Magazine: Condo Contact - Winter 2013
CONDOMINIUMS – A SOUND INVESTMENT?
There is always talk of investing in Real Estate as part of your financial portfolio. But often, people look at residential properties first when looking for Rental Income Property. In the Real Estate Community, we differentiate between Residential and Condominium by their basic difference: one is a Freehold and the other is part of a Condominium Corporation and all that it implies. But often when Investor Clients are reviewing their options with their Realtor® they shy away from purchasing a Condo initially because of real and perceived costs associated with it. Often, they have heard horror stories of Condominium Boards making decisions, or large Special Assessments and potential legal issues that come with owning a Condo.
As with any investment, due diligence is critical during every stage of the process and a prudent Purchaser will have a solid team with their Realtor and Attorney who will help them realize the potential and limitations in buying into a Condominium Corporation. The key to making this process work is that from Day 1 there should be a positive relationship started with the Property Manager and by proxy, the Condominium Board.
Potential owners should be aware that just because they aren’t going to live in the unit/home itself doesn’t absolve them from responsibility or in some way limit their involvement. If anything, it’s an opportunity to get involved and participate in the process with having a tenant abide and respect the Condo By-Laws and decisions of its owners.
When a potential purchaser is looking to invest in a Condo they should do some research to make sure it’s the right decision: demographics, economics and a number of other factors should weigh into the decision. Being aware of what kind of owners have purchased within that community (ie. Professionals, Retiree’s, Families) will ensure that the tenants are a good fit and enjoy their Lease Period as well as the Owners who live within the Condominium Corporation itself.
There are a number of ways that a Property Owner can work with the Condominium Corporation from the beginning:
1. Management Relations: Making sure that the Property Manager is engaged in when it’s being rented; with not only the standard ‘contact info sheet’ but also providing any contact info they need in case they need to reach you. Checking in with the Manager periodically will also serve to maintain a relationship of open communication and clear support from your role.
2. Tenant Relations: Working with your tenants to ensure they understand the By-Laws etc, will not only work to protect you from unwanted issues but it also engages the tenant to be responsible and involved in their living arrangement.
3. Neighbour Relations: Talking with the neighbours, and assuring them that you will not be an ‘Absentee Landlord’ along with providing your contact info with any questions will go a long way. (Also informing your tenants that you know the neighbours and they you will serve as a reminder of your involvement as an owner who cares about their investment)
A key point to ensuring a successful Rental Income is to understand that you are not just buying into the benefits of the Condominium Corporation, but are entering into an agreement that if treated like any other contract will provide you a positive framework towards your goal of a sound investment.
Mike Lewicki is a Sales Representative at Keller Williams VIP Realty (Independently owned and operated brokerage) where he primarily focuses on Residential and Condominium Real Estate in Ottawa and Surrounding Area. You can read his blog about things that matter in Real Estate at www.condosbyreferral.com.
- 30 -