Mark Allen

Thinking of buying a condo in the city? Here is my top 10 list of things to consider:

#1 – Location

As with all Real Estate of course, location, location, location is vitally important when considering current value/future projected values. You’ll want to look into transportation options, demographics, neighbourhood restaurants and nightlife, proximity to the core or other employment, area amenities, grocery stores, parks, schools, area construction and timelines as all of these considerations can be crucial for resale appreciation. Remember to take into consideration the neighbourhood, some are just more desirable than others and don't forget to love your new hood!

#2 – Building Amenities

Condos in Toronto have bowling alleys, massage tables, dog play areas, billiards rooms, media centres, fitness gyms, basketball courts, pools, and aerobics classes. When you’re ready to purchase a condo you should think about what amenities you will actually use on a regular basis, while having all the great amenities is nice – it can significantly impact your fees.

#3 – Condo Fees and Special Assessments

Condo Fees are a monthly fee calculated as a percentage typically by unit square footage and a given cost set out from the beginning by a developer, let’s say .56 cents a square foot (If you have a 640 square foot unit then 640X.56=$358.4). Fees will vary building to building, unit to unit and will increase/decrease/stay flat, usually annually and can include: Water, Heat, Building Insurance, Common Elements, Central Air Conditioning, Parking (Can be an extra fee), Storage Locker (Can also be an extra fee) and some condos, very few and far between, and mostly the older ones can include Hydro, Cable TV.

New build projects are starting leave out more and more. When purchasing a newer Condo you will find that Water, Heat, Hydro could be left out of the fees and will be an extra monthly cost for a buyer.

Fees may be high for certain units/buildings, but you have to think to yourself – well, what would I be paying for a house? Also you’ll have to do all the work of shovelling snow, cutting grass and maintaining overall outside look of your home and who’s going to be your security/concierge? When it’s all said and done Condo fees can actually provide piece of mind and you’ll start to be grateful for the value you might obtain at your building.

Special Assessments are the F word of the Condo world and are charged on top of regular monthly fees, usually as a large one-time hit to the Condo Owner, say $5k - $10k+. You do not want to have your building succumb to a special assessment. This typically means the Condo Corporations budgets are out of whack and the board will charge the assessment without getting your permission for the needed building upgrade. These assessments are calculated using a percentage similar to condo fees, however, these assessments are extremely rare, this is only information to be aware of, don’t be alarmed.

#4 – Taxes, Taxes, Taxes – Municipal Land Transfer Tax + Provincial Land Transfer Tax.

Yes, you still have to pay your annual property taxes in the sky and will be assessed from time to time exactly like a homeowner/landowner. Also, you will have to pay the dreaded land transfer tax when buying a Condo – here in Toronto, you’ll pay both Municipal and Provincial Land Transfer Tax, of course there is some assistance for first-time home buyers (ask me about this).

#5 – Property Management

Property management companies will are vital to your buildings health, and well-managed buildings hold their value, they are also more pleasant to live in. The condo board is responsible for hiring and ensuring the property management company is doing it’s job, and the property management in turn hires the staff for the building; on-site property manager, concierge, cleaning company, landscapers. It’s tough to put a finger on good management until you’ve actually lived in the building a while, things can look good from the outside, but it may be a different story after you move-in. Go to your annual board meetings and vote directors you believe in, also bring up your concerns at these meetings.

#6 – Parking and Storage Lockers

Not all condos in Toronto will offer parking. Most new condo projects don’t even offer parking spaces to suites smaller than 1 bedroom + den. Buying an owned parking space can be expensive, in Toronto we’ve seen builders charging anywhere from $25,000-90,000 for a parking space. If you don’t need parking, this might be an opportunity to save yourself some money, however, it might detract value on resale. If you require parking and the unit you want doesn’t have a spot, look into the possibility of renting in the building (check the bulletin board in the lobby or online message boards) or even on street permit parking, which can be found in certain areas of the city (you’ll have to look into this with the city here is a good place to start - https://www.toronto.ca/services-payments/streets-parking-transportation/applying-for-a-parking-permit/).

A lot of buildings will have storage attached to the unit ownership, but if your Condo unit does not include storage you need to ask yourself.. Do I need a locker? Is it time to purge your belongings? Don’t forget that the amount of stuff you have will exponentially grow the longer you’re living in your condo. Storage lockers can cost $8,000 - $25,000 from the developer and are usually 5 feet depth X 3 feet width X 5 feet height (this can vary though and is not a benchmark). Again, same as parking you may be able to find a rental storage locker within your building, so don’t fret if your unit doesn’t include storage.

#7 – Construction Quality

How can we tell if a building is good quality? Usually we can start with what developer built the Condo, we can examine exterior for flaws from the street, view interiors and all amenities, google for hearsay, and ask around. Toronto is home to some of the best quality condos In Canada, there are great condos, and there are terrible condos – try to buy a great one. Construction quality doesn’t only impact appearance, but it will impact maintenance costs, noise (noisey upstairs neighbours, ugh) and mostly condo resale value. I am  familiar with many condos and builders in the downtown core area, ask about your favourite building and I might know a lot about the Condo building that may not be obvious to you.

#8 – Owner Units Vs. Tenant Units

Higher percentage of owner occupied units generally translates to a more well maintained building, and this means better price appreciation for your unit. A building with more owners also means better care of the common elements (hallways, pools, gym) knowingly because if they need to be repaired, it’s their $$ coming out of the coffer and fees could increase on next budgetary analysis. The percentage of tenanted units vs. owner units is identified in the condominium’s status certificate and usually more than 35% might be cause for concern, this is not a deal-breaker just something to remember. And for an investor a building that turns over tenants or is mainly tenanted, this could be a good thing as you’ll be able to fill your condo suite regularly and potentially for better rental rates.

#9 – Building Architecture and Design

Our city is home to some of Canada’s most iconic Architecture in the residential world. We are growing at an amazing rate and developers are competing at this juncture to build the biggest and best in design. Some of the cities most Iconic buildings are as follows: One Bloor, Aura, The Ritz Carlton, Pier 27, The London, The Berczy, Fashion House, L Tower, One St. Thomas(my opinion only).

I have been predicting over the years that Architects, interior designers and Architecture will be more important across the buyer spectrum in the future. Currently, mostly the higher end of the price range will actually care who the Architect and Kitchen designer was that designed their building, but more and more people understand this can be great for resale. Buildings that were either built shoddily or done by lower end Architecture firms could fall flat in value in the future of our Real Estate market, so choose wisely!

#10 – Views, Views, Views!

Views are one of my favourite aspects of living in a Condo in a city, but akin to other major cities, Toronto develops fast and views can and will disappear so do not buy solely based on views. Probably the only view that could never be blocked is when your condo windows are beside a park, when viewing always be aware that any parking lot can become a condo. Just remember views are awesome!! If you retain a fantastic view on resale – it can soar your comparable sold into new realms (along with other factors of course), however, keep in mind a view that gets blocked by a neighbour building or worse a commercial building can seriously degrade your value.

*The above 10 considerations are information only. Please always look into anything that concerns you when buying a condo or reach out with questions – markallen@royallepage.ca.