Buying a Condo or Renting
Most likely, you have come across the terms condo and apartment when looking to rent or buy a home in Canada. Have you ever wondered what a condo is? At first glance, it may be thought that condos and apartments are the same.
Most ordinary people use these two words as synonyms in everyday terms; Because condos and apartments have a lot in common. For example, the buildings of condos and apartments are similar, and it is impossible to distinguish them by their appearance. However, condos and apartments are fundamentally different. The main difference between a condominium and an apartment is that a condo is sold, while an apartment is only available for rent. Of course, the differences do not end there.
If you are trying to find the answer to the question, “What is a condo?” Are you staying and want to know the difference between it and an apartment? Stay with us to find your answer. At the end of this article, we will describe buying a condo or renting it and the pros and cons of living in a condo so that you can make the best possible decision based on the cost of living in Vancouver, your lifestyle, and your budget.
Buy condo vs rent
A condo or condominium is legal house ownership and has nothing to do with the building’s construction style. By buying a condo or renting, you will not become the owner of the land, but you will only become the owner of your unit, and the building commons will be shared between you and other owners. Maybe even if you ask the residents of Canada, “What is a condominium?” they will tell you that high-rise residential buildings are called condos. Although it is true in everyday conversations, as we explained, a condo has nothing to do with how the building is constructed. The followings can also be considered a condo:
Residential buildings with less than four floors
Duplex (one unit on top of another) or terraced houses
triplex houses (a set of 3 units)
Vacant lands on which the owners can build a house
There are even commercial and residential condos, i.e. some condos are commercial while others are residential. Condos come in a wide range of prices, sizes, and features. The main focus of this article is on buying a condo or renting.
What are the characteristics of a residential condo?
Usually, a condo is a building unit that you must pass through a shared space like a corridor to enter. Each floor has approximately 4 to 10 units on each floor.
The number of floors may be different, depending on the zoning or density of a city. You can find low-rise (usually 3 to 7 floors) or high-rise (10 to 50 floors) condos.
Common elements of condos may include gyms, swimming pools, etc., while some elements are considered limited commons. In other words, shared space is provided for the owner’s exclusive use but is still under the supervision and control of the board of directors (for example the balcony in the parking lot).
Condo owners will be charged for building services i.e. repairs and maintenance of the facilities. The amount of each unit charge depends on the unit’s specific square footage and that building’s total square footage. Usually, it is the unit’s specific square footage devided by that building’s total square footage.
If you rent a house in Vancouver or an apartment, the rent will not change during the lease. Some apartments are rented on a month-to-month or short-term basis. But usually, the lease contract is one year. After 12 months from the beginning of the agreement, the landlord can increase the rent amount (according to the landlord and tenant act) to the approved amount. This amount varies according to the region, demand and current market rate. In some cases, the rent includes water, electricity and gas costs.
In the case of renting a condo, you usually have to pay a fixed monthly rent, and other costs, such as monthly charges, are the homeowner’s responsibility. Still, if the tenant and the homeowner agree, the tenant may pay municipal fees (HOA fees) and water bills in addition to the rental amount.
Generally, in the same area, the price you need to pay for renting a condo is more than the price of renting an apartment. In many cities, it is usually cheaper to buy a condo than to rent it in the long run.
What is the difference between a condo and an apartment?
The most important difference between a condo and an apartment is that you can buy a condo while apartments are only for rent.
You cannot purchase an apartment in Vancouver. Usually, the owner of all the apartments in a building is a company managing the building and renting out the units. So while it is natural to ask whether the owners of a condo rent it out, you can not ask such a question about apartments. They are all for rent.
Please note, since you can buy a condo and can be the owner, the prior residents need to pay off the the monthly charge. The condo corporation is responsible for collecting the monthly payment and managing the condo..
The second difference between condominiums and apartments is the rugulations. The property management company sets and enforces the regulations in an apartment. All tenants and units must follow the rules and do not have the right to vote. While in a condo, different rules are set by the board of directors and all the units in a complex have to obey. The good point is that the owners have the right to vote, and these rules take into account the needs of the residents in the building.
Also, the landlord sets specific rules for his unit that the tenant must follow. These rules range from restrictions such as not keeping pets and smoking to regulations on hammering nails into the wall and painting them.
So when buying a condo or renting, you need to consider the rules of the complex since these rules may affect your lifestyle.
If you want to buy a condo and rent it, consult with its board of directors and ask your real estate agent to get the articles of association, amendments, minutes and other documents from the board of directors. These documents should be read carefully because their items can affect your decision and interests. For example, in some condos, a limited number of units can be rented or not allowed at all.
Advantages of buying a condo or renting
How does pre construction work in Toronto?
Pre construction Condo
Less maintenance: Since the management is responsible for most parts of a condo, condos are the best option for those who do not want to do these things (maintenance of green space, roof repair, etc.).
A sense of security: in some condos, there are guards at the entrance of the building checking people and things enter. As a result, people living alone will feel more secure. If your working hours are unusual or you travel a lot, you can leave your unit with peace of mind.
Social opportunities: Some condos have special social programs for all age groups. Also, considering that you will meet neighbours in the corridors, the probability of getting to know them increases. Considering that your residence is close to your neighbours, the condo will be the perfect place to make friends. Living in a condo gives you a sense of community.
Low price: Condos are more affordable than other properties due to their small sizes. By buying a condo or renting. You will also receive fewer property taxes. A condo is the best option for first-time homeowners to start life. Because the responsibility for maintenance and repair is with the board of directors, owners will benefit from the advantages of increasing house prices and increasing liquidity (equity).
Amenities: Your condo may have top-notch amenities such as party rooms, business centres, swimming pools, dog parks, covered parking, gyms, and more. Note that the cost of these amenities is shared among all residents.
Disadvantages of buying a condo or renting
Rules: One of the most significant disadvantages of a condo is its restrictive rules. These rules range from garbage collection and noise levels to balcony furniture and the number of pets per unit. Before buying a condo or renting, read the laws and regulations to ensure it is compatible with your lifestyle. Remember that you will be fined for breaking the rules and regulations.
Investment risk: Investing in condos is slightly riskier than in villas. Because if one of the units sells their condo at a low price for some reason or re-mortgages it at a low price to get a mortgage in Vancouver, it will hurt the value of your condo. Because your unit is also located in the same building complex with completely similar specifications.
Less privacy: In a condo complex, everyone can access the building’s common areas, such as the lobby, hallway, yard, and other amenities. Therefore, if you value privacy, a condo may not be the right option for you. Usually, one of the common problems in condos is creating noise. For example, if your upstairs neighbour wakes up early in the morning and goes to his office, his footsteps may wake you up. Therefore, if you want more independence or freedom of action but you also want to manage your budget, maybe buying a townhouse is more suitable for you.
Restrictions on rent: As I mentioned above, you are obliged to respect its rules after buying a condo or renting. In some condos, a limited number of units can be rented. In many condos, you cannot rent the unit after buying it. Therefore, read the rental regulations if you want to buy a team for investment in Vancouver real estate.
Increase in the monthly charge of the condo: As you know, the owners charge a monthly fee to maintain the common areas of the building, and a part of it is deposited into the contingency reserve fund. Due to inflation and increased building depreciation (over time), more money may be needed to maintain and repair the facility each year. Therefore, before buying a condo or renting, get comprehensive information about the building conditions, maintenance costs, contingency reserve fund, and charge increase plan so that you are not involved in overhead costs and can manage your capital properly
Condo Assignments Terms in Toronto