Buying new condo vs "used" condo

[tiger_handheld]

What are some goods and bads of buying new vs. old?
Lets assume the price is the same and the neighborhood is the same.
How do you decide which is better?


Off the top of my head I can come up with the following:


old

good
- usually larger sqft

bad
- seems like high strata fee
- potential repairs (ie. roof)


new

good
- has warranty
- probably low strata fee

bad
- pay gst
- low sqft

if you had to go through this decision when purchasing, share your decision making process.

[Jmac]

I bought used in Burnaby back in 2006 because it was what best met our needs and budget. It wasn't that old, though (built in the late-90s) ...

Considered new, but the new ones in that location seemed pretty poorly constructed and were more expensive.

[tiger_handheld]

Originally Posted by Jmac

I bought used in Burnaby back in 2006 because it was what best met our needs and budget. It wasn't that old, though (built in the late-90s) ...

Considered new, but the new ones in that location seemed pretty poorly constructed and were more expensive.

Can you expand on "construction quality" all things (price & neighbourhood) being equal, this would be a factor..

[maksimizer]

I work on multiple construction / maintenance sites as an HVAC tech, its a hit and miss for "quality".

Ex. Brand new building, 2 months old, 1500$ rent, 15K strata bill.
Ex. Brand new building, 2 months old, 1200$ rent, 500$ strata bill.

Hit and miss. Its like buying a car.

[cdizzle]

My fiance and I recently purchased an older apartment unit (17 years old).
For the same price, we would definitely not be able to obtain a similarly sized unit with our 2 bed / 2 bath requirement.

Luckily, previous owner kept the place in a really good condition! The construction quality is kinda off...I found that one of the corners in the 2nd bedroom isn't a 90 degree angle.

[FS1992EG]

Do you find yourself absolutely needing to purchase a condo right now? From what I have seen, people buy things out of want, not necessity.

Example for me, if I netted over 100k per year. I still would not touch real estate for another 5-10 years.

[sonick]

Assuming the building is well maintained, I definitely would go for the value of owning an older place vs. a brand new one. There are cultures where there is a superficial prestige to owning new, and they pay a premium for it; one which I am not willing to bid against.

Plus, with older buildings you pretty much know the quality of the building after it's been broken in for a few years.

Also as for strata fees, they may seem low to start but I have heard that almost always they will go up once they figure out the shortcomings of the building that requires work.

[tiger_handheld]

Originally Posted by FS1992EG

Do you find yourself absolutely needing to purchase a condo right now? From what I have seen, people buy things out of want, not necessity.

Example for me, if I netted over 100k per year. I still would not touch real estate for another 5-10 years.

This is NOT the point of the thread.

[stewie]

Originally Posted by sonick

Also as for strata fees, they may seem low to start but I have heard that almost always they will go up once they figure out the shortcomings of the building that requires work.

can strata fees just increase without anyone knowing? one month you pay 300, next month its 450?

or is it like a grandfathered type thing where if you're in before the increase, you stay at the lower strata, and newcomers pay the new strata?

[sonick]

I believe its set each year and changes for all owners

[Lomac]

Originally Posted by stewie

can strata fees just increase without anyone knowing? one month you pay 300, next month its 450?

or is it like a grandfathered type thing where if you're in before the increase, you stay at the lower strata, and newcomers pay the new strata?

As far as I can tell by reading through Strata law, it can only be changed once a year during the budget meeting, and it affects all owners within the building. The Strata must also inform all owners within two weeks of a fee change.

[tiger_handheld]

strata fees are annually reviewed and adjusted by strata council and approved by strata members at the annual AGM. If there needs to be extra funds and the contingency fund cannot cover it, a special meeting is held and a 'levy' is approved by members.

source: current strata member


on topic: any other factors - or is above it?

[GLOW]

you can review strata minutes in an old condo. this is good in a sense it tells you if the place is good/bad shape, or if the strata council is running things well or poorly.

in a new condo you won't know until the strata is created and start holding meetings. but i guess if you're so inclined you can get involved from the get go and try to steer the ship in the right direction.

[underscore]

Depending on how old and how new you're talking, things like sound insulation will come into play as well. Also any place that's brand new is still unproven, there could be a whole mess of mystery issues that can pop up with new builds.

[GLOW]

new build warranty has $ limits too. friend had a foundation problem covered by the warranty. they had subsequent issues not covered by warranty b/c the first issue cost over 1.5 mill to fix. the new home warranty limit was 1.5mill IIRC

unfortunately the original issue should have been addressed by the builder but that didn't. they let the owners use their warranty to fix it.

[underscore]

^ and being a condo, depending on the issues you could end up having to live elsewhere for years while things drag on. Some condos in Kelowna had leakage and stability issues years back and I think they're still dragging that on.

edit: Googling it the owners were reporting problems in Aug 2003, they weren't recognized til Oct 2005 and the work didn't begin til Jan 2007 which ended up taking something like 2 years with the building gutted at one point.

[meme405]

There is a lot of angles to this, and in the end it comes down to the person, and the places they are looking.

Burnaby has A LOT of recent construction's and even more that are still coming onto the market, Brentwood, and Gilmore being the most notable as each of them encompass like 10+ towers.

I have now been through the pre-sale and buying new process twice and both times I had negative experiences.

Meanwhile I have also bought used and once I learned (or was taught) what kind of questions I need to ask and the reasearch I need to do, you can find some good stuff out there.

Buying new the issues that eventually cropped up were:

-Unsold units in both buildings remained developer owned, which meant that the developer controlled a lot of the Strata lots and therefore had a disproportionate say in the management of the building.
-The strata council which was voted in was very Green, and the members kept switching and everything got messed up, things like organization of key fobs and parking entry and all that stuff got fucked up and the building security and budgets suffered
-Warranty work was shit, and owners got fed up and they were left on the hook for many things. I thought when I bought a building by Bosa I could avoid this issue as they are supposed to be a good developer, but they ended up switching developers to one of their many sub companies (legacy developments) and from then on out proceeded to fuck every owner
-Back on the security issues, there was trades in and out of the building even once we had reached the occupancy phase, and there was many fobs we could not cancel so even old trades which were no longer supposed to be on site has access to the buildings, we had break ins in the storage areas, and parking garages, and just damage and havoc in general.

The complaints were numerous and I ended up selling and moving away because it was such a fucking gong show.

In terms of buying used:

-It depends on how old you are really going.
-But look back at their historical maintenance fees
-Look at their contingency fund, older buildings should have a lot of money saved in contingency, this fund helps in events like roof replacement, or building painting, or interior renovations. This fund is what can be the difference between a special assessment of 10k a unit, and having your cladding repaired for free.
-Look through their meeting minutes, and see what work has been done, if there is any documented problems, and how often strata members switch around.

The biggest thing I can say, if you don't know what you are looking at, get an inspector. Hell just bring in a friend who know a little about construction and have him poke around. The last thing you need is to buy a building which has settled 6 inches, or is in the midst of settling. These can become expensive problems.

There is a lot to this and being that my family was doing a lot of investment properties and such I learned a lot. Its hard to pass on that information, but there is ways of protecting yourself.

[320icar]

One if the biggest reasons new buildings strata fees are so low is because there's no constingency fund, or the pay in is very cheap. Then over the years it keeps going up and up and up, since it's not a fixed rate.

I'd choose a larger, well run, good condition apartment any day. But cement is key for me

[tiger_handheld]

Originally Posted by meme405

There is a lot of angles to this, and in the end it comes down to the person, and the places they are looking.

Burnaby has A LOT of recent construction's and even more that are still coming onto the market, Brentwood, and Gilmore being the most notable as each of them encompass like 10+ towers.

I have now been through the pre-sale and buying new process twice and both times I had negative experiences.

Meanwhile I have also bought used and once I learned (or was taught) what kind of questions I need to ask and the reasearch I need to do, you can find some good stuff out there.

Buying new the issues that eventually cropped up were:

-Unsold units in both buildings remained developer owned, which meant that the developer controlled a lot of the Strata lots and therefore had a disproportionate say in the management of the building.
-The strata council which was voted in was very Green, and the members kept switching and everything got messed up, things like organization of key fobs and parking entry and all that stuff got fucked up and the building security and budgets suffered
-Warranty work was shit, and owners got fed up and they were left on the hook for many things. I thought when I bought a building by Bosa I could avoid this issue as they are supposed to be a good developer, but they ended up switching developers to one of their many sub companies (legacy developments) and from then on out proceeded to fuck every owner
-Back on the security issues, there was trades in and out of the building even once we had reached the occupancy phase, and there was many fobs we could not cancel so even old trades which were no longer supposed to be on site has access to the buildings, we had break ins in the storage areas, and parking garages, and just damage and havoc in general.

The complaints were numerous and I ended up selling and moving away because it was such a fucking gong show.

In terms of buying used:

-It depends on how old you are really going.
-But look back at their historical maintenance fees
-Look at their contingency fund, older buildings should have a lot of money saved in contingency, this fund helps in events like roof replacement, or building painting, or interior renovations. This fund is what can be the difference between a special assessment of 10k a unit, and having your cladding repaired for free.
-Look through their meeting minutes, and see what work has been done, if there is any documented problems, and how often strata members switch around.

The biggest thing I can say, if you don't know what you are looking at, get an inspector. Hell just bring in a friend who know a little about construction and have him poke around. The last thing you need is to buy a building which has settled 6 inches, or is in the midst of settling. These can become expensive problems.

There is a lot to this and being that my family was doing a lot of investment properties and such I learned a lot. Its hard to pass on that information, but there is ways of protecting yourself.

Thanks for your very useful post!

[MindBomber]

Originally Posted by 320icar

One if the biggest reasons new buildings strata fees are so low is because there's no constingency fund, or the pay in is very cheap. Then over the years it keeps going up and up and up, since it's not a fixed rate.

I'd choose a larger, well run, good condition apartment any day. But cement is key for me

I came into the thread to suggest concrete (cement is only one component of the mixture) is completely worth the extra cost, in my experience.

[tiger_handheld]

Originally Posted by 320icar

One if the biggest reasons new buildings strata fees are so low is because there's no constingency fund, or the pay in is very cheap. Then over the years it keeps going up and up and up, since it's not a fixed rate.

I'd choose a larger, well run, good condition apartment any day. But cement is key for me

regardless of if its new or used? cuz if that's the case, then point is moot. UNLESS , older buildings or newer buildings tend to be more concrete.

[meme405]

Almost all highrise structures in Vancouver are Concrete, and that fact means that we know how to do it well, and can do it cheaply.

So are you guys talking about like 3-4 stories when you say you are cement is key? Cause the only other option I really see is wood story and you normally don't build more than townhouses with that. Steel buildings are few and far between in Vancouver.

[underscore]

I believe legally they can't build with wood over 4 stories, generally concrete > wood for sound and such but if they use the right insulating materials the newer wood places can be quite quiet too.

[MindBomber]

Originally Posted by meme405

Almost all highrise structures in Vancouver are Concrete, and that fact means that we know how to do it well, and can do it cheaply.

So are you guys talking about like 3-4 stories when you say you are cement is key? Cause the only other option I really see is wood story and you normally don't build more than townhouses with that. Steel buildings are few and far between in Vancouver.

Originally Posted by underscore

I believe legally they can't build with wood over 4 stories, generally concrete > wood for sound and such but if they use the right insulating materials the newer wood places can be quite quiet too.

In 2009 the Provincial Building Code was changed to allow six-storey wood frame construction. Prior to the change code only allowed for four-storey wood frame construction. And, wood frame is way cheaper than concrete so most sub-six storey structures are built with the former.

[GLOW]

not sure why they allowed 6 story. only new ones i know of burned down by "accident" during construction.