Thursday, 27 October 2011
80 CONDOS VS. MODERN CONDOS
At least once a week I hear: "Who can live in a 500 square foot condo?" To which I say: "Someone who doesn't want to live in a 270 square foot condo." People love space. Even in in-demand Toronto neighbourhoods where it's at a premium. I often find these space loving buyers are drawn to the 80s condos. They built them big back in the day. Much bigger than today. Sure, they need some kitchen updates and may be a new floor, but wow, you have space to move!
Then there are those who won't even consider such a dinosaur. The people who love new condos. It's true that the design is nicer and certainly more up-to-date. The newer condos don't have the look of a Communist-style lego building of some of the older condos. There's better kitchen counters, stainless steel appliances, and cooler looking lobbies. But it seems that the newer the condo gets, the smaller they become.
Then there's that additional cost. With any one looking at condos, 80s or modern, the first question out of their mouth ( next to questions about parking) has to be: What are the maintenance fees? People are obsessed with this extra cost. And for good reason. High maintenance fees are almost a big enough stigma as a house that was a grow-op. Both push down the price of a given property.
I can say wholeheartedly that people do not like high maintenance fees, even if the condo is priced low. They often think some thing is wrong with the condo. And some times there is, but other times, especially with 80s condos, there are a lot of amenities like a gym, a concierge, or say, tennis courts. I would say the balk of the buyers with whom I have come into contact want low maintenance fees and would certainly cut out the extras.
Back in the 80s, when condos were really starting to take off in Toronto, developers wanted to project an image that living in a condo was a like a day at the spa where you didn't have a care in the world. You barely had to leave your luxurious building for any thing. We'll take care of you. So, condos bulked up on the extras - squash courts and indoor heated pools. And so, many of the 80s and 90s condos had some pretty hefty maintenance fees right from the start.
Newer condos, for the most part, tend to have fewer perks because they want to keep the maintenance fees down. Does this always work? Not always. If a condo is not able to build a decent reserve fund for a rainy day, then they have to raise maintenance fees. I heard of a condo recently whose reserve fund had been largely tapped out because the elevators had to be replaced only a couple years after construction. So fees went up. The developers, as far as I know, didn't pay a dime.
Still, 80s condos could have higher maintenance fees for another reason. Old things need to be replaced or updated after a few decades - a new roof, an updated heating system, new fire codes regulations. This will also cause fees to go up.
I'm not trying to steer any one into choosing an 80s condo or a modern one, but it's a good idea to understand the pros and cons of both. There are great 80s condos and terrible ones. And there are lousy modern condos and excellent ones. Still, it's good to know the perks and down sides to each one.
So let's recap:
GOOD THINGS: often bigger size, often less expensive per square foot, a reserve fund that has been established.
BAD THINGS: Could have higher maintenance fees and older building systems and parts may need to be replaced.
GOOD THINGS: Better finishes, more stylish, and less out of date, likely won't need to replace any thing just yet. Less amenities can mean lower maintenance fees. Fewer renos required - just move in!
BAD THINGS: Often smaller in size. With brand new buildings, there's usually a small reserve fund to start. So maintenance fees can go up suddenly once the condo board has an idea of the cost to run the condo.