Wednesday, March 21, 2018

Buyers Were Asking: Condominium versus Freehold Ownership

Condominium versus Freehold Ownership

Condominium ownership versus Freehold ownership preference suitability is more about the individual buyer.  Typically, we recommend one over the other depending on our buyers.  It isn't really a 'one size fits all' theory.  
If you take two similar homes built at the same time, one condo, one Freehold, generally, the Freehold will sell for a higher price in the year of build.  Why?  Because, all things being equal, the fee will be the deterrent for the buyer, making the Freehold more desirable.  Higher demand, higher price. Both homes are new, so why pay a fee?  Fast forward 12-15 years, the Freehold starts to devalue to the value of the condo.  Why?  Because, typically, new Freeholds tend to be bought by first time buyers who cannot afford the general mechanical upkeep, so, roofing, windows, doors and paving get neglected, while the condominium fees will generally cover these mechanicals.  
Now, the difference?  After year 15-18, the two become almost interchangeable and rely heavily on buyer preference.  In Burlington, our downsize market has the choice.  That being.....do I want to choose when I upgrade/upkeep or do I want someone else to decide?  It is a very personal choice.  One, in which, I believe is strongly determined by the personality and preference of the buyer. Many want to maintain control over whom they hire, they want to still remain land owners (with condominium ownership, you have no ownership of the land, you own inside your home, not outside).  Condominium ownership, I believe is how first time buyers should start as they are then not left to their own devices and the initial investment is always protected as the doors, windows, roofing and exterior are all kept up through the fees.  As a home owner downsizes, either is a good investment.  
I hope that makes some element of sense... any questions, just ask!  We're always happy to help. 

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