Return to flip book view

Photo by Serena | PhotographyNews & Tips For Home Buyers, Sellers & OwnersWinnipeg6 ImportantNumbers to KnowBefore You Buy

All over North America,housing markets have gonesuper-nova.Bidding wars, crazy prices andquick sales are making it hardfor first time home buyers toget into the housing market.Many are turning to Condosas an alternative, finding themarket more relaxed anddiscovering thatcondominiums can offer goodvalue for the money.In some areas, such as mycity of Winnipeg, Canada,condo sales have more thandoubled from the normalsales.Condo buyers are well advisedto take a close look at a set ofnumbers for each condo theyare considering.In fact there are 6 crucialnumbers a buyer needs to beaware of, consider andapprove.6 Key Numbers To Know Before You Buy

Buying a Condo: 6 Crucial NumbersFirst time home buyers all over North America are having a tough time when trying to buy their first home. Single-family home(s) are in very high demand, and bidding wars are the norm, driving prices thru the roof and out of reach for young buyers everywhere. That’s why a smart real estate agent will advise his buyers to take a look at a condominium unit as a way to get into the real estate market.Condos o!er a lot of benefits which can not be matched a single-family house, townhouses or side by sides. But some cautious buyers are worried about the monthly fee, whether it's called a condo fee, or HOA fees in other places. I wrote extensively about the myths of condo association fees, reserve fund, special assessments, condo by-laws, and other condo rules, features and peculiarities.In the end, condo ownership is about enjoying the benefits of condo living and all the advantages that being part of a condo community can bring.So if you agree that a condo purchase is a good idea, here are 5 very important numbers you should focus on. The good news is that these numbers are readily available, and have to be supplied by the condo seller to the buyer before the deal closes. In fact, most of these numbers are readily available from your real estate agent even before you make an o!er. So here goes:1) The Price of the Condo unitSeems kind of obvious. But if a buyer is working with their own REALTOR, it is an easy task to go thru the history of all units sold in the condo building or condo complex. Buying a Condo: 6 Crucial NumbersWhen looking at some smaller condo associations or a brand new condo, sales of units might be few and far between.That's when your real estate agent will have to think outside the box. Looking at other condo communities within close proximity, comparing other condos in the same price range as the one you're thinking about and comparing their sales prices. In the end, you want to obviously make sure you're not overpaying for your unit.2) The Age of the BuildingKeep in mind that all unit owners actually own a percentage of the entire building. So the older the building, the more likely it will need renovations, repairs, upgrades, replacement of critical systems such as heating, plumbing and structural repairs.Sudden and unexpected maintenance expenses must be borne by the collective condo owners, and in most jurisdictions, mortgage lenders will NOT lend you (or the condo corporation) money for major repairs. Depending on the size of the building, these repairs can be substantial, often into the million(s) of dollars.Very recently, a luxury condo in Winnipeg notified their owners that the condo board had to raise over $3 Million Dollars, and owners had a couple of MONTHS to come up with that money.So potential buyers should beware of an older condo development or apartment buildings which have been converted into condos. Newer units can rightfully expect fewer maintenance issues in the near term

Buying a Condo: 6 Crucial NumbersFirst time home buyers all over North America are having a tough time when trying to buy their first home. Single-family home(s) are in very high demand, and bidding wars are the norm, driving prices thru the roof and out of reach for young buyers everywhere. That’s why a smart real estate agent will advise his buyers to take a look at a condominium unit as a way to get into the real estate market.Condos o!er a lot of benefits which can not be matched a single-family house, townhouses or side by sides. But some cautious buyers are worried about the monthly fee, whether it's called a condo fee, or HOA fees in other places. I wrote extensively about the myths of condo association fees, reserve fund, special assessments, condo by-laws, and other condo rules, features and peculiarities.In the end, condo ownership is about enjoying the benefits of condo living and all the advantages that being part of a condo community can bring.So if you agree that a condo purchase is a good idea, here are 5 very important numbers you should focus on. The good news is that these numbers are readily available, and have to be supplied by the condo seller to the buyer before the deal closes. In fact, most of these numbers are readily available from your real estate agent even before you make an o!er. So here goes:1) The Price of the Condo unitSeems kind of obvious. But if a buyer is working with their own REALTOR, it is an easy task to go thru the history of all units sold in the condo building or condo complex. Buying a Condo: 6 Crucial NumbersWhen looking at some smaller condo associations or a brand new condo, sales of units might be few and far between.That's when your real estate agent will have to think outside the box. Looking at other condo communities within close proximity, comparing other condos in the same price range as the one you're thinking about and comparing their sales prices. In the end, you want to obviously make sure you're not overpaying for your unit.2) The Age of the BuildingKeep in mind that all unit owners actually own a percentage of the entire building. So the older the building, the more likely it will need renovations, repairs, upgrades, replacement of critical systems such as heating, plumbing and structural repairs.Sudden and unexpected maintenance expenses must be borne by the collective condo owners, and in most jurisdictions, mortgage lenders will NOT lend you (or the condo corporation) money for major repairs. Depending on the size of the building, these repairs can be substantial, often into the million(s) of dollars.Very recently, a luxury condo in Winnipeg notified their owners that the condo board had to raise over $3 Million Dollars, and owners had a couple of MONTHS to come up with that money.So potential buyers should beware of an older condo development or apartment buildings which have been converted into condos. Newer units can rightfully expect fewer maintenance issues in the near term

Buying a Condo: 6 Crucial Numbers Buying a Condo: 6 Crucial Numbers3) The Percentage of your OwnershipThis number is very important, it is determines the cost share for individual units. Remember that when you buy a condominium, you are actually purchasing a small percentage of the entire condo corporation. That will make you responsible for a percentage of any upcoming repairs or maintenance costs as well.It's important to know how large the percentage of your ownership is, as it a!ects your share of the cost. For example a $1 Million repair bill would be just $5,000 per unit owner if there are 200 units in the complex. But if you are one of only 20 owners, that price balloons to 50 Grand.Also, not every unit owner will own the same share percentage. It's usually based on your condos' square footage, so that a 2-bedroom unit will be responsible for a higher percentage than a smaller 1 bedroom condo unit. The exact percentage of your ownership is usually spelled out right up front, but if not, make sure to ask your agent about it.4) The Monthly Condo Fee (HOA Fee in the U.S.)Be aware of the monthly fee, whether it's called a condo fee, homeowners association fees or maintenance fees. Then take a closer look at what it actually pays for. Usually it includes lawn maintenance, snow clearing, parking, management fees and building insurance. The amount of fees and what they include will vary depending on the type of property you are looking at.In high-rise, apartment style condos, this fee almost always includes water, and hot water as well. Sometimes it even includes the unit heat (if the complex has it's own boiler system).So if the monthly fee might scare you at first, you may find that it includes many items you would have to pay extra for, if you were living in a house. This is an often overlooked fact which actually makes condos and a!ordable alternative to houses.To compare common condo fees with house expenses, check this article. You'll see that these monthly payments are not the 'boogey man' many people think they are. Often they include:• Insurance for the building• Parking• Water• Management Company Fees• Contributions to the Reserve Fundand sometimes they even include heat, electricity and cable tv.

Buying a Condo: 6 Crucial Numbers Buying a Condo: 6 Crucial Numbers3) The Percentage of your OwnershipThis number is very important, it is determines the cost share for individual units. Remember that when you buy a condominium, you are actually purchasing a small percentage of the entire condo corporation. That will make you responsible for a percentage of any upcoming repairs or maintenance costs as well.It's important to know how large the percentage of your ownership is, as it a!ects your share of the cost. For example a $1 Million repair bill would be just $5,000 per unit owner if there are 200 units in the complex. But if you are one of only 20 owners, that price balloons to 50 Grand.Also, not every unit owner will own the same share percentage. It's usually based on your condos' square footage, so that a 2-bedroom unit will be responsible for a higher percentage than a smaller 1 bedroom condo unit. The exact percentage of your ownership is usually spelled out right up front, but if not, make sure to ask your agent about it.4) The Monthly Condo Fee (HOA Fee in the U.S.)Be aware of the monthly fee, whether it's called a condo fee, homeowners association fees or maintenance fees. Then take a closer look at what it actually pays for. Usually it includes lawn maintenance, snow clearing, parking, management fees and building insurance. The amount of fees and what they include will vary depending on the type of property you are looking at.In high-rise, apartment style condos, this fee almost always includes water, and hot water as well. Sometimes it even includes the unit heat (if the complex has it's own boiler system).So if the monthly fee might scare you at first, you may find that it includes many items you would have to pay extra for, if you were living in a house. This is an often overlooked fact which actually makes condos and a!ordable alternative to houses.To compare common condo fees with house expenses, check this article. You'll see that these monthly payments are not the 'boogey man' many people think they are. Often they include:• Insurance for the building• Parking• Water• Management Company Fees• Contributions to the Reserve Fundand sometimes they even include heat, electricity and cable tv.

Buying a Condo: 6 Crucial Numbers5) How much money of the condo fees goes into the reserve fundMany buyers tend to focus on the size of the overall monthly maintenance fee (monthly dues) they have to pay. Instead, you should focus on WHERE that money goes. Brand new condos have caught on to this trick, and advertise super low condo fees, such as $125 per month. But a closer look at how this money is spent will tell prospective condo dwellers that this small amount is not sustainable.As we already saw, reserve funds need to be in the many hundreds of thousands, if not millions, of dollars. And a $125/month condo fee will likely only contribute $5 bucks (or less) per month, per unit. It would take a lifetime to add up to the required amount.On the other hand, a more realistic condo fee of $350 per month might contribute $60/month into the reserve fund. If you are a 1% owner, that would mean the fund will grow by $6,000 per month, or $72,000 per year....... a little more realistic.So make sure your agent does his/her due diligence and check out the overall condo fee, where it goes, what it pays for, etc. You may be pleasantly surprised that the fee actually pays for a lot of things a single-family home owner has to buy separately or at the very least, pay more for.6) What is the size of the Reserve FundTake a look at the current level of the reserve fund, which tells you about the financial health of the condo association. Buying a Condo: 6 Crucial NumbersDon't be shocked if it appears woefully inadequate...most of them do. That's because many older condo associations have been allowing the funds to dwindle, in favour of keeping the monthly fees low.But chickens do come home to roost, as they say, and at some point, repair requirements catch up and surpass financial abilities of the savings (reserve funds).So if you find an older condo with a low fund AND low condo fees, realize that there is no such thing as a free ride. It's like buying an old house with an old furnace, windows and roof. At SOME point, you'll have to pay for maintenance. (I'm reminded of the 1970's commercial which touted "Pay me now.....or pay me later".In hot housing markets, buying a condo can be a great option for first time buyers, empty nesters or downsizing home owners. Don't let condo fees, association rules or other factors dissuade you from investigating this route, and you might find it to be the right choice for you. Work with a real estate agent who can help you find the perfect condo in a great neighbourhood.

Buying a Condo: 6 Crucial Numbers5) How much money of the condo fees goes into the reserve fundMany buyers tend to focus on the size of the overall monthly maintenance fee (monthly dues) they have to pay. Instead, you should focus on WHERE that money goes. Brand new condos have caught on to this trick, and advertise super low condo fees, such as $125 per month. But a closer look at how this money is spent will tell prospective condo dwellers that this small amount is not sustainable.As we already saw, reserve funds need to be in the many hundreds of thousands, if not millions, of dollars. And a $125/month condo fee will likely only contribute $5 bucks (or less) per month, per unit. It would take a lifetime to add up to the required amount.On the other hand, a more realistic condo fee of $350 per month might contribute $60/month into the reserve fund. If you are a 1% owner, that would mean the fund will grow by $6,000 per month, or $72,000 per year....... a little more realistic.So make sure your agent does his/her due diligence and check out the overall condo fee, where it goes, what it pays for, etc. You may be pleasantly surprised that the fee actually pays for a lot of things a single-family home owner has to buy separately or at the very least, pay more for.6) What is the size of the Reserve FundTake a look at the current level of the reserve fund, which tells you about the financial health of the condo association. Buying a Condo: 6 Crucial NumbersDon't be shocked if it appears woefully inadequate...most of them do. That's because many older condo associations have been allowing the funds to dwindle, in favour of keeping the monthly fees low.But chickens do come home to roost, as they say, and at some point, repair requirements catch up and surpass financial abilities of the savings (reserve funds).So if you find an older condo with a low fund AND low condo fees, realize that there is no such thing as a free ride. It's like buying an old house with an old furnace, windows and roof. At SOME point, you'll have to pay for maintenance. (I'm reminded of the 1970's commercial which touted "Pay me now.....or pay me later".In hot housing markets, buying a condo can be a great option for first time buyers, empty nesters or downsizing home owners. Don't let condo fees, association rules or other factors dissuade you from investigating this route, and you might find it to be the right choice for you. Work with a real estate agent who can help you find the perfect condo in a great neighbourhood.

VISIT THEIR SITEVISIT THEIR SITEDarcy Berrington of Aire-Serv Heating &AC is our choice for all our heating,ventilation and air conditioning needs. Heis Winnipeg's "King of Comfort"01. HEATING & ACRecommended ProfessionalsAlon Lichtenstein of Great CanadianInsulation is an expert in spray-foam,blown in or Batting & Poly Insulation. CallAlon for all your insulation needs.02. INSULATION

Active Condo ListingsListings byREMAX perfomance realtyWorking with qualified Clients. Call Me Now: (204) 333-2202

R.A. Hughes Insurance have been providingHome, Business and Commercial Insurancefor decades. Family owned and operated,,providing 'Piece of Mind Since 1929".01. HOME INSURANCERecommended ProfessionalsVISIT THEIR SITEThomas Johnson at Cascade Financial willhelp you with all your Life/DisabilityInsurance, as well as Investment Strategyneeds. "Building Wealth - Generation toGeneration"02. LIFE & DISABILITYVISIT THEIR SITEMike Schroeder of Mortgage Architects is aconsumate mortgage professional. Hispersonal service assures that "Low Rates arejust the beginning"03. MORTGAGE BROKERVISIT THEIR SITERob White of Urban Topcoat for all yourinterior and exterior painting, refinishing anddecorating needs. There is 'Quality in hishands and he leaves it in his work"04. PAINTING & DECORVISIT THEIR SITE

Other Publications About CondosWorking with qualified Clients. Call Me Now: (204) 333-2202

S T A Y I N F O R M E D !Sign up for our free, bi-monthly AI-generated newsletter!Your info is kept safe, never sold or abused.Unsubscribe anytime!S U B S C R I B E H E R E