The big problem with condos is that there is a BIG RISK you can't control - and that is how the property is managed. Sure, there are advantages. When things are going well and you have a good tenant in place, you won't have to do a thing. Most major issues are handled by the condo corporation (or strata council). But the big issue for us is that, unless you're willing to take on the part time job of sitting on the council for each and every property you own a condo in ... and that often means getting voted into that position so you can't be guaranteed a spot just because you want it ... you really can't control what happens in your building. And it is very possible with poor property management and a mediocre group running the property that you could find all of your positive cash flow being eaten away by increasing monthly fees and levies to fix big problems along the way. Now - am I saying never buy a condo? Not exactly. But in many cases I think you'll do better to find an investment that you have a higher degree of control over. If you're looking at investing in a condo here are a few questions to ask:
Who is on the council currently? Get their backgrounds. Read the minutes from past meetings very carefully to get a good sense of any issues the property may have and
how it is being run. Even then, unless you're going to become an active participant in the strata council you can't
be sure it will continue to run smoothly but at least you will have a good understanding of how it has been run and
of the issues that could arise. Published on April 1st, 2010 (Picture is not of the townhomes we spoke of in this article.) Get the Rev N You with Real Estate Starter Tips Guide free when you sign up for our complimentary Rev N You with Real Estate e-zine. We respect your privacy and WILL NEVER SELL OR GIVE AWAY your name and e-mail address to ANYONE!
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