The Ottawa real estate is currently not doing as well as the market in Toronto and Vancouver. Condos are not moving in Ottawa due to an oversupply as new units have increased in the last few years. Homeowners and investors are not getting their asking price at the point of selling a condo. In fact, some homeowners are selling at a loss.
However, there are situations in which condos make a good investment choice. Having worked with buyers and sellers on a daily basis, A good real estate agent knows what is selling and what is not. Here are tips that will let you know how to make a condo sale.
The Issue of Fees
Condos are not necessarily high-rise units; they can be stacked homes and townhouses. It is important to be exactly clear on what condos are.
Condos have some levels of shared expenses. Full coverage condo groups will usually have higher fees since they cover replacement costs such as windows, roof, and additional amenities. The limited condos have lower monthly fees but will only address management, snow removal, and ground maintenance.
The condos may have the unpredictability of the monthly fees. Often, there are unforeseen expenses that may go up over time. The fees will vary from a minimum of $100/month, $250 to $300 for townhouses, and $500 to $1000 for the high-rise buildings. The monthly fees will even be higher for elite locations where amenities, full security, and premium finishes.
The argument put forward is that the money spent on fees is comparable to the amount spent by freehold homeowners on maintenance and future repairs. The calculations should be done carefully since the condo fees may add up to huge amounts that far outweigh what you would spend on fixing things on your own.
A real estate agent will also seek the services of a lawyer to ascertain the status of the condo. Where the budget of the reserve fund is limited, condos can apply for Special Assessments to bump up the maintenance of major items or the operating costs. These can run from hundreds to thousands of dollars.
Who Are Buying Condos?
First Time Home Buyers
For first time home buyers, the condo townhouses are affordable compared to freehold homes. These new homeowners should carry out upkeep and other cosmetic improvements that will be important for a future sale. That will suit the present day buyer who is choosy and opts for units with better finishing even when they cost more.
Other factors looked at include:
- The condo is not too far from downtown.
- The condo is near mass transit.
- The condo has a good reserve fund. That’s a pool of accumulated funds from monthly fees, set aside for larger future expenses. Expect a jump in condo fees for older condos that run into major replacement costs if the reserve fund is not healthy.
Millenials buying their first home will have made the right choice and should keep in mind that the condo must remain in shape in a buyer’s market. The condo townhouse is a good investment when starting a real estate portfolio in future.
Boomers and Seniors
Baby boomers happen to be above 55 years of age and are still buying condos. Seniors and snowbirds are also active in the condo market. With the right price, healthy baby boomers are moving into adult lifestyle condos after the kids have left the nest.
Ottawa Condos that have senior-friendly design are a good option for seniors who desire to age in place without being taken into retirement homes. Communities oriented towards seniors offer a good balance between socializing and independence. The communities have features such as weekly social events, grocery stores, and hair salons.
The snowbirds also like the condos since they can lock the house and proceed for a holiday without worrying about maintenance.
Parents of University Students
The parents who live outside Ottawa may opt to buy a small home for their child in university and sell it after their graduation. They will want to avoid residency fees at the local university or the rental costs. The idea behind the concept is not to pay down somebody’s mortgage but to pay your mortgage and sell it after graduation.
The concept works if the condo is:
- A resale, not a new build.
- Near transit access or in a conducive location.
Women who are over 30 years of age are an important demographic in the home’s market. These women are seeking to be part of real estate ownership especially for the stack units in the suburbs.
Divorce also leaves the couple separately looking for a smaller and affordable living option.
The Super Wealthy
The ultra rich have specific taste and specific preferences. They will go for the high rise condos that spare no coin on design and that have condo fees of more than $2,000 per month.
These are people who worry about the company that they keep and seeking to become part of a community with similar interests and an opportunity to network. The luxury condos are a good answer to security and cultural concerns.
Groups of People who Condos Don’t Work For
People Who Buy High Rise Condos and Expect to Flip
Investors are enticed by sales people and builders who push the famous three-year flip. It is possible to flip the condo but what happens when all other owners in the building are doing the same.
New builds should worry you due to the following:
- The perceived value of a new build condo can be much higher from the builder’s perspective than the CMHC’s locking you out of adequate financing.
- Condo fees often jump dramatically about 2 – 3 years after a new build due to increase in condo fees or applying a special assessment to owners.
- People Who Don’t Understand the Rental Market
The Ottawa real estate is very competitive. An accumulation of inventory has been noted owing to builders focusing on tenancy focused buildings. The effect is that condos go unoccupied for months, or end up renting out for less than the mortgage and carrying costs.
The Big Q: Has The Market Hit The Bottom?
The future is hard to predict but is not grim. Pricing may have hit bottom but will soon start improving since new builds have slowed and the inventory is progressively being occupied.
Resale condos are performing well in the market as long as the price is right. However, homeowners are not making huge profits from the sale of a home. The overall strategy is to buy a condo and to hold.
Consider these local Ottawa Home Builders to get a new Condo that you desire:
Ottawa, ON K1G 4K1
Phone: (613) 739-7111