The Roadmap to Buying Your First DTK Condo
So, you’re fond of condos? In the Kitchener-Waterloo Region, there sure are a lot of options. From Uptown Waterloo to Downtown Kitchener there is a condo for everyone. But, before you go ahead and buy the first flashy, razzle-dazzle, high-rise studio apartment that has all the amenities your heart desires, we should probably talk about a few things that go along with purchasing your first condo.
First up are condo fees.
Something to note about condo fees is that they are not all created equally. Some buildings have hydro, water, gas, building insurance (you will still need your own insurance coverage for your unit) and the amenities all included in one monthly fee. While others may only include the common elements, exterior maintenance, and parking. These monthly fees range from building to building and significantly increase when one of the common elements is a pool. Pools are more expensive to maintain, and therefore adds to the amount of your monthly condo fee.
Condo fees – no matter what they do and do not cover – play a role into your affordability.
I’ve often found that first time home buyers will get pre-approval for a mortgage and be approved for X amount of dollars, and assume that means they can buy a condo for that amount, or close to it.
For example, if you are approved for 400K, that does not necessarily mean you can buy a condo for 400K (or even 375K) depending on the monthly fee. Roughly, $100/month translates into 20K buying power. Therefore, if you wish to purchase a condo for 375K with a $300 monthly fee, that works out to minus 60K from your budget (condo fees x .20), meaning you can purchase a condo for 310K, not actually 375K. It’s important to remember this to help save yourself some time and upset when looking – not to discourage you.
Monthly condo fees are not set in stone – they can increase or decrease, but it’s usually the former. It’s important to review the building’s status certificate in order to get a snapshot of the buildings financials. Essentially, the status certificate is a document that provides basic and essential information concerning the financial status of a unit, and of the condo corporation. This document will help you as the buyer to see if there is any red flags pertaining to the building – i.e. if they have any special assessments out on the building that, for example, could say the entire building needs new windows (which would cost unit owners money).
It will also show how much money is in the reserve fund. The reserve fund is basically what it sounds like – a fund of money reserved for when maintenance issues arise. While most buildings should have a healthy amount in there, this is not always the case, and why it is so important to do your due diligence before making the investment in a particular building. By reviewing the status certificate it will open up doors to more information for you.
Do your due diligence prior to purchasing any condo
It’s also important to know the rules and regulations of the building prior to purchasing in order to verify everything fits with your current lifestyle. The condo will have set out rules and regulations for the building, with some having restrictions on pets. These rules can include the weight, size, and even breed of the animals that are allowed. When considering purchasing a condo it is important to make sure you know the rules that come along with that and to make sure they are something you are onboard with.
Kitchener-Waterloo has seen a boom for the desire to live in condominiums and development to build more. They offer maintenance-free living with desirable amenities such as gyms, pools, party rooms, patios, etc. While these common elements are great, they may not always be as well-maintained as you’d hoped for, making it important to do your research on the property management company of the building.
Each condo is unique, and that is why it is so important to make sure you educate yourself on the properties before buying. Things such as what the condo fees are and what they cover, if they are consistent or have drastically increased each year, whether or not the property management company and condo corporation are reputable, and the rules and regulations of each building are all important factors in making the decision on which condo is the right one for you.
