A semi-detached house, a three-bedroom condo, a one-room condo – these are typically the places that homeowner prospects want to buy. Have you thought about purchasing an apartment condo in the heart of Toronto? If not, then you probably should consider because this can be a reasonable alternative to people who may be having a hard time purchasing a conventional property, particularly in some of the hot real estate markets. Are you interested?
If so, be sure you equip yourself with the knowledge beforehand. Remember, buying an apartment is not as simple as submitting an application to rent a one-bedroom unit. Here are seven things you need to know on how to buy an apartment condo:
Step #1: Compare Rent vs. Buy
Should you buy or should you rent? That is the question. Generally, we think buying property is the way to go – it is the American Dream after all. But in today’s sky-high real estate market, is buying a home worth it? The answer depends on your lifestyle and where you live.
Indeed, acquiring property entails all sorts of costs that account for a considerable portion of the principal. Origination fees, closing costs, interest, and all sorts of fees are par for the course when you are in the middle of buying a home. You can expect to fork over thousands more, which could be the rent you pay over a period of several years.
You need to determine if buying is worth it for you and your family.
Step #2: Learn Difference Between Co-Ops and Condos
When potential homebuyers think about purchasing a unit in a building, they tend to not think about apartments, only condominiums. This is understandable because the standard idea is that apartments are only for renting, unless they are converted into luxury suites.
So, what is the difference anyway? First, a co-op allows you to purchase a share in a building, but there are various requirements and qualifications. Second, a condo is essentially a deed like a house. Put simply, a co-op has many restrictions and a condo does not have much.
Step #3: Speak with a Real Estate Agent
It is true that purchasing an apartment is not that common, and many buildings do not offer this. In order to help you with your search on how to buy an apartment, it would be a good idea to hire a real estate agent.
Since realtors have access to contacts, the latest listings, and all of the other information pertinent to your buying needs, it would be wise to get in touch with a real estate agent who might be specialize in condominiums, co-ops, and apartment buildings.
Step #4: How Long Do You Plan to Stay?
Earlier, we recommended to weigh the pros and cons of renting versus buying. Here is one way to determine if buying an apartment is worth it: Figure out how long you plan to stay in your unit or even in the neighbourhood.
Indeed, if you have decided that this is the place you want to spend for the next 20 or 30 years, then buy an apartment. However, if you are thinking that you could leave in the five years, then perhaps renting is what you should be doing.
Step #5: Mortgage Lenders Have Different Standards
You may not have been aware of this, but mortgage lenders have different standards and requirements for condo and apartment loans. Financial institutions are not keen on approving loans for apartments or co-ops because they cannot repossess the unit if you have a difficult time making payments.
At the same time, mortgage lenders also do their due diligence for condominiums because they may want to determine the financial state of condo associations.
Step #6: Apartment Building Costs
In addition to inquiring about rules and regulations (roommates, subletting, pet ownership, and satellite dishes), you should also check out the costs, whether it is service fees or home owner association (HOA) fees.
These are not universal expenditures, so it will vary from location to location. These are good to know because then you can properly budget your homebuying plans.
Step #7: Find Out How Long the Owners Have the Lease Locked In
After you have been pre-approved for a mortgage and you start navigating the housing market, one of the key questions you need to ask either a condo association or a co-op is how long they have the lease locked in for. Some leases held by the condos and co-ops can last up to 999 years, but it is always better for you to know the specific numbers.
Have you ever thought about buying an apartment? Many people tend to live the apartment life, but they only do it as renters and tenants rather than owners. There is something reassuring and cozy about living in an apartment complex. But wouldn’t it be great if you owned a unit instead of rented? It would. The building you are presently living in may not be selling, but there are other complexes that are.