House shopping? Choose the type of residence perfect for you
Credit to Author: Margaret Jetelina| Date: Tue, 18 Dec 2018 18:35:09 +0000
Following up on my previous article “What it really means to be a homeowner,” a reader asked me to do an overview of the different types of housing options in Canada.
There are several factors to consider when choosing the type of house to purchase. Some of the popular options are condominiums, townhouses, duplexes or bungalows, and they all have their advantages and disadvantages.
Condominium living in Canada
Condominiums are usually more economical except for those located in the downtown core of major cities. In certain instances, you may also have to pay separately for the parking stall within the complex. These types of dwellings also have a condominium or strata fee, an additional cost to the mortgage payments and property taxes.
This monthly fee is intended for maintenance costs such as cleaning of common areas, snow removal, grass cutting and sometimes utility. The package varies so find out what is included to determine if you are getting the best deal.
A portion of the fees collected will be held in reserve to finance future renovations. The higher the condominium fees, the more funds will be in the reserve, especially if it is an older building. However, older structures need more upkeep. Lower fees especially on a new building could be problematic because there will be less reserve funds. If repairs are needed, you as one of the owners will have to help make up the difference. Any repairs deemed necessary during a special assessment by the condominium corporation will be expensed to owners of each unit. In most cases, this is completely unexpected, but the fee is mandatory. Failure to pay the special assessment fee can lead to foreclosure.
The condominium corporation is governed by bylaws that stipulate various rules and regulations somewhat similar to apartment living. There are restrictions to exterior changes and permission is required for hosting events that may infringe upon the enjoyment of the other residents. Keep in mind that there is common ownership of public spaces.
Townhouses, rowhouses, duplexes
Townhouses or rowhouses are several houses attached to each other but have their own separate entrance and are bigger than condos. Some townhouses can be operated by a corporation and also have strata fees, so it is best to do your research on the rules, fees and expectations for owners.
Duplexes are two joint houses and are often bigger and more expensive. There will be limited ability to make changes but buying the entire duplex could be a reliable source of rental income, as you could live on one side and rent the other.
In any attached house, water leakage in one unit can cause damage to the adjoining property and the owner causing the leak will be financially liable.
Buying a single family home
Bungalows or detached homes, often known as single family homes, are typically more expensive, especially in Metro Vancouver and Toronto. But it gives you the most autonomy without having any condominium or special assessment fees.
With a detached home, you as the owner are responsible for any repairs and maintenance, so it’s up to you to budget and schedule these repairs according to your available budget.
You also have the freedom to make additions or changes especially in mature neighbourhoods (although you still have to comply with zoning regulations).
Owning a bungalow also comes with the responsibility of maintaining the landscape and clearing snow. The city issues a fine for such violations plus the cost of removing the snow.
It is not always an easy decision to choose, but being aware of all the pros and cons can be helpful to make an informed decision.