Understanding Your Choices When Buying a Condo in Grande Prairie.
Condos are attractive to new home buyers for a number of reasons; the fact that you can buy them with only 5% down in many cases and build equity over time are only two of the benefits. The Condominium Property Act describes two separate types of condominiums. These are conventional condos and bare land condos. Let’s look at the differences and similarities between them.
A conventional condo is the apartment style residence that you own. You take out a mortgage to buy it. You own everything within the walls, ceiling and floor. It may or may not include a balcony or patio that is also yours. Everything outside of the condo is owned and maintained by the association. The condo association maintains the hallways, the HVAC system, the boilers, the roof, and the common outdoor areas. If there is a pool, they or the property management company they hire maintain it. If there is a clubhouse, the condo association or the property management company manages it. Because of these common areas owned by everyone in the association, condo owners pay monthly or annual condo association fees in addition to their mortgage.
Bare Land Condos
Bare land condos include a plot of land. They may be detached single family homes in what looks like a suburban neighborhood, though many amenities are provided only to the condo association like the local parks and pools. Bare land condos often include townhomes and duplexes, providing each of these residents with a modest yard. In some cases, mobile homes can be built or parked in bare land condominium associations. The common areas are still maintained by the condo association or the property management company. Again, fees to the condo association are due as a condition of living there. One of the major selling points of condos is the fact that someone else is doing the snow removal, the yardwork and, sometimes, providing security services. Condo fees generally cover the road maintenance, the sewers and other infrastructure.
Factors to Consider Before Buying a Condo
Whether you’re seeking a traditional condo in Grande Prairie or duplex in a bare land condo, there are a few things you need to know. First, the condo association is bound by many rules you must abide by if you’re going to remain there. Read the contract carefully. If they don’t allow pets, you could face costly fines or be evicted for getting a dog. They may put limits on the number of pets or the type of pets. Some condo associations are in age-restricted communities, while others limit what you can do with the property. You may be able to live there yourself but cannot sublease it or put it up on Air bnb. They often have restrictions on what you can do in the common areas; you may not be allowed to put up certain types of exterior decorations, or you may not be allowed to use more than one parking space for visitors. You could run into rules prohibiting home based businesses or saying you can’t have outdoor furniture on the patio.
Securing a Mortgage for Condos
Regardless of the type of condo you want to buy, you’ll want to consult with a Grande Prairie mortgage broker before assuming you can qualify for the property you want. For example, qualifying for a $400,000 mortgage on a single family home doesn’t mean you can buy a $400,000 condo. The condo association fees are owed in addition to the mortgage payment, and that means you cannot qualify for an equally expensive condo. Assume that every $100 you pay in condo fees takes $10,000 off the price tag you can afford. If the condo has $400 in condo fees, then you could only qualify for a $360,000 condo though you might be qualified for a $400,000 house. Talk to a Grande Prairie mortgage broker to determine how much condo you can afford before you go shopping.
That is aside from the financial health of the condo association itself. If they’re not planning adequately for future repairs, you could be hit with higher condo association fees later or a one-time levy to pay for that replacement roof. Read their financial reports to see if they have a history of low fees offset by hefty bills. Give preference to condo associations with a good reserve fund and decent insurance coverage over one with low fees that could cost you dearly later.