prohibit you from creating your dream home within your unit.
- You must still pay monthly condo fees even if you don’t make use of the communal amenities.
- You’re reliant on the condo corporation managing the funds properly and keeping on top of repairs and upkeep. If poorly managed, you may be required to pay an expensive one-time fee to cover emergency repairs, known as a special assessment.
Before going ahead with the purchase of a regular condo, it’s well worth taking a good look into the rules and regulations. Be sure you know the boundaries of your unit and what repairs and maintenance are covered by the corporation. Also, check out the accounts and see how well the funds are managed, and the level of transparency.
Freehold condos differ from regular ones in that when you buy them, you typically also buy the plot of land that they’re built on. This means you have more control over the exterior of your property, but the price will generally be higher.
The cost might be higher, but there are numerous advantages that may make this investment worthwhile for you.
- Since you own the land, this is a much more valuable investment than a regular condo. Anything can happen to a structure, but the land can be reused time after time. This is especially valuable within urban areas.
- You have more control over your outside areas as well as the exterior of your building. There may be some regulations in place, however, so check first!
- You are still able to enjoy the communal areas and amenities, but for a reduced monthly fee.
Having control over your own plot of land is great, but there are some downsides to buying a freehold condo.
- You’re responsible for maintenance and repairs of your property rather than the condo corporation. This can mean having to foot the bill for expensive roof or window repairs by yourself.
- As this is the case, you can’t be sure that your neighbours will keep their property looking its best, which can make the neighbourhood look undesirable, a real problem if you want to sell.
- Freehold condos are more expensive than regular condos, so if you’re looking for a budget option, this might not be for you.
Buying a freehold condo can be a great choice, especially if you’re looking to sell in the future. They typically fetch a higher price and are currently more desirable in many urban areas of the country, due to the fact that they hold their value better.
If you crave control over your own property and don’t want to have to rely on a condo corporation, it’s the natural choice.
Before rushing in and buying the first condo you find in your desired neighbourhood, weigh your options carefully and think about what’s most important to you. If price is a major factor, a regular condo may be the better option. On the other hand, a freehold condo might be the better option if you’re looking for more control and a longer-term investment.