Money Matters

Is It Smart To Buy A Condo?

Editor’s Note: As we get older, many of us think about downsizing from a house to a condo, because it’s easier to manage our lives in a simpler place. And we’d like to save as much money on home repairs as possible, because fixed incomes and Medicare don’t cover all essential expenses. Sometimes, though, the decision to buy or lease a condo isn’t as clear-cut as you’d like. Here, from a top expert, are some smart questions to ask yourself before making a move.


By Dan Barnabic, author of The Condo Bible For Americans

1. Can I afford a condo unit or should I be looking into leasing?

Wondering about buying a condo or leasing it? In fact, for some people with limited income, leasing may be a better option. Carefully consider your income in relation to condo expenses, such as maintenance fees and special assessments. These are mandatory expenses, and maintenance fees are payable every month. If you miss them for a couple of months, your unit will be liened by the homeowner association (HOA), which can then proceed to sell your unit to recoup their liens. While special assessments may not occur on a monthly basis, they become more frequent and costly as buildings age over time.

2. Am I ready to face uncertainties with the future rise of maintenance fees and special assessments?

It is important to consider the finite lifespan of condo buildings – meaning just like any other building, they are bound to deteriorate over time. Bear this in mind and consider the financial uncertainties as you may have to foot your share of the cost for major repairs in the future. If you want to enjoy the peaceful “no fuss, no muss” lifestyle promised by condo developers, you may be better off just leasing instead of buying. You pay your pre-set monthly rental, leaving the unit owner to worry about the increases in monthly maintenance fees and other costs associated with owning.

3. If I am not actively involved by monitoring the association’s board members and management team, can things go wrong?

Think of a condo as a community of people in the most basic hierarchy. There are rulers (otherwise known as homeowner association board members) who govern the complex, and then there are some unit owners who are content with the everyday running of the complex, enjoying their condo lifestyle and assuming their complex is run professionally and efficiently. Eventually, those unconcerned unit owners are in for a rude awakening once they learn of the discord among board members, mismanagement and special assessments. The only way to avoid complacency leading to such events is to become an actively involved condo owner. You may not wish to become a board member yourself, but you should always be informed on all the information that would help you discern whether board members are doing their job diligently. 

4. Do I have to perform due diligence on the condo complex I decide to buy into?

The idea here is not to rush, but check the reputation of the building. Take a careful look at the status certificate. Make sure the complex has sufficient reserve funds to prevent a steep, sudden increase in maintenance fees. A few hundred dollars spent to check these facts may save you tens of thousands of dollars later on and prevent you from being stuck in a poorly chosen unit. You’ll be glad you made the effort to find a condo that is properly run and has a long and prosperous future.

5. Should I allocate more than one-third of my household income on the carrying costs associated with condo ownership, such as maintenance fees, special assessments, realty taxes and mortgage payments?

Consider affordability to be the most important factor to take under consideration before either buying or leasing. Spending only one-third of your income on housing applies equally whether you want to buy or lease a condo. Never compromise your quality of life by overextending yourself on carrying costs or lease payments that would cost you more than 30 percent of your household income.

Dan S. Barnabic is a noted consumer advocate and keen observer of condo proliferation. He has worked in real estate as an agent, broker, property manager, and condominium developer. His over four decades in the real estate industry began in the 1970s, and intensified after he witnessed the major crashes of the early 1990s and 2006. The Condo Bible is available in both American and Canadian editions. The Condo Bible for Americans is currently available via Amazon and Barnes & Noble in paperback. Find Dan on Facebook (www.facebook/condobible), Twitter (@condobible) and at

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