Peggy Blair
I would like to welcome Peggy Blair as a valuable Guest Blogger this week. She hosts the Real Estate section Roger’s 22 Cable show, Ottawa Experts and is also an accomplished author. Her book The Beggar’s Opera has garnered rave reviews and I cannot wait to hear about her upcoming books as she is a great story teller. However today she will not be story telling but talking to us about downsizing. Peggy has been presenting many seminars about this very topic across Ottawa, so I thought I would bring on the expert. To learn more about Peggy, visit her website at peggyblair.ca, subscribe to her witty blog Kiss and Sell and add her on twitter @peggy_blair. Thank you Peggy!
A lot of boomers are getting ready to downsize from larger homes to condos, but they’re nervous. They don’t have the nest egg they expected because of the downturn in the stock market. They know the housing market is soft at the moment so they’re worried they may not get as much for their existing house as they’d hoped should they sell. If they move into a condo, they fret that condo fees will go up or that they’ll get hit with special assessments.
Should they be worried?
Well, there’s nothing we can do about a softening real estate market, except to point out that as long as you’re buying and selling at the same time, you should come out fine. You may not get as much as you thought you would for your house, but you’ll pay less for the new condo so it all evens out. And yes, condo fees generally do go up from year to year, but so your expenses in your house as well.
Remember, condo options are not limited to downtown condo towers with lots of amenities. The fewer amenities, generally, the lower the fees. And not all condos require that you give up all those treasures you’ve collected over the years. There are condos that are very spacious (I have one on the market now that’s just under 2,000 square feet.)
Some very affordable detached, semi-detached and row unit condo bungalows can be found, particularly in places like Orleans. (CMHC predicts that prices there and in Barrhaven will go down even further.) Some of these units are brand-spanking new!
And unlike a house, the condo corporation often takes care of all kinds of maintenance issues that you would have to budget for if you were in a house. In some cases, the condo corporations will handle structural repairs to windows, foundations or roofs, or a combination of these, despite relatively low fees. In others, you’re responsible for the exterior elements of the condo as well as the interior, but the corporation handles snow removal and grounds maintenance.
The tax status certificate (obtained from the condo corporation for around $100-125) explains what the condo corporation sees as necessary repairs in the future and whether fees are likely to increase, which can help reduce surprises. Obviously, resale condos built in the 70s or 80s are probably going to need major repairs. Even ones built in the 90s will be hitting that point soon where things like roofs and windows are up for replacement.
But if you’re living in a house now, you’ve likely have had to deal with such things already. Part of any home ownership is wear and tear and eventually, replacement of some structural elements. Unless you’re a tenant, you’ll have to deal with those anyway. The only difference with a condo over a house is if it’s one where the corporation is responsible for the major structural elements, you can’t control the timing and you may well get hit with a special assessment as well as some inconvenience.
In the condos where those structural repairs are entirely your responsibility, you deal with those issues just as any home-owner has to. (Those are usually the ones with the very lowest condo fees since the condo corporation only handles common areas.)
Most of my clients see condo fees and freak out at how high they are, but they forget to look at what’s included.
I always sit them down with a worksheet and ask them to calculate how much they pay (or set aside) annually for major external repairs (eg. roof, foundation, windows, fence), how much they pay for insurance, and how much they pay for snow removal and lawn maintenance. When I did that little exercise, I discovered that my monthly costs of house ownership were much higher over what I’d pay in condo fees, so it’s well worth the effort to go back through your records and crunch a few numbers.
But most of my boomer clients who have downsized have discovered that what they really end up paying for in condo-living is peace of mind. When they travel, they can lock the door and not worry about security issues or mail. And in some of the condos that are oriented to adults, they’ve discovered all kinds of new friends thanks to bridge clubs, reading groups, Aquafit classes and so on — and those are priceless.
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