Recently I worked with a client looking to purchase a condo in the Beltline area. My client, a lawyer from Ontario, has had significant experience in condo living, serving on the condo board in the building where he lives in Toronto. After viewing many properties, the decision came down to one of two units in two different buildings.
Both buildings were nearly identical in age, number of units, style and size of units and parking (part indoors and part outside). The first building was located in a very desirable area with many amenities such as shops and restaurants steps from the door and offered a strong reserve fund, but had outdated common areas. The second building was in an emerging neighbourhood, with substantial construction of upscale condos and amenities in the works, but currently not as good a location as the first building and it did not have as strong a reserve fund. The suite in the first building was a penthouse and the suite in the second building was not.
While in different buildings, each condo met the client’s needs in terms of size, layout and number of bedrooms and price point. Which one to choose? After much research on my part it may surprise you that the client chose the unit in the second building with the less superior location and smaller reserve fund! Here’s why.
The sale statistics for the building he chose showed a trend of buyers repeatedly paying more for units in this building than in the first building which offered the better location and large reserve fund. It was obvious from first entering the chosen building that the owners and management had invested a lot of time, money and effort into their building. The elevator had been replaced, the lobby updated with new, longer lasting materials in contemporary colours, new window coverings were in the lobby, hallway lighting had been improved, silver hardware replaced the older brass style, there were updated fire exit signs, new parkade lighting installed and the parkade had been painted. In addition, after reviewing the condominium documents it was revealed more improvements where scheduled. It was evident the owners were proud to call this building home by wisely spending money to update and maintain the structure and common areas of their building.
Although the reserve fund was not as strong as the first building, it was clearly demonstrated that the owners in this building were actively involved in maintaining and increasing the collective value of each owner’s investment. The proof of higher value in the second building was demonstrated through sales of $20,000-$40,000 more for the same type of condo as compared to the first building. Through research and analysis my client bought a condo in a superior building which will protect and increase his investment in the future.