News   Mar 27, 2024
 1.2K     1 
News   Mar 27, 2024
 1.1K     2 
News   Mar 27, 2024
 638     0 

Should i buy an old condo?

Somayeh

New Member
Member Bio
Joined
Mar 22, 2011
Messages
14
Reaction score
0
I am looking for a 1 or 2 bedroom condo in downtown with a good lake view. Turns out the real good views can only be found in the older ones (e.g. 33, 55, 65, 77, and 99 harbour square). I have no problem buying into them (as I've been renting in one of of these buildings and they are managed well), but fear that the value of the investment would depreciate significantly as they age even more (right now, they are between 20 and 30 years old). In terms of maintenance fees, they look to be in line with newer buildings. Should I go with a newer condo, in the same neighbourhood but most likely not with the same type of lake views? What would happen to old condos (like these ones) in 30 years time when my mortgage is hopefully paid? Would they demolish them? turn them to rentals? Haven't been around to know what to expect. Any advice is appreciated.
 
I think that you do get more square footage for the older condos, but becuase they are not shiny and new, they might not be as desirable. I know these buldiings are well maintained which is just as important to resale. Your realtor should request a status certificate to ensure that there is adequate money in the reserve fund. The reserve fund is to pay for any structural damage, and to repair the common elements ie, lobby gym, roof etc....

What is good for investment in regards to this part of the city, is that there is some development happening in the area, which should increase property values. Another question to ask yourself is how long do you plan to stay at there. If you don't plan to stay longer than 2 years, and you make no improvements to the property, then it is based upon the market which i think at best will be stagnant for the next couple of years.

Or if you plan to purchase a unit that is not rennovated (which I reccomend) and plan to stay there for 7 years, I am certain the values will increase.

A condominium cannot be changed to an appartement building because of it 's declaration and description, and I cannot see the city tearing them down.

I could send you what has been sold in those buildings to get an idea what you could afford. Private me and i could give you some more info.

Good luck!!
 
Condos are hot in central areas at the moment but there is a building boom going on with a glut sure to follow. There are many pitfalls that go along with buying a condo:

1. High monthly maintenance fees.

2. If an earthquake knocks it down you are screwed.

3. If you have weird neighbors you are screwed.

Very few individual Japanese buy real estate as an investment; you would be entering un-chartered territory.
 
Older condos are generally larger and cost FAR less per square foot. Maintenance fees are often higher but I bet that when the newer condo buildings have their second Reserve Fund Study (they are required every three years) the amount they will need to put into their reserve funds will get MUCH higher (and that's usually why fees in older buildings are higher). I think that the old addage "Location, Location, Location" may be right!
 
I would suggest buying for square footage in older buildings is the better option.
A brand new condo is old in 10 years, the older condo will just be older still.
Older buildings often have more limited amenities but maintenance fees could be lower on a per square foot basis as a result. (although they may be higher as a result of the greater square footage)
Personally, I like a smaller boutique building with larger suites and a smaller ownership group. There tend to be fewer renters and more conscientious owners.
 
Thanks drewp. Very informative. I don't care about them being shiny, and I don't mind buying an unrennovated one and rennovate it gradually during the years to come. In terms of time frame, we plan to stay in this area for another 5 years. So I am guessing investment wise it's not a terrible decision ...

We are not yet into taking any action at this point, just gathering information. But will contact you if we need help. Thanks! Any other insight would be appreciated.
 
Felix07Richerd, I see your point about maintenance fees and weird neighbours, but not sure about the earthquake one. How is a condo different from a house if an earthquake knocks it down? Every owner still owns a piece of the land, right?
 
Thanks DSC. I think you bring up a valid point about the newer condos maintenance fees going up after the second reserve fund study.
 
Like your point Jaycola about comparing maintenance fees per square feet, and then the older buildings might not look as expensive. Thanks!
 
I personally think boutique buildings have drawbacks. There maintenance fees are usually higher per sq/ft because less owners will be able to pay for the reserve fund. Maintenance fees fluctuate from building to building. Just because maintenance fees are low for a certain building does not mean you are getting the best deal (unless it is brand new), it could be that it is not being managed properly.

Usually what drives up maintenance fees is having a swimming pool. If a pool is not a priority then look for condos without one, as you will notice that your fees will be lower because of it. But there are so many factors that come into play with maintanence fees.
 
Could you please provide a few examples of such buildings so I could go have a look at them on my next visit? Thank you!

Downtown here are a few examples that I'm familiar with. The buildings are 10-25 years old, have good sized units (to huge sized units), high owner occupied but some don't come up for sale all that often so you have to keep an eye on MLS.

Paxton Place - 71 Charles St. at Church - large to huge apartments, some with fireplaces and solariums
Lexington - 45 Carlton St. between Yonge & Church - most units are 2 bed/2 bath plus 1 or 2 solariums, 1200 or 1300 sq. ft. Great units, dynamite location and great city/lake views on the south side of the building. No dogs allowed.
Alexus - Alexander & Church Street - 1 beds to 2 storey PH suites. Small boutique building, well managed, most plans are really good.
256 Jarvis Street - All 2 bed/2 bath + solarium/den, four suites per floor, 1750 feet each, MASSIVE living room/dining rooms, a semi-sketchy but upcoming area and close to everything. If you can get a west facing suite the city views are gold.
One Park Lane - St. Patrick & Dundas Sts. Large apartments 1, 2 & 2 + sol. suites, well managed, some have amazing city views, great location.

That's all I can think of off the top of my head for older buildings with large apartments.
 
Thank you DT. Size really isn't the issue but low fees are. I can see why pools, gyms and large or otherwise unneeded common spaces can hike the fees and once the fees start to increase the value of the equity will plummet.
 
I sold a great 1 bed in 65 Harbour Square with Lake Views. Where else can you get a 1,050sq.ft 1 bedroom??? Yes, the kitchen needed remodeling but a trip to Ikea can solve that.

One thing to keep in mind is that the baby boomers are starting to downsize and they won't want a 500sq.ft suite. I believe there will be a market developing for large suites in older buildings that have been renovTed to modern standards.
 
Felix07Richerd, I see your point about maintenance fees and weird neighbours, but not sure about the earthquake one. How is a condo different from a house if an earthquake knocks it down? Every owner still owns a piece of the land, right?
Heh, in my case I have earthquake insurance for my house. :) The rep on the phone said he had never sold that to anyone else in Toronto. :p

In my limited experience, you pay far more for the finishes in new construction than you do if you renovate after the fact. This is exemplified in the cost of upgrades for new construction. Such upgrades provide good looking but mediocre quality materials, for the cost of what you pay (including installation) for much higher end stuff from a 3rd party.

However, if you're only going to be there 5 years, you might just want to buy a decent place and then not upgrade it too much aside from paint etc, cuz you're just gonna sell it anyway. It is unlikely that expensive upgrades will pay for themselves in terms of price premiums when you sell.

As for 99 Harbour Square and its sisters, it's got really nice views, but the condo fees are too high for my liking, because they have all sorts of stuff I would never use.
 

Back
Top