When you are thinking of making the change to condo living, there's a lot to consider.
Over the past few decades, condos have become an ever-more popular housing option for everyone. In the coming years, many Canadians will be considering a shift to condo living. In particular, as Canadian baby boomers move into retirement, with no children at home and a focus on travel, many are opting for more compact living arrangements.
If you occupy a single-family home now, switching to a condo can change many aspects of your day-to-day life, requiring adjustments that are social, emotional and financial.
Here are 3 things to consider as you plan your move.
What's the reason for a move?
Understanding your motivations for moving can help you be fully prepared.
Maybe you're looking to reduce your overall cost of living; or you want to reduce your housing-related obligations, such as maintenance and upkeep. You could be facing a life transition, such as becoming an empty nester, and your home now seems too big; or you're considering a move to a different location since you are no longer commuting to work.
Once you've identified the primary factors driving your decision, you’ll be in a better position to identify the motivation for a potential move, whether now or later.
Is a condo the right choice for you?
Condos typically have less space than a house. By moving into a condo, you may be committing to editing your belongings and re-thinking your furniture. Larger items such as sofas, dining room tables and even beds may need to be swapped out for smaller, slimmed-down versions that work better in a smaller place.
One of the benefits of condo living is that you won't be directly responsible for any outdoor maintenance or upkeep, meaning you can leave your snow shovels and rakes behind and cross the yearly window-washing appointment off your calendar.
From a financial perspective, it's important to recognize that while you may be downsizing your space, you may not be downsizing your budget. Although the price of a condo may be less than the selling price of your current home, you’ll need to incorporate condo fees into your monthly cash flow. These fees cover not just repairs and maintenance but also the cost of shared amenities, like a gym, pool, concierge and ground maintenance.
Parking and storage facilities may add to your financial considerations as these items may be considered extra amenities and will result in higher monthly maintenance fees. Consult with your advisor on how additional monthly fees will impact your retirement plan so you can ensure you are making the right financial decision.
Condos are lower maintenance than detached-house living, but you'll be in closer proximity to your neighbours than you may be used to. Shared walls and common space — both indoors and outdoors — can lead to differences of opinion on appropriate sound volume. On the other hand, shared space and social activities can also lead to new friendships.
All of these lifestyle and budget changes should form part of your overall assessment when you start thinking about how and when you might consider a condo move, and what kind of condo would be appropriate for you.
Putting your plan into action
If you've decided to move ahead with condo living, conduct due diligence as you would with any major investment. Use your real estate agent, lawyer and financial advisor as resources to guide you through this transition.
Not all buildings, or condo fees, are structured the same. Older buildings may have more stable fees, while new buildings might have lower initial fees that can escalate over time. Older buildings in particular may see one-time fees for improvement, such as window, parking structure or roof repairs, which can require a substantial financial reserve investment. It's important to review the condo's reserve fund and be informed of pending projects, as these factors will effect increases in the maintenance fees.
Next, examine the building's policies. Condos may have regulations regarding pets, noise and smoking. Is the building geared towards a particular age group or is there a mix of household ages and types? Are all occupants owners or long-term renters or is there a high number of short-term vacation rentals? Getting a sense of what the community is like — and the governing rules it's agreed to — may serve you in selecting the right home.
Finally, as with any housing purchase, you'll want to consider your longer-term plans and the financial investment. If this is the place you'd like to stay in long term, consideration should be given to the presence of stairs, proximity to health-care facilities, and overall design features such as wider doorways and curbless showers. Alternatively, if this is a shorter-term purchase, is there a way for you to increase the resale value of your condo through renovations to maximize your return?
Make an informed decision. A trusted realtor and financial advisor can help ensure you're getting a complete picture before you enter into an agreement to purchase a condo. If you're among the people considering the switch to a condo, research and planning can make this an exciting next step.