Freehold or Condo Ownership?
What is best for you?
In the past many first time buyers automatically assumed that condo ownership was the best option for them with the lower priced options versus owning Freehold. Now-a-days many first time buyers are exploring the option of Freehold as many different town home options are offered at lower and competitive prices. With innovative design style many 3 storey or stacked townhome options are available in developing cities. With the option of owning Freehold at a lower price these new style homes are becoming increasingly popular.
On the flip side many downsizers would sell their homes for something smaller and maintenance free such as a condo. Today we are seeing a mix of condo purchases and freehold options from both of these groups because of the close monthly payments between these two options.
For example the general rule of thumb is every $500.00 in payments equates to approximately $100,000.00 on a freehold mortgage. In many high in demand areas where newer more innovative freehold options have popped up buyers are now exploring both of these routes.
When we see a condo listed for $275,000.00 with $250.00 in maintenance fee’s per month we explain to a buyer that this is essentially the same as a Freehold Mortgage of $325,000.00.
When looking for your perfect home and weighing the different options it is very important to look at the following because not all “Maintenance Fee’s” are structured the same…. So Just WHAT is included?
Typically you will see the following included;
· Building insurance
· Common elements (elevator, gym, party room etc….)
Occasionally you will see all of your necessities included; Hydro, Heat, and sometimes even Cable! It is very important to look at just what exactly is included in your maintenance fee charges to determine any additional payments you will be making.
One thing to note is condo fee’s do increase on a yearly basis-depending on the common elements associated with the unit will weigh in on how much they increase. Every 5 years condos fee’s are re-evaluated and that is where you can see a bigger jump in the monthly fee’s. When looking at a condo it is very important to make sure that the condo corporation itself is in a healthy financial status because that will let you know as a buyer if you should expect a hike in your fee’s.
When weighing your options of freehold or condo living it also comes down to what best suits your life style. There are pros and cons for each type of ownership. Looking at your different options and what pros and cons are associated with each type of option will help to determine which route is best for you!
With many different options available today it is best to talk to your realtor to see which route is the best for you and as an investment. If you have any questions about the condo and freehold options available in your city please contact one of our team members today!
The Fresh Approach Team,
Allana Thompson, Christy D’Oliveira, Kyrsten Feere