When deciding between purchasing a condo or a house, the choice ultimately boils down to factors such as cost, location, and lifestyle. In the following discussion, we examine the advantages and disadvantages of buying a condominium versus a standalone house.
Ongoing Costs
When you become a condominium owner, a significant portion of your maintenance expenses is covered by a monthly condominium maintenance fee. The specific inclusions of these fees vary between buildings, but it is not uncommon in the Greater Toronto Area (GTA) to encounter monthly fees ranging from $0.60 to $1.00 per square foot. While condo fees may give the impression of being costly, there are other expenses associated with owning a house that often go unnoticed. Here are some costs you can anticipate when purchasing a house:
1. Higher insurance costs: For a typical house, insurance expenses are typically around $100 to $150 per month, compared to $20 to $25 for a condo. Condos usually have insurance coverage for walls, roofs, and mechanical systems through the condo corporation.
2. Water and garbage: Owning a house involves additional costs for water and garbage, which can amount to an extra $600 to $900 per year. In contrast, condo fees often include these expenses.
3. Increased heating and electrical bills: Older houses tend to have higher heating and electrical costs, with most clients experiencing monthly expenses ranging from $200 to $400. Condo fees often cover these costs or provide significantly lower rates.
4. Maintenance: It is advisable to allocate 3-5% of the house's cost for ongoing maintenance, including tasks such as cleaning eavestroughs, ducts, furnace servicing, plumbing, and landscaping.
5. Significant unexpected costs: Even in fully renovated homes, unexpected expenses can arise, such as sewage backup, flooded basements, or leaky roofs, which can be financially burdensome.
6. Renovations: If you purchase a non-renovated house, you should be prepared for potentially larger and more expensive renovation projects compared to condos. Renovation costs can differ significantly due to upgrades in electrical, plumbing, roofing, as well as variations in size and age between condos and houses. It's wise to expect renovations to be twice as expensive as initially budgeted and take three times longer to complete.
For comparison purposes, a 1,000 sqft 2-bedroom condo typically has monthly fees ranging from $600 to $1,000, depending on whether utilities are included.
Location
The location of a property has a significant influence on its cost and the kind of lifestyle it offers. When deciding between a house and a condo, there are several factors to consider:
1. Commuting: Condos often occupy prime locations in the GTA, providing residents with convenient access to work and recreational activities, making commuting easier.
2. Affordability and Location: Generally, purchasing a condo is a more accessible entry point into the real estate market compared to buying a house. However, houses can still be affordable for first-time buyers if they consider moving outside the downtown core.
3. Schools: Residential areas where houses are more prevalent typically have a higher concentration of schools. If you have school-aged children, living in a house may make transportation to and from school more convenient.
4. Proximity to amenities: Some Toronto condos offer the convenience of having essential amenities right at your doorstep. From convenience stores, dry cleaners, LCBO (Liquor Control Board of Ontario) outlets to pet daycare centers, these services can be easily accessible. Consider how important convenience is to you and how much you are willing to pay or sacrifice for it.
When making a decision, it's crucial to evaluate how each option aligns with your preferences and priorities, taking into account factors such as commuting needs, affordability, proximity to schools, and convenience of nearby amenities.
Lifestyle - Houses vs Condos
Condominiums often offer a range of amenities, including fully equipped gyms, pools, big-screen theaters, party rooms, and even bowling alleys. While these amenities come at a cost through condo fees, if you make use of them, it can be a worthwhile investment.
On the other hand, owning a house provides a sense of freedom. You'll experience fewer, if any, neighbor-related issues and won't have to engage in small talk in an elevator. There are no rules and policies dictating the color of your curtains or where you can park your bike.
However, it's important to consider that owning a house requires both financial and time investments for maintenance. Tasks such as shoveling your driveway, mowing your lawn, and dealing with unexpected visitors like mice in your basement can take up your time and necessitate specific skills.
When deciding between a condo and a house, weigh the benefits of condo amenities against the freedom and reduced neighbor interactions of owning a house. Additionally, consider the maintenance responsibilities associated with owning a house and how they align with your preferences and available time.
The Alternative
Deciding between purchasing a condo or a house is a significant choice, but there is also a middle ground to consider: townhouses. Townhouses offer a compromise between the two options as they can be legally structured as condominiums, where monthly maintenance fees apply, or as freehold properties, granting you full ownership, similar to a house.
Should you buy a house or condo?
When contemplating the choice between a condo or a house, consider your goals, budget, and envision the lifestyle you desire in your new home. Both condos and houses can serve as excellent investments in Toronto or around the GTA, so weigh your options carefully before making a decision.
At the Olivera Group, we are real estate agents that excel at helping our clients navigate the decision between purchasing a condo or a house. They begin by thoroughly understanding our client's needs, preferences, and long-term goals. We take into account factors such as location, budget, lifestyle, and future plans. With our in-depth knowledge of the real estate market, we provide valuable insights on the pros and cons of both options. By considering our client's financial situation, desired amenities, maintenance responsibilities, and personal preferences, we guide our clients towards making an informed choice that aligns with their unique circumstances. Our expertise and personalized approach empower clients to confidently select either a condo or a house that best suits their needs and ensures a successful investment our personal purchase.
