Thinking of Buying a Condominium?
There are a lot of things to consider, especially if this is the first time you are thinking of buying a condominium unit or condo.
We all heard this line, “location, location, location” in real estate business. This is just one of the many important factors in buying a condo. Do you think a condo is more suited for you or a house?
Condos are actually the best choice for a lot people. There are people who just want a place near his work, easily accessible, which is also near the supermarket or a mini-mall. This kind of preference is not applicable for houses. Houses are usually in residential areas, far from your workplace or recreation areas.
However, whether buying a house or a condo, that is still part of the real estate game:
Real estate has never been a fool's game' and now is the time to switch strategies and become diligent for a greater chance of success.
It is also unwise to sit on the sidelines in cash. Downward market shifts are healthy for a number of reasons because it amplifies the good, the bad, and weeds out the average.
Tactical investing is the act of leveraging a strategy behind every decision. All too often, real estate investors make decisions based on past performance or success – the same type of mistakes are found in capital markets. As an investor, it is important to treat every decision independently, and perform the proper due diligence with the right set of tools.
For further reading, go here: https://www.theglobeandmail.com/globe-investor/personal-finance/mortgages/five-traps-to-avoid-when-buying-a-condo/article4630744/?page=all
Having the right set of tools is necessary in all kinds of investments. We have read a lot of tips from the internet but only a few writers tackle the risks or traps in buying a condo. To some, buying a condo might be easy, but it is always best to consider… 7 Traps to Avoid when Buying a Condo.
Trap Number 1: Rules and Regulations
You might not like the internal rules within the condo building. So it's better to ask about it now, than regret buying a condominium later.
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Association rules. Rules vary from one condominium to another, but they are designed to keep the appearance of the buildings professional and uniform. This supposedly keeps property values higher. Don't expect to be able to paint the outside of your unit in a way that reflects your personality. Your landscaping options are limited. In many cases, you won't even be allowed to erect a small flag on your door frame or window. Some associations don't allow pets.
So better not think of planning great landscapes outside your condo or setting up a garden just outside your door. Verify first if the ones you want to set up are within the boundaries of the condo association rules.
Trap Number 2: Loan Issues
Buying a condominium may be more difficult than purchasing a typical home. Lenders are very careful when giving out loans. They usually require that a certain percentage of the units have people living in them, or are, as they call it “owner occupied.” Another restriction may be how many condos are allowed to be owned by one investor. Usually, lenders do not want one person to own more than 10% of units in a building. Many times, lenders will also have restrictions on how many of the units have already been sold. Some lenders require at least 90% of the units sold in order to offer financing.
Lenders may also have tougher loan-to-value ratios and restrictions for those buying condos. A loan to value (LTV) is how much the condo is worth vs. how much is owed on it. For example, if you put 20% down on a home, your LTV would be 80%.
Read more: https://www.investopedia.com/articles/mortgages-real-estate/09/issues-purchasing-condo.asp#ixzz3p0uk5oOf
Photo credit: https://www.arabellarealestate.com/wp-content/uploads/2015/08/MWATF-Art-Bank-Loan-Infographic-V5.1.png
This trap of not being able to get a condo loan might be a little complicated for us. So it would be best if you can consult a condo expert like one of our trusted real estate agents, Bo Kauffmann. To know more about Bo and to contact him, go to this page:
Trap Number 3: Buying a condominium without motive / not having a plan.
Are you a passive investor? Will you manage the property yourself? Do you know about capital gains taxes? Is residential real estate the best approach? Before investing in real estate assets, it is important to hash out a very specific plan; otherwise, you run the risk of losing your capital or worse.
Now, to counteract that, have a plan! Here's an infographic that can help you plan or help you buy a condo in Winnipeg:
It is always wise to plan ahead. It might be tedious for people making a big investment like buying a condo but it can be easier with the help of a real estate agent.
Trap Number 4. Compromising on the important things
Now that you are thinking about it, make sure that the condo unit that you are about to buy is really suited for you. Again, no matter how you like something, if it is not suitable for you then, look elsewhere. Look for something that you really deserve.
Do not compromise convenience and safety. This is especially true if you are bringing your family to live in the condo. Will you be buying a condominium that only has 2 bedrooms when you know that you will be needing more? What about your children's play room? Will you choose a condo that is not safe for your kids? Of course not! So, do not buy a condo that doesn't suit your lifestyle.
One of the things that lead you to compromise is your emotion. We tend to be emotional buyers; what we like is what we like. Don't miss the important things especially when it comes to finding the right shelter for you and your family. This is one secret of living the life that you always wanted.
To know more, go to their site: https://arcasouth.ph/blog/5-mistakes-condo-buyer-must-stop-doing/
And speaking of not compromising safety, here's a short excerpt about that:
Preventative Measures for Condo Safety
Living in a condo is different than living in a detached house, and although some safety tips are the same there are some differences that should be addressed to keep yourself, and the entire building, safe. In this post I'll go over 10 simple safety tips pertaining specifically to condo living.
1) One action you can take towards safe condo living is to be aware of your surroundings. Acquainting yourself with your neighbors will give you a better idea of their regular arrival and departure times so you will be better prepared to spot irregularities in the building and respond in kind.
2) Know the location of all fire exits and stairwells in your building; this includes indoor parking and storage areas. If your buildings garage is equipped with panic buttons knowing the locations of those buttons can help you respond quickly in an emergency.
3) Part of being aware is keeping an eye on access control. Most condo owner's mistake access control for security, but they are not the same. Access control is selectively restricting entry to the building; security, however, would work with access control to alert personnel of a perimeter breach, or if a door remained open longer than the allotted time. While access control working with security is more desirable there are still preventative measures that tenants can implement to increase building safety.
4) Unwanted visitors can gain entry to the building through the parking garage. When entering, or exiting, the garage, stop and make sure that the garage door is completely closed before driving away, or parking, to thwart unwanted visitors from slipping into the building. If you notice an exterior door being propped open notify the building manager about a potential breach. While it may seem nice and neighborly to hold the door for someone unless you know them you could be putting the rest of the building at risk.
Those are actually part of 10 measures. To read the other 6: https://www.mircomgroup.com/incaseoffire/item/404-10-simple-preventative-measures-for-condo-safety
Cool tips right? Our family's safety is paramount. We cannot be too safe.
Trap Number 5. Over Upgrading
Over upgrading is a very common mistake made by amateurs, and one that can be costly. Developers have tried to spearhead this problem by providing palettes, but owners still make this mistake. Over upgrading to your tastes may not be reflected in the market value of the property and likely, do not appeal to the masses. By default, this decreases your buyer pool and demand for the product.
Also from: https://www.theglobeandmail.com/globe-investor/personal-finance/mortgages/five-traps-to-avoid-when-buying-a-condo/article4630744/?page=all
Anything that is an excess is usually not good. Though most of us can be considered amateurs when it comes to real estate, but it is best not to fall in the trap of of over upgrading our preference in buying a condo. We should always put practicality in one of our considerations.
Trap Number 6: Not hiring a real estate agent
Of course it's understandable that there are people who wouldn't want an intermediary. There are some types of people who would rather do things by themselves and not want help. This is akin to sick persons not consulting a doctor and would just self medicate. https://twitter.com/MikeSuppa/status/642372881696059392
Searching the web which condo is the right one for you is not a guarantee that you will end up with a good and satisfying outcome. I say it can be your worst nightmare because of the processes involved. One way to make this a worthwhile experience for you is to hire a professional real estate agent when buying a condominium.
A real estate agent will help you in the entire process from choosing the right condo to the signing of the contract. The agent will guide you on the things that you need to do as a buyer. He or she will also let you understand the pros and cons if you choose that particular condo. When it comes to payments, fees and charges, they will give you an idea on what you are paying for exactly. Real estate agents will also act as a mediator since some issues may occur.
Ultimately, choose a credible real estate agent for you not to regret your decision to hire one later on.These are the mistakes that you must avoid doing when looking for and investing on the condo of your choice. In sum, you have to be realistic about the process which is not a very easy undertaking. Again, don't rush into making decisions especially if you are not sure of the outcome of that particular decision. Learn the process if you must. Knowledge might be your only weapon to turn this nightmare into a sweet dream.
For the complete article: https://arcasouth.ph/blog/5-mistakes-condo-buyer-must-stop-doing/
And last but not the least trap that we should avoid…
Trap Number 7: Pending Litigation
In this YouTube video from a real estate agent from the United States, she provided 4 warnings or traps in buying a condo unit. However, one particular flag that struck our interest: Pending litigation
This pending litigation red flag is applicable not only to the USA but also in Canada, even in buying a condominium in Winnipeg. Though as she mentioned it's self explanatory, to be safe, to be sure that the condo you are buying in Winnipeg has no ongoing cases held in court, better talk to a real estate agent. Better contact Bo, who is now in the top 5% of realtors in Winnipeg :