Disadvantages of buying a condo
Condos are often seen as a clever new choice in real estate. Not only are they more affordable and easier to access than conventional dwellings, they also provide numerous lifestyle benefits. For example, condo residents generally have access to amenities such as gyms and pools, along with shared outdoor spaces, parking, reliable utilities, and modern Internet infrastructure.
Condos also make it easier for people to live in desirable locations, including trendy inner-city neighborhoods and attractive seaside towns. The benefits do come at a cost, however, with the disadvantages of the condo lifestyle either a nuisance or a deal-breaker depending on your perspective.
Less control over your investment
When you buy a condo, you are purchasing the individual apartment itself along with the right to use the common areas and assets of the community. Unlike a house purchase, you do not own the exterior of the building or the surrounding land. Depending on the market, this may make it more difficult to build equity and capitalize on your investment, with condo prices more likely to ebb and flow over time.
Condos can also be harder to rent out or sell in some markets, although this differs considerably between cities and neighbourhoods. Last but not least, it may be harder to obtain a mortgage for a condo, with some lenders seeing condo projects as a riskier investment.
Less personal freedom
When you live in a condo, it is your responsibility to abide by the rules and regulations of the Homeowners Association (HOA) or Condo Board. While most of these rules are common sense, some of them may impact your personal freedoms. For example, some condo buildings have restrictions on pet ownership, others have noise restrictions, and some may even apply limits on how many guests you have and how long they can stay.
Even small rules can be a nuisance for some people, including restrictions on where you can hang your washing and how you can park your car. HOA rules can differ considerably between buildings and communities, so it's important to do your research before you move in. Meet the board, talk to your neighbours, and try to imagine living in the community before you sign a contract.
Monthly condo fees
Perhaps the biggest disadvantage, and the most common misconception, of condo ownership, are the monthly fees that you're subjected to. Known as condo fees or maintenance fees, these costs are payable each and every month to the condo board. Condo fees are designed to cover the maintenance of common areas and assets, such as swimming pools, hallways, and staff wages. These fees vary considerably depending on your location, the size and age of the building, and the number of amenities available to you.
Condos fees also include your contribution towards the contingency fund, which is needed in the case of natural disasters and other surprise expenses. While condo fees are often seen as a second unwanted expense on top of your monthly mortgage payments, they can make it easier for you to manage the maintenance of your property asset and provide you with more time on the weekends to do the things you love.