What to Consider When Buying a Vancouver Condominium
Vancouver condominiums are sprouting up all over the city and are a popular purchase. They are especially popular with young single professionals and busy couples who just don’t want the hassle of yard work and maintenance.
A condominium can be a good investment but one has to carefully consider the prospects of the condominium market as their value can vary somewhat differently from the standard housing market. You can also use your investment in a condo as either capital appreciation, a speculative investment or as rental income and pay for it by subletting it to a tenant.
Buying a condominium is pretty much the same as buying a single family home but there are some significant differences to keep in mind before you take the plunge. One of the key approaches in making your investment pay off is to perform some careful research beforehand as not all condo properties are the same. Some investments can be riskier than others.
Here are some things for you consider before you jump into the condo market.
Make Sure you Understand the Condominium Market
You have to take a close look at the neighbourhood you considering. Some neighbourhood areas may be somewhat glutted with available units. These areas may lose value quicker if the market cools.
Don’t be drawn in so readily by some of the sales pitches being tossed about when it comes to new projects being proposed. Make sure you carefully research the developer beforehand and perform some extensive research to ensure they are an established and financially sound company.
Be Clear on your Reason for Buying a Condominium
Remember that this is a major investment on your part. This could be an investment which requires you to be in for the long haul of at least a minimum of 3 – 5 years. If you are single, then you want to be confident you will be remaining in the city for awhile and that your employment prospects have a solid footing.
Ask yourself why you want to make this investment and what your short and long investment objectives are going to be for your investment. More importantly make sure they are realistic and don’t just consider the best case scenario. You also have to consider how you are going to deal with a worst case scenario.
Research the Local Area
Take a good look at the neighbourhood where you are considering making your condo investment. Ask around and see if the area is in decline or if it’s on the upswing with new or major projects or development on the horizon.
You might be considering a condo for its view of the mountains or ocean for now but a new high rise project could end up taking that selling feature out of the picture down the road.
Don’t Forget About Extra Costs
If you are new to real estate investment then one of the key areas that many newbie’s tend to overlook are the amount of cash you need to have on hand for closing costs. This amount can range anywhere from .5% to as much as 2% of the purchase value of the unit.
Don’t forget to budget for the cost of condo fees which is above and beyond what you pay for mortgage. Condo fee contracts also vary considerably so make sure you know what the terms of the contract entails.
And, if you are putting less than 20% as a down payment, you will also have to consider the extra expense of mortgage insurance.
A condo can be an excellent but should but make sure you take the time and perform a lot of research before you take the leap so tour eyes are wide open as the condo market can be volatile.