Real Estate With Matthew Fernandes
This week, we continue our weekly real estate column featuring one of Toronto’s expert realtors, Matthew Fernandes. He will answer questions regarding buying and selling properties, as well as provide his insight into the current real estate market. Matthew has been licensed with Sutton Group Realty for over six years. He has won multiple awards, including the Sutton Platinum Award.
This week, Matthew will help our readers recognize the difference between owning a condominium and a single-family house. The main distinction between the two is the type of ownership.
As an owner of a house, you own the land with the property and you are responsible for all the maintenance that comes with both the property and the land.
With a condo, you own the unit that you live in and essentially own shares to the building and the common elements, such as the pool, foyer, common grounds, and parking. In owning a condo unit, you own a piece of a corporation. The condo has a board of directors making decisions on rules, regulations, upgrades, and the overall management of the condo itself.
Matthew will outline below both the Pros and Cons for each type of home ownership.
Pros in owning a Condo
Owners of condos usually feel a lot more secure living in their property. Condos offer concierge service or security at the door. No one can enter your unit without your permission. If you plan to travel you can simply lock the door and feel secure your possessions are safe.
Most condos offer amenities, such as indoor swimming pools and a gym. Residents are able to access these services without having to step outside their building. To entice buyers, condos are getting extra creative by including services such as bowling alleys and pet daycares.
No exterior maintenance is required from condo owners. You do not have to shovel the snow after a storm or mow the ever-growing lawn. Condos are usually in central locations, close to transit and shops.
Condos, in most cases, are much more affordable than single-family homes. According to a recent article in the Globe and Mail, the gap between the price of a new house and a new condo in Toronto rose steeply to nearly $300,000 in February 2015.
Cons of Condo Ownership
The biggest negative perception of condo ownership is the dreaded maintenance fees. One of the biggest reasons they are looked at in a negative light, in Matthew’s opinion, is that there is no regulation or guidelines on the increase of maintenance fees. They also usually increase every year. As a building gets older, it requires more maintenance and repair. Therefore, it tends to need a bigger reserve fund in case repairs are needed or emergencies occur.
Your condo board determines the rules and regulations for your condo unit. They may restrict the size or number of pets, what you place or use on your balcony, and even specify the colour of your shades or blinds
In very few cases, there have been special assessments given to each condo owner, who is required to pay additional fees because of unexpected repairs to the building or there not being enough in the reserve fund to cover costs of each repair.
In addition, in most cases, condos do not appreciate as much as single-family homes.
Finally, condos are usually smaller and have more confined space.
Pros of owning a House
In owning a house, you own the land, which in the end will always hold its value better than a condo. There is a bigger demand for houses. You also have the ability to rent out a portion of your home to make extra income, for example the basement.
With a house, you have your own exclusive outdoor space. You can make changes and modify your house completely. You have the potential to create something completely different. Additionally, the house owner can make renovations/additions to improve the value, with proper permits and approval from the municipality.
Matthew adds, “For me as a realtor, one positive aspect of owning a house is the potential to live in the space, while at the same time possibly having rental potential, whether it be in the basement or second floor. Tenants can help you pay off your mortgage.”
Cons of House Ownership
A big factor hindering many people from owning a house is affordability. Houses are more expensive to purchase and maintain. Matthew reminds our readers that while houses do not have monthly maintenance fees, their upkeep can be very costly. When certain repairs are needed, such as the roof or windows, the expense can be in the thousands of dollars.
Matthew concludes, “Whether you’re considering purchasing a house or a condo, I advise all buyers to make sure they have money set aside for rainy days.” Owning either type of property depends on each buyer’s needs and preferences. One is not better than the other. Your financial situation and lifestyle are significant factors when considering your purchase.
Consider the pros and cons to each kind of property. Make sure you weigh out all of them to be comfortable with your overall decision. Ask your real estate agent to outline the different possibilities with each type of ownership, to help you come to the best decision for you.
If you or someone you know is thinking of buying or selling a property, Matthew Fernandes is more than happy to meet and sit down to discuss yours and their needs.
If you have any questions or suggestions for next week’s column, please contact Matthew via email – matthew_fernandes@rogers.com or his direct line - 416 937 4510.
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