Condo or Freehold?
For those considering buying a home, one question is usually should I buy a condo or a freehold? While everyone has their own reasons for ultimately choosing one over the other, here are a few points to consider.
Condo
In Toronto we often tend to think of a condo as being a loft or apartment. While that may be true, a condo is actually a type of ownership where owners own their individual units and share the expense of the common elements such as driveways, garages, pools and fitness rooms. Condos come in all shapes and sizes from townhouses to detached to common element only (country club model). The monthly maintenance fee pays your fair share of upkeep of property and common elements.
For those who lack the time to mow the lawn and shovel snow, a condo can be a great idea and they are generally less expensive to purchase than freehold.
The downside is that the condo rules dictate some things, for example "exterior window coverings must be off-white", and forbid others such as "no pets allowed". Inside one’s own unit, an owner usually has the freedom to make upgrades and design decisions but most condos insist on reviewing and approving significant renovations and that the owner uses licensed contractors to do the work.
Some argue that the monthly condo fee is money lost as opposed to it going straight toward the mortgage (as with a freehold) and ultimately building equity faster.
Another key downside in this shared ownership model is that each owner shares in the financial liabilities of the condo as well. While the reserve fund is intended to cover the cost of major repairs, there could conceivably be some circumstances where an unexpected cost could impact on an owner’s pocketbook in the form of a special assessment.
Freehold
With a freehold home an owner has, as the name suggests, more freedom. Along with that freedom comes the need to maintain the home and look after any major repairs such as replacing the roof.
Freehold homes tend to offer better resale potential than condos and generally have more space.
There was an interesting article in the June 2014 issue of Toronto Life about “condo kids” that is, children born to parents living in condos. arents cited issues including lack of space for kids’ stuff and for kids to play as well as lack of nearby resources for kids, i.e., parks, daycares or schools . If you’re considering starting a family, I’d suggest you read this article before deciding to buy a condo.
Condo
In Toronto we often tend to think of a condo as being a loft or apartment. While that may be true, a condo is actually a type of ownership where owners own their individual units and share the expense of the common elements such as driveways, garages, pools and fitness rooms. Condos come in all shapes and sizes from townhouses to detached to common element only (country club model). The monthly maintenance fee pays your fair share of upkeep of property and common elements.
For those who lack the time to mow the lawn and shovel snow, a condo can be a great idea and they are generally less expensive to purchase than freehold.
The downside is that the condo rules dictate some things, for example "exterior window coverings must be off-white", and forbid others such as "no pets allowed". Inside one’s own unit, an owner usually has the freedom to make upgrades and design decisions but most condos insist on reviewing and approving significant renovations and that the owner uses licensed contractors to do the work.
Some argue that the monthly condo fee is money lost as opposed to it going straight toward the mortgage (as with a freehold) and ultimately building equity faster.
Another key downside in this shared ownership model is that each owner shares in the financial liabilities of the condo as well. While the reserve fund is intended to cover the cost of major repairs, there could conceivably be some circumstances where an unexpected cost could impact on an owner’s pocketbook in the form of a special assessment.
Freehold
With a freehold home an owner has, as the name suggests, more freedom. Along with that freedom comes the need to maintain the home and look after any major repairs such as replacing the roof.
Freehold homes tend to offer better resale potential than condos and generally have more space.
There was an interesting article in the June 2014 issue of Toronto Life about “condo kids” that is, children born to parents living in condos. arents cited issues including lack of space for kids’ stuff and for kids to play as well as lack of nearby resources for kids, i.e., parks, daycares or schools . If you’re considering starting a family, I’d suggest you read this article before deciding to buy a condo.
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