Making the switch to condo living
Financial security a major motivator behind the move
By Denise Deveau
For Postmedia News March 30, 2011
For Sara Kinnear, an investment firm lawyer in Winnipeg, moving from her house to a condo was the perfect way to simplify her life.
After three years of owning a detached home, she realized that the maintenance chores were more than this busy professional wanted to handle.
"There weren't any big problems, just the normal stuff around the house," she says.
"But having to arrange time to be at home to have people fix things and getting estimates .. It was too much of a drain on my time."
Condo living suits her lifestyle much better, she says.
"I like the fact everything is on one floor, it's on a better bus route and I don't have to have people look at the roof when it needs fixing," says Kinnear.
"Someone else will do that for me now. And I don't have to shovel snow when it's -40 C or mow the lawn when it's 30 C."
Kinnear is not alone in preferring the maintenance-free lifestyle that condominium living has to offer after experiencing the ups and downs of home ownership.
Jack Courtney, assistant vicepresident of advanced financial planning for Investors Group in Winnipeg, says he's seen the trend happening within many families, including his own.
"My in-laws sold their house to move to a condominium, not because it meant a cost savings but because it could give them more freedom to go to the lake and other things."
They made the move despite the fact they had a home with a pool that overlooked a golf course.
"He liked to golf, but didn't want to have to cut the grass or look after the pool anymore to do it," Courtney says.
Urban centres are seeing a growing influx of people moving back to condominiums after going through the life cycle of home ownership, confirms Andrew Bodnar, a sales representative with Re/Max Condos Plus in Toronto.
"Maintenance is a big reason or they simply kept a house to accommodate a family that has moved out. With condominiums, there's a lot of comfort, less stress and enough room and amenities for people to enjoy themselves."
Financial security is also a major motivator, he adds.
"We see people in different financial stages of savings who want to use the equity in their home to increase their cash flow later in life."
Courtney agrees the transition is often motivated by a need to free up capital for retirement.
If this is the intent however, he advises that prospective buyers make sure they understand all the expenses involved when making the move, from closing costs and commissions, to acquisition and maintenance fees.
A major consideration in making the switch from house to condominium is the nature and extent of the capital repair funding for the property you're considering.
"Sometimes capital repairs on a condominium property can be significant if there isn't a sinking fund in place," Courtney says.
"In fact, if you're looking at a property and the condo fees seem out of whack or too low, I would be suspicious and start asking questions."
Otherwise, you may get hit with a big assessment for a major repair to a parkade, for example.
"I knew of one property that was a converted highrise apartment block, where the tenants were stuck with a huge foundation repair issue and there was no fund put aside," he says.
The best defence for prospective owners is to examine the condominium owner's agreement carefully, Courtney advises.
"I would hope that a real estate agent dealing in condo sales would be familiar with the process," he says.
"A lawyer definitely should be. Have them review the terms and explain them so you have a better understanding of what you are getting into. Don't be afraid to ask, where is that $400 a month fee going and how is it used?"
When it comes to fees, Bodnar says it's relatively easy to manage them based on the available amenities.
"Most recognize there's a correlation between fees and amenities. You might have a couple looking to streamline expenses, so if they are concerned about costs, they may look at properties that have a smaller gym or don't have a pool."
He advises restraint for people on tight budgets who need to secure financing.
"A $100-a-month reduction could be the difference between getting that approval or not."
