The condominium market is increasingly the go-to choice for urban dwellers, with the price of detached houses now out of reach for many. Condo living have distinct advantages in this hot market. It also has its own unique issues, starting with how to find a reputable builder\/developer management company \u2014 and the 4 other \u201cHappiness Factors\u201d you should know before signing the contract.<\/p>\n
The most important documents for you to obtain and read, thoroughly are either the \u201cDisclosure Statement\u201d of the developer, if it is a pre-build, or the bylaws of the community if it\u2019s a resale. The top three items on this list can probably be determined from those documents.<\/p>\n
Depending on whether you\u2019re looking at resale, or pre-build, the ranked issues may differ. For example, you may not yet know who your condo management team would be on a pre-build, unless it\u2019s a large builder\/developer with affiliated management companies, such as Tridel. Where you are unable to find out who will manage your community, a \u201creputable builder\u201d moves to the top of your \u201ctop 5 things to consider.\u201d<\/p>\n
However, all things being equal, the management company for your community is the main determinant of your long-term happiness \u2014 or unhappiness. Real Estate agents are quick to place condo management near the top of the list for decision criteria.<\/em><\/p>\n Happiness Factor #1 Condo management tops the list<\/strong><\/p>\n While a reputable developer-builder is a close second, many experts say that the management team contracted or hired by the condominium corporation is key to living happily ever after in a condo. With larger builders it\u2019s fairly safe to assume a top property management team, such as Del Property Management, will take on the role. In fact, if you have two short-list properties, one where you\u2019re fairly certain who will manage (assuming they are a good company), and one where you can\u2019t determine it, many people will go with the condo with the good management company.<\/p>\n First time condo buyers often don\u2019t even think to ask this question. Why is this so important? After you buy, for many years, you\u2019re going to rely on a good management team and a solid condominium board to make your life a happy one. Nothing makes a condo-dweller unhappy faster than a mismanaged community.<\/p>\n Today, important new issues make good management even more important, such as: short term rentals (i.e. airBNB), and the legalization of marijuana in Canada. These issues are fairly new to market decisions; your management team and condo board have the ability to make your life wonderful, or miserable. A thoughtful board would likely pass bylaws prohibiting short-term rentals \u2014 imagine a community, where your neighbor on the 12th floor is different every day.<\/p>\n How to Choose?<\/p>\n Most experts lean towards well-established management companies with ten years or more experience and a large portfolio of homes. Ideally look for : Happiness Factor #2 A reliable builder\/developer (especially for pre-build)<\/strong><\/p>\n Often the biggest concerns from buyers new to pre-build condos is uncertainty. Uncertainty brings stress, not Happiness. In the newspaper they read a horror story of a boutique developer giving back deposits to people after years of waiting so they can redesign the building and resell it for the hotter market at higher prices.<\/p>\n The fear is mostly ungrounded. Very few developers act this way. Never-the-less, it\u2019s hard to overcome the big fears and uncertainties : The happy solution?<\/p>\n Especially for newer buyers, it makes sense to work only with well- established developers with a minimum of 10 years (preferably much longer) experience \u2014 and many already-built, successful communities. The track record tells you that whatever promises they make, they\u2019ll try to keep. They didn\u2019t stay in business that long, with a mostly intact brand reputation, without a high degree of customer satisfaction.<\/p>\n As with management companies, it\u2019s useful to look at all credentials: awards, industry accolades, industry firsts, long history, and well-managed existing communities. Arguably, the latter item is the most important. Really research those existing communities. Are they a happy owners? Are they well managed? Are there issues?<\/p>\n At the end of the day, unless you\u2019re hard set on location and boutique features above all else, the builder\/developer\u2019s reputation is more important.<\/p>\n Happiness Factor #3 Percentage or Rentals<\/strong><\/p>\n You were expecting location, right? Well, for a pre-build you might still place location here (or number one, depends on you). But for many people, today \u2014 and certainly as a \u201cHappiness Factor\u201d \u2014 the potential for a lot of rental units in a community is a deal-killer. Regardless of great location, if there could potentially be troublesome, noisy tenants, condo home dwellers will usually eliminate a high-rental ratio community \u2014 happiness goes right out your twentieth-floor window.<\/p>\n On the other hand, an investor-buyer might flip that around. A community that not only allows, but encourages, rentals would be a positive choice factor for an investor-landlord buyer.<\/p>\n How do you know? If it\u2019s a built community, the bylaws are straight-forward. They do, or they do not. Pre-builds also must set out restrictions and bylaws in a \u201cDisclosure statement.\u201d Read the fine print. Many of the top ten decision factors are contained in that document.<\/p>\n Happiness Factor #4 Location<\/strong><\/p>\n Number four. And it\u2019s all up to you. Close to transit always costs more. Hot neighbourhoods cost more. Resale pricing follows similar logic. Location is usually more important than price for most buyers. One of the key reasons to buy a condo, versus a house, is to get a better location.<\/p>\n Happiness Factor #5 Budget Adherence<\/strong><\/p>\n There\u2019s a difference between price and budget. Your budget is fixed by your resources \u2014 and is a most-important \u201cHappiness Factor.\u201d Struggling to pay the bills is not a recipe for \u201chappily ever after.\u201d Price is more subjective, and based largely on location, builder reputation, upgrades to finishes, size, amenities and other community features. All other things being equal, many people will pay more for a well-managed building (that doesn\u2019t allow short term rentals and has a great management team) over a larger unit from a less credible community.<\/p>\n Although many experts separate condo fees into a separate category, it is also part of budgeting and pricing and should be considered as just important. Unhappy is defined by that notice that condo fees are going up. Important questions such as what these fees include \u2014 importantly, do they include utilities \u2014 should be factored in to any decision. For pre-builds the fees are usually an estimate from the builder\/developer. Remember, that in the 2nd and 3rd year of a new condo, fees normally increase as costs for maintenance start to kick in. Older buildings tend to have the highest maintenance condo fees.<\/p>\n Other Factors<\/strong><\/p>\n There are many other factors that play into your personal situations, not least of which is the opinion of a building inspector (for resales). Some people really have to know about the potential for future \u201cspecial assessments\u201d \u2014 older buildings may have these as they age, to pay for refurbishing big ticket items like elevators and roofs. Size of community is often important (different people like big or small communities.) Most of these are more subjective. The above top five impact all condo buyers and owners.<\/p>\n
\n\u2022 more than 10 years of expertise, preferably much more
\n\u2022 the actual resumes of managers in that company (Similar to mutual funds, where you want to see the actual resume of the fund manager)
\n\u2022 awards track record: everything from customer service, to industry innovation to environmental programs and recognitions
\n\u2022 depending on your personal preference, look for companies progressive on environmental issues, recycling and green energy. Some companies pride themselves on their \u201cgreen programs\u201d (For example, one of Tridel\u2019s slogans is \u201cBuilt Green\u201d
\n\u2022 check the better business bureau, online complaints and reviews \u2014 but bear in mind online reviews and information is often fabricated or biased, so be sure of your source
\n\u2022 look for companies who focus on community services and community living in a style you appreciate. Some companies are famous for strong management of common amenities, for example.<\/p>\n
\n\u2022 you\u2019ll wait forever, you\u2019ll grow old and grey before you move in
\n\u2022 you could lose your deposit if the developer is in trouble
\n\u2022 after all that waiting, you\u2019ll be surprised at how different the unit is from your expectations.<\/p>\n