A 2022 Guide for Buying a New Apartment or Condo
Updated: Mar 8, 2022
Your home is most likely the largest and most emotional investment that you make. The real estate market today is filled with demands for condominiums and apartments rather than a single house. The ease of maintaining an individual unit with a limited area has attracted many first-time homeowners especially in urban and semi-urban cities/towns.
If you are embarking on a journey of owning an apartment or condo for the first time, you will have a ton of questions. One of the first questions that come to mind will be whether to opt for a condo or an apartment?
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Condominium or Apartment
The basic features are the same for both like sharing common areas, proximity to neighbors, etc. The contrast lies in details, for example, apartments are owned and maintained by cooperation or company whereas condo is owned by landlords and maintained by HOA (Home Owner Association).
Apartments are part of buildings containing multiple rental units, sometimes organized as a community, and the buildings are often managed by a professional company. On the other hand, condos are also part of buildings with multiple units, but each unit is typically owned by a different individual.
Nonetheless, it all depends upon an individual, some people like an apartment, a unit professionally managed by a company because they are expected to be more organized and experienced in dealing with different situations (maintenance fees). Likewise, opting for a condo has its advantages as well. A condo has more variety from low cost to a high-end beautiful building, with outstanding amenities and unique designs. The condo communities continue to go throughout the world. For instance, if you are based in North York, Toronto, there are some attractive and affordable condos like Crosstown Condos that you can consider buying.
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After a quick comparison let’s now look into some guidelines before buying a new condo or apartment. For simplicity, we will divide the segment into various categories.
FINANCE
This is the crucial part, it is important that you sort your finance-related issues first before investing in any real estate. As you are aware the real estate market is highly dynamic and unpredictable nothing is for sure. You can streamline your budget and the cost of maintenance in proportion to your income. However, good news for potential owners is that the variety and increasing number of projects of condos and apartments allow you to choose according to your budget.
Another thing to keep in mind before investing is the property tax and additional taxes involved.
Key points to keep in mind:
Scanning your Market Price
It is a smart move to capitalize on your opportunity when the right offer comes. It is usually advised to scan the market years ahead, analyze the market price’s rise and fall. For example, during the COVID-19 crisis and the subsequent lockdown, the real estate rents have decreased by approximately 20% in most cities.
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Down Payments
Whether you are going for a pre-constructed unit or an already constructed unit, you will be required to make some down payments. The question arises! How large of a down payment will you need for a mortgage on a condominium or apartment? The short answer is 3 percent to 20 percent of your unit’s purchase price, with 10 percent being common for those buyers who must rely on conventional loans to finance their units. However, this is not universal but in most cases, it’s around 10%. The rate of down payment differs according to state or builders.
CONTACT A REALTOR
This is one area that we miss out on, contacting realtors who have experience and their knowledge can only make your life simpler. The additional cost of time and resources in scanning every potential property can all be avoided if you have a reliable realtor by your side. The real estate realtors have their area of expertise in properties like apartments, condos, mid-century houses, and luxury homes. An important tip here is to choose your realtor who has proven records of dealing with condos and apartments. You can even make your decision by contacting previous clients and reviewing their responses.
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Key points to keep in mind:
Realtors know what you ask for
A realtor’s whole job is to put the client's needs first. A realtor can provide you with a possible listing according to your demand giving you more options. Also, a realtor has a good understanding and eye for details. You will be amazed and thankful for the service that is provided by a good realtor. They not only advise about the good things in a property but also point out the limitations like leaks and cracks and possible hazardous settings.
Realtors know the law
Every state has property rules and regulations. Buying into a property means you also fall under the state’s legal property laws. Now what the rules entail are certain restrictions and agreements to the tax terms. This also applies to the micro-level. Every condo and apartment buyer has to agree to certain terms and conditions known as covenants, conditions and restrictions (CC&Rs) under HOA (Home Owners Association). All these bylaws can be difficult for many to understand and comprehend. However, a realtor can guide you with all these legal proceedings, making sure that you and your investment are safely invested.
GEOGRAPHY
Before any down payments, the first focus should be the geography, not the structure but the location. This is the most essential factor as all the other factors are directly or indirectly linked with it. The general rule is to carefully examine the level of development of both current and potential future projects. You can easily access this information with the authorities of the concerned state as all the building projects are archived. Along with that, you will have to examine the soil below as well. Now keeping this in mind we can highlight some pointers to look into while scanning for a good location.
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Accessibility
If you are looking for a condo or an apartment, it is highly likely that you would want to live where you can have easy access to all the possible requirements. Therefore when it comes to accessibility, you should look for a neighborhood that is situated near major transit routes and that has more than one point of entry and exit. Commuting to and fro from work is a big part of many people's day, so a house with easy access to roads and public transportation is the one to go for.
B2B integration facilities
We can all get accustomed to things that are convenient. A great neighborhood should also include local businesses such as grocery stores, shops, and restaurants. Schools are another important amenity factor to look for. Even if you don't have kids, if you want to sell your home in the future, many buyers will be on the lookout for good schools. Large trees, quality landscaping, and nearby parks or community spaces tend to be desirable.
Economic aspect
It is always a smart quality to be prepared for the future. A safe way to protect your investment is by surveying the location for future developments. These have a tremendous economic benefit and deeply influence the resale value. Future projects for new schools, hospitals, public transportation, and other civic infrastructure can dramatically improve property values in the area. Commercial development can also improve property values.
STRUCTURE
While looking for an apartment or a condo, you should look into the structure and qualities you can look into to have an ideal home.
Examine Layout and floor plans
When it comes to buying real estate it is very important that you understand the layout and floor plans. The cost of repairing such plans once you have bought into it is huge. When it comes to condos and apartments you have to carefully examine the floor and room dimensions, measuring the total area. One piece of advice here is not to rush but take your time evaluating all the options.
Some things to take into account:
Placement and size of doors and windows.
The amount of natural light.
Placement of bathrooms and balcony.
Ceiling to floor height.
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Check the building strength
Since the real estate market is saturated with building companies taking on multiple projects as they build complex designs for hundreds of residential units. The buyer should ensure that the construction is of good quality. Many of us are unaware of the mechanics that go into building a structure. Take the help of an expert to determine the design created by the architect. It is important to assess the property thoroughly for the strength to resist an earthquake of a certain magnitude or any other hazard.
Check for safety protocol
Carefully examine the construction documents, check the safety measures taken by the builders such as earthquake resistance, emergency evacuation or fire exit. Check the size and space of the stairway. It should be wide enough for two people to run alongside, in case of an emergency. In case there is an elevator, make sure you check the installation and maintenance routine.
SECURITY AND AMENITIES
Everybody wishes to feel safe and secure in the community that they are a part of. When you are buying a condo or an apartment consider just how safe is the community. If you are opting for an apartment or condo it is beneficial and wise to check the home security system provided, an upgraded good security system installed is a plus point. Driving through an area at different hours of the day could provide you with a picture of the security measures in place. Also, these sorts of visits will inform you how the traffic is, how the after-hours life is and consider noise factors.
Apart from making life in a condo more convenient, amenities add more market value and desirability to resale in the future as well. Urban condos and apartments provide more variety for amenities. Planned infrastructures such as schools, hospitals, public transportation, and other public infrastructure can dramatically improve property values in the area.
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Check Security levels
Since security is paramount for everyone and their loved ones, it is the buyer’s responsibility to check the crime rate and the type of crimes that have occurred with the concerned authorities. You should check the surveillance cameras or security personnel of a condo or apartment to check their routine and records of efficiency.
Check the Neighbours
Another important factor buyers need to account for is the type of neighbors they want. You should schedule a visit or two with your potential neighbors. Having a good neighbor can make your life so simple. The possibility of leaving your home and going on a vacation without any worries, who wouldn’t want that!
Check the amenities
Now, different condos provide different amenities, depending on the type of geography, your amenities requirements can change. A few basic fundamental requirements that you can look for are 24 hours parking space, extra storage space, gym or fitness center, pet-friendly residents, green park in close proximity, eco-friendly and energy-efficient buildings.
Check the terms and conditions
Lastly, the ownership of condos and apartments involves additional fees for maintaining the amenities as stated above. Sometimes the cost of maintenance can be burdensome to new owners. Therefore it is advisable to check with your realtor about it. In the case of a condo, you can always go ahead and check with the HOA about the process of repairing, the person in charge of such grievances, and the timeline to respond to such grievances.
The above guide lists an easy to comprehend guidelines before you embark on your journey to investing in a condo or apartment. The smart approach here is to explore more about the market since the variables governing the real estate price are extremely volatile. However, if the suggestions given are followed diligently and carefully followed, it will result in a good future investment.