The 1% rule does not apply to the (currently inflated) value of houses. A million dollar home was a half million dollar home a few years ago, and the rule of thumb is now 0.5% Which is $5,000 a year. The average fees for a condo HALF the size of a 3 bedroom house are more than double the maintenance cost of a house. If you want a condo, and can afford the fees, it's your choice. But as an investment it's a ticking time bomb. You've bought a cube of air, nothing more.
Fair points about the 1% rule-it’s more of a guideline than a hard rule, but worth noting that house costs and maintenance have both inflated over time. However, I’m curious about the ‘double the cost for half the size’ claim. In my experience, condo fees are only marginally higher than house maintenance costs, especially when you factor in all-inclusive amenities. The main difference is that condo maintenance is on a mandatory schedule, while houses give you the flexibility to delay repairs (though this can cost more long term). So, while some years might be cheaper with a house, over time, the costs tend to even out.
@@undertheradarrealestate That's correct, historically condo fees haven't always been as punishing as they are now. But keep in mind with a house you are talking double or triple the square footage, a basement, back yard, garage, not comparable in terms of a physical asset you carry forward, and can improve/upgrade you don't have that option with a condo. Your experience gives you a subjective impression, nothing wrong with that, but as mentioned, as they say, the numbers tell a different story. Not to mention, to avoid eviction, in old age you can survive on a slowly sinking ship, many do anyway, and patch up a leaky roof that should be replaced. You don't have that option with a condo.
Thanks for the engagement! You’re right, freeholds have that potential to add value… if you’ve got the cash, time, and DIY spirit of a reality TV home reno star. But let’s be honest-not everyone is itching to spend weekends fixing leaky roofs or saving up for a new foundation. That’s where condos shine: fewer headaches, more convenience. And while you can’t build a backyard, a killer kitchen or updated flooring in a condo can still give you a great ROI. Different strokes for different folks, right?
@@undertheradarrealestate Lol, All valid points, and absolutely, vive la difference. If a condo suits your lifestyle, go for it. But it's an investment, and ROI is the goal, it's hard to imagine a worse time to buy. There is already a glut of unsold empty condos , and 50,000+ new units hitting the Toronto market in the next 2 years. 80% of recent condo investors are underwater. Not much shine and a heck of a bigger headache than a leaky roof.
Last condo I lived in the elevators were constantly breaking. Took months for parts to arrive from Europe. Condo fee doubled in time I lived there from 400 to 750, hardly any ammenities. Condos are just a bad investment, ok for lifestyle, but they decline in value over time, whereas land always goes up.
Fair points-costs rise over time, whether it’s a condo OR a house. A new building (like a new house) starts cheap, but as elevators, roofs, or HVAC systems age, expenses go up. If your furnace breaks in a house, you’re paying to fix it, right? Same idea with condos. Also, condos sit on land too-and that land appreciates in value just like a house. Out of curiosity, how long did it take for your fees to jump from $400 to $750? That kind of increase (if it's over a short period) might signal bigger repairs or reserve fund issues.
Over 10 years, a jump from $400 to $750 is about a 6.5% annual increase. While that sounds steep, it’s not far off from maintaining a 10-year-old house-HVAC servicing, roof fixes, and general wear add up. For perspective, a new AC unit alone can cost $4,000-$7,000, so that $4,200 in extra condo fees over a decade doesn’t seem so bad when compared to house upkeep. It’s all about where you want to spend your time and money!
@@undertheradarrealestate Doesn't seem so bad, hardly scientific nor useful for a prospective owner, there are accepted guidelines and statistics, and they tell a different story.
So you're telling me that a condo with no swimming pool, no jacuzzi, no gym, and no festival room still requires me to pay $1,000 in fees? Seriously? Come on, don’t try to justify the unjustifiable just to make a sale and earn a commission. Be realistic and honest-people will trust you more that way.
Wow, if you can find me a house with $0 in annual maintenance costs, I’ll quit my job on the spot! 😂 But in all seriousness, none of the condos in the video had $1,000 fees with zero amenities. Maybe give it a full watch-you might be surprised at what you find. I promise, I’m not trying to sell anyone a festival room!?!
@@undertheradarrealestate You are cherry picking examples. I was just talking to someone whose fees, 2 bedroom condo, recently jumped from $1600 to $2400. Which is just about the cost of renting a similar condo, and soon to be more.
The stratas sold to FTHB is a lot of garbage. investor heavy complexes that play kick the can saddling future owners w all their deferred costs so past ones could save a dime. My house per sqft is cheaper to maintain. Yes, I have to clean gutters, garden, shovel and mow. I spent some money making my home easier to care for, and garden lower maintaince. I can hire the kid across the street to shovel my drive if I want. yes I have to own home and garden tools. I've picked up plenty of high quality ones second hand for a fraction of what they cost new. Being in full control of my maintenance I can pay for a better quality roof or windows so my comfort is greater, or my home is cheaper to maintain down the line. I can also spend money sooner while an issue is still smaller and cheaper easier and less invasive to tackle than be delayed by the snails pace condo/strataland works in. Yes, houses will have big ticket repairs one day. I set aside money for future repairs. when our strata sold, my OH didn't get any of our many years of contributions to the CRF back. With my house that ENTIRE account invested I have set aside for repairs moves with me to my next home! My neighbours can let their houses rot and live with buckets in their living room, and I don't have to! No more strata life spending so much while living in trash conditions on the common property like old drafty windows that should have been replaced a decade ago. No more expensive master insurance policy w large YoY increases, and having to buy even more insurance that covers next to nothing on top. No more five figure snow removal contracts, no more expensive property management companies, no more needing to read minutes or attend agms and worry about how broke or cheap my neighbours are. A nice well kept condo built for end users, with mostly owner occupied units as forever homes will be GREAT for people who want that lifestyle. Unfortunately that's not most condos or stratas, it's a select few of them! Buying into investor heavy FTHB trash can make you miss your worst days renting, so glad were were able to flee strata living even if it meant sacrificing location to be in a house.
Wow, this is such a detailed and thoughtful take-I appreciate you taking the time to write this! I don’t disagree with a lot of what you’re saying here. Condo living really does come down to a lifestyle choice, and while there’s a premium over freehold home ownership, the point of the video was to show that the spread isn’t always as large as people might think. You’re absolutely bang-on about investor-heavy buildings though-when most units are rented out, the pride of ownership just isn’t the same. That often shows up in the maintenance fees over time compared to buildings with mostly end-user occupants. It’s a huge factor that buyers should definitely keep in mind!
@@undertheradarrealestate Thank you. ours didn't have mostly investors, we had a good number and it's now a big red flag to me, but even people living in their units were a lot of owners who wanted to spend as little as possible each month in strata maintenance even though things were starting to fall apart because these weren't homes, they were living in their future house down payment for a few yrs and wanted to keep low fees to attract buyers. also mean to say, we also had people living there it was home, but who actually couldn't afford the maintenance costs of home ownership that complained when fees would rise. :( if they were in a house it would be rotting too! even though there are ppl who think they should be, condos are NOT subsidized housing! In the end, If you have some wherewithal on building maintenance, are on top of reoccurring maintenance and don't let issues fester I find my house much more predictable with it's upkeep costs. But I also like the privacy a house provides. My grandparents loved their condo, and were happy to pay the premium for the lifestyle. my parents were horrified w how high the condo fees were, but when my grandparents passed away, the agent we got to sell was excited because it was such a well kept up building!- as you know, underground parking, elevators and balconies all cost $$ to correctly upkeep over decades. the owners corps care paid off, the unit sold right away, actually got multiple offers when the condo market was not doing well in the area and it sold to an owner who lived there for over a decade. -In my mind, THAT's a proper condo.
*Cue the condo trolls* lol... Better management and better build quality could help in keeping fees in check. BUT there are a few hidden gems in a hidden gem neighbourhood where maintenance fees are pretty reasonable ;)
The 1% rule does not apply to the (currently inflated) value of houses. A million dollar home was a half million dollar home a few years ago, and the rule of thumb is now 0.5%
Which is $5,000 a year. The average fees for a condo HALF the size of a 3 bedroom house are more than double the maintenance cost of a house. If you want a condo, and can afford the fees, it's your choice. But as an investment it's a ticking time bomb. You've bought a cube of air, nothing more.
Fair points about the 1% rule-it’s more of a guideline than a hard rule, but worth noting that house costs and maintenance have both inflated over time. However, I’m curious about the ‘double the cost for half the size’ claim. In my experience, condo fees are only marginally higher than house maintenance costs, especially when you factor in all-inclusive amenities. The main difference is that condo maintenance is on a mandatory schedule, while houses give you the flexibility to delay repairs (though this can cost more long term). So, while some years might be cheaper with a house, over time, the costs tend to even out.
@@undertheradarrealestate That's correct, historically condo fees haven't always been as punishing as they are now. But keep in mind with a house you are talking double or triple the square footage, a basement, back yard, garage, not comparable in terms of a physical asset you carry forward, and can improve/upgrade you don't have that option with a condo. Your experience gives you a subjective impression, nothing wrong with that, but as mentioned, as they say, the numbers tell a different story. Not to mention, to avoid eviction, in old age you can survive on a slowly sinking ship, many do anyway, and patch up a leaky roof that should be replaced. You don't have that option with a condo.
Thanks for the engagement! You’re right, freeholds have that potential to add value… if you’ve got the cash, time, and DIY spirit of a reality TV home reno star. But let’s be honest-not everyone is itching to spend weekends fixing leaky roofs or saving up for a new foundation. That’s where condos shine: fewer headaches, more convenience. And while you can’t build a backyard, a killer kitchen or updated flooring in a condo can still give you a great ROI. Different strokes for different folks, right?
@@undertheradarrealestate Lol, All valid points, and absolutely, vive la difference. If a condo suits your lifestyle, go for it. But it's an investment, and ROI is the goal, it's hard to imagine a worse time to buy. There is already a glut of unsold empty condos , and 50,000+ new units hitting the Toronto market in the next 2 years. 80% of recent condo investors are underwater. Not much shine and a heck of a bigger headache than a leaky roof.
Last condo I lived in the elevators were constantly breaking. Took months for parts to arrive from Europe. Condo fee doubled in time I lived there from 400 to 750, hardly any ammenities. Condos are just a bad investment, ok for lifestyle, but they decline in value over time, whereas land always goes up.
Fair points-costs rise over time, whether it’s a condo OR a house. A new building (like a new house) starts cheap, but as elevators, roofs, or HVAC systems age, expenses go up. If your furnace breaks in a house, you’re paying to fix it, right? Same idea with condos.
Also, condos sit on land too-and that land appreciates in value just like a house. Out of curiosity, how long did it take for your fees to jump from $400 to $750? That kind of increase (if it's over a short period) might signal bigger repairs or reserve fund issues.
@@undertheradarrealestate10 years
Over 10 years, a jump from $400 to $750 is about a 6.5% annual increase. While that sounds steep, it’s not far off from maintaining a 10-year-old house-HVAC servicing, roof fixes, and general wear add up. For perspective, a new AC unit alone can cost $4,000-$7,000, so that $4,200 in extra condo fees over a decade doesn’t seem so bad when compared to house upkeep. It’s all about where you want to spend your time and money!
@@undertheradarrealestate Doesn't seem so bad, hardly scientific nor useful for a prospective owner, there are accepted guidelines and statistics, and they tell a different story.
So you're telling me that a condo with no swimming pool, no jacuzzi, no gym, and no festival room still requires me to pay $1,000 in fees? Seriously? Come on, don’t try to justify the unjustifiable just to make a sale and earn a commission. Be realistic and honest-people will trust you more that way.
Wow, if you can find me a house with $0 in annual maintenance costs, I’ll quit my job on the spot! 😂 But in all seriousness, none of the condos in the video had $1,000 fees with zero amenities. Maybe give it a full watch-you might be surprised at what you find. I promise, I’m not trying to sell anyone a festival room!?!
@@undertheradarrealestate You are cherry picking examples. I was just talking to someone whose fees, 2 bedroom condo, recently jumped from $1600 to $2400. Which is just about the cost of renting a similar condo, and soon to be more.
The stratas sold to FTHB is a lot of garbage. investor heavy complexes that play kick the can saddling future owners w all their deferred costs so past ones could save a dime.
My house per sqft is cheaper to maintain.
Yes, I have to clean gutters, garden, shovel and mow. I spent some money making my home easier to care for, and garden lower maintaince. I can hire the kid across the street to shovel my drive if I want. yes I have to own home and garden tools. I've picked up plenty of high quality ones second hand for a fraction of what they cost new.
Being in full control of my maintenance I can pay for a better quality roof or windows so my comfort is greater, or my home is cheaper to maintain down the line. I can also spend money sooner while an issue is still smaller and cheaper easier and less invasive to tackle than be delayed by the snails pace condo/strataland works in.
Yes, houses will have big ticket repairs one day. I set aside money for future repairs. when our strata sold, my OH didn't get any of our many years of contributions to the CRF back.
With my house that ENTIRE account invested I have set aside for repairs moves with me to my next home! My neighbours can let their houses rot and live with buckets in their living room, and I don't have to! No more strata life spending so much while living in trash conditions on the common property like old drafty windows that should have been replaced a decade ago. No more expensive master insurance policy w large YoY increases, and having to buy even more insurance that covers next to nothing on top. No more five figure snow removal contracts, no more expensive property management companies, no more needing to read minutes or attend agms and worry about how broke or cheap my neighbours are.
A nice well kept condo built for end users, with mostly owner occupied units as forever homes will be GREAT for people who want that lifestyle. Unfortunately that's not most condos or stratas, it's a select few of them! Buying into investor heavy FTHB trash can make you miss your worst days renting, so glad were were able to flee strata living even if it meant sacrificing location to be in a house.
Wow, this is such a detailed and thoughtful take-I appreciate you taking the time to write this! I don’t disagree with a lot of what you’re saying here. Condo living really does come down to a lifestyle choice, and while there’s a premium over freehold home ownership, the point of the video was to show that the spread isn’t always as large as people might think.
You’re absolutely bang-on about investor-heavy buildings though-when most units are rented out, the pride of ownership just isn’t the same. That often shows up in the maintenance fees over time compared to buildings with mostly end-user occupants. It’s a huge factor that buyers should definitely keep in mind!
@@undertheradarrealestate Thank you. ours didn't have mostly investors, we had a good number and it's now a big red flag to me, but even people living in their units were a lot of owners who wanted to spend as little as possible each month in strata maintenance even though things were starting to fall apart because these weren't homes, they were living in their future house down payment for a few yrs and wanted to keep low fees to attract buyers. also mean to say, we also had people living there it was home, but who actually couldn't afford the maintenance costs of home ownership that complained when fees would rise. :( if they were in a house it would be rotting too! even though there are ppl who think they should be, condos are NOT subsidized housing!
In the end, If you have some wherewithal on building maintenance, are on top of reoccurring maintenance and don't let issues fester I find my house much more predictable with it's upkeep costs.
But I also like the privacy a house provides.
My grandparents loved their condo, and were happy to pay the premium for the lifestyle. my parents were horrified w how high the condo fees were, but when my grandparents passed away, the agent we got to sell was excited because it was such a well kept up building!- as you know, underground parking, elevators and balconies all cost $$ to correctly upkeep over decades. the owners corps care paid off, the unit sold right away, actually got multiple offers when the condo market was not doing well in the area and it sold to an owner who lived there for over a decade. -In my mind, THAT's a proper condo.
Maintenance fees are a killer. Someone needs to solve this 👀
*Cue the condo trolls* lol... Better management and better build quality could help in keeping fees in check. BUT there are a few hidden gems in a hidden gem neighbourhood where maintenance fees are pretty reasonable ;)
Some of these people think owning a house is free😂 a houses property tax is sometimes the cost of a yearly condo maintenance fee.
@@kjss4345 Sure a condo 1/4 the size of a small house. Not remotely comparable.
Never buy a condo.