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Costly mistakes you must avoid when buying a condo (especially as a first time home buyer)

“Always pick your yard based on your Summer lifetstyle.”

~ KARL

May 31, 2018 - Karl Yeh

So how do you avoid the costly mistakes when buying a condo? The ones that could set you back financially for several years. In this episode, we discuss what condo buyers must do to ensure they make the right decision. We explore questions to ask when buying a condo and the potential of a condo as an investment property. 

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Transcription:

Karl Yeh:

Hi, everyone. Welcome to another edition of Homebuyer's School.

Today I'm joined by Karen McDonald, Community Manager with Brookfield Residential.

Today, the question we're going to answer is:

What are some avoidable mistakes when buying a condo?

Karen McDonald:           

Well, the biggest answer to that is be an educated buyer. Make sure that you know-

Karl Yeh:                           Watch these videos.

Karen McDonald:           

Yes, watch the videos.

Make sure that you know everything that you can know about the new home that you're buying.

[00:01:00] I think in a multifamily development, any kind, it's important to have all the condominium documentation in advance.

Make sure that you do a proper review of it.

In a brand new home, you have the 10 days, the conditional period, to review that. That's Alberta Condominium Property Act.

That's what you have that 10 day conditional period for. Make sure you use it.

Consult the professionals, your realtor, your mortgage broker, your builder representative.

They [00:01:30] will have all of the answers to your questions that will help you and make this monumental decision in buying your brand new home.

I would say for a resale in particular, making sure that you know whether there have been any special assessments, levies that have been put upon homeowners in the past:

  • Have they been remedied?
  • Did they foresee any coming up in the future?
  • How old is the building?

That's all things that you have to take into [00:02:00] consideration when you're considering your total monthly expenses.

Karl Yeh:                          

When you mentioned special assessments, can you go into that a little bit more?

Karen McDonald:           

Yeah, special assessments, they're additional financial contributions that are imposed upon homeowners when there is deemed to be maybe not enough money in an operating budget or in the reserve fund to cover maintenance and repair of the home.

That can be something that happens [00:02:30] to a large degree in older homes.

Again, multifamily, new multifamily builds have protections in that for warranties.

You could buy a resale that still has some warranty included in that as well, too.

But overall special assessments are something that happens like in a single family, any kind of home that you have that would be maintenance of the home for anything in the future.

Questions to ask yourself when buying a condo

Karl Yeh:                          

What's one or two key [00:03:00] mistakes you've seen condo buyers do in the past that you want to make sure the audience try to avoid? [crosstalk 00:03:07]

Karen McDonald:         

Again, it's about being educated.

It's about figuring out where you're going to be in the next stages of your life:

  • If the is something that you're buying as your first home, where do you see yourself in three to five years?
  • Do you think that there's a possibility that you're going to move soon?
  • Will you be transferred for work?
  • What are you going to do for work?
  • From there, [00:03:30] will you have a family?
  • Will you need more space?
  • What's the requirement going to be for you in the next five years?

If you're downsizing, is it going to be enough space for you from your single family larger home? I'd say those would be the biggest items that I would say.

A lot of buyers, they might rush into, make the mistake of jumping into something really quick without really thinking about future use.

Karl Yeh:                          

How about buying condo as an investment property?

What would be [00:04:00] some of your thoughts on that?

Karen McDonald:           

Well, really buying a condo as an investment property is a great thing to do.

You have the maintenance-free aspect of that.

You, as a landlord, you don't have to take care of that yourself.

You don't have to rely on your tenant to maintain that property for you. It's done as a collective. It's making sure that everything is done within the development.

It all looks cohesive. It's all the same.

Condo fees are great for [00:04:30] investment properties. It really saves landlords from having to take care of that property themselves.

Karl Yeh:                          

Perfect. Well, thank you very much, Karen. Thank you very much, everyone, for joining us and we'll catch you next time.

 

Recommended Watch

So of our other videos that you may be interested in watching related to this topic are:

How to find the right house for me?

What do condo fees include (and how do they impact your next home purchase?)

What are proven tips for first time home buyer's in Canada? (to help you make the best decision)

What are common mistakes first time home buyers make?

 

Your turn:

Let us know if you have additional condo questions or home buying questions that we can answer by submitting them in the comments section below. 

Homebuyer's School publishes new content weekly so subscribe or check back regularly for the latest information, strategies and tips from homebuying experts.  

About Karen McDonald:

This is my 12th year with Brookfield Residential.  I have been involved in 8 sites now with 7 in multi-family and 1 Single Family.  I received my certification as a New Home Sales Professional from PHBIA in 2008. 

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