It’s no secret that Toronto’s real estate market is on fire, and as more condominium towers impose themselves over the city skyline, and as houses continue to rise in price, you might find yourself considering the option of condo ownership. There are some important things you should know before taking the leap, however, so Culture Trip has put together a guide to some of the key points you should consider as you prepare to purchase a condo in Toronto.
Location, location, location
Picking a location might seem like an obvious point, but do make sure you take the time to get to know the city’s neighborhoods. Whether you’ve got a short- or long-term plan in mind, you’ll want to know about the area in which you’ll be living, which will have an impact on costs, of course. There are lifestyle implications as well: how close are the grocery stores, markets, and transit options? What schools are in the area? Two handy guides on this front are the Toronto District School Board’s guide and the city of Toronto’s neighborhood rankings.
Do your research
Prior to buying, you’ll want to spend time researching both the condo developer and corporation behind the construction and management of the building. You don’t want to put your blind faith in an inexperienced developer, and you definitely don’t want to end up buying a place in a building that is heavy with debt. You can take a look at the official Canada Mortgage and Housing Corporation’s tip sheet to get some basic pointers.
Get to know the residents
After considering the surrounding neighborhood, you’ll also want to get a sense of your immediate neighbors. Condos often appeal to young buyers making their first venture into the housing market, or to retirees looking to downsize. There’s also a large market for condo rental throughout the city. Beyond your own sense of ease and comfort, the resident demographics can have an influence on potential resale value.
Buyers beware: occupancy fees
By necessity, there is always a span of time between when you take ownership of your new condo and when you officially take occupancy of it. During this period, you unavoidably have to pay occupancy fees, also called “phantom rent” because it doesn’t go toward your mortgage. These fees typically last between four to six months, but you’ll want to make sure you’ve got experienced developers so that you don’t get snagged into a longer wait period.
Beyond occupancy fees, you’ll also find yourself paying a series of monthly fees connected with your condo building and its maintenance and services. You’ll want know in advance how these charges are determined, which services and operating costs are included, and whether certain costs need to be paid in advance. These fees might include the upkeep of on-site fitness facilities, swimming pools, party rooms, security, cleaning, gardens, and concierge services. In the case that you’re purchasing a new condo, how much will these fees increase in the second year? Something else you should inquire about in advance is whether all utilities are included in the condo fees.
Repairs & insurance
There is ongoing concern about the quality and sustainability of the condo towers that are mushrooming across the city, with many of them having floor-to-ceiling windows, meaning that they’re primarily made of glass. Make sure that you learn in advance whether repairs and maintenance of the units are the responsibility of the buyer or the condo corporation. Additionally, what does the corporation’s standard insurance cover? Finding this out will determine whether you will need to get extra insurance.
Don’t lose your view
Many condo towers come in twos or threes—or more. Consider what’s being built nearby, as another oversized residential building could ruin that beautiful lake view from your balcony; this is especially common in the downtown and Mimico condo development areas. You can get a sense of the surrounding neighborhoods by scanning them yourself, but for a clearer picture, you can also look through the Toronto Development Applications website.
If you want further information, you can check out The Condo Bible For Canadians: Everything You Must Know Before and After Buying a Condo by Dan Barnabic, a former realtor, developer, and consumer advocate in Toronto.