A prime motivation for leaving suburbia for the city lights and condo towers, has been the promise of carefree living. No more cutting lawns, shovelling snow, or home maintenance. Instead of the headache of home ownership, residents would be left with more time to enjoy all the joys that urban living has to offer. So, how does reality measure up to the promise? And how does it really compare to owning a new semi-detached or detached home in the urban centre.
Certainly, purchasing a heritage property in the urban core will come with more than its share of maintenance challenges. Some of these classic homes can exude a warmth and character that it is virtually impossible to replicate with new construction, but you pay a steep price in terms of home repairs and maintenance headaches. New construction is a completely different matter. Not only does a newly built home avoid the need for the usual home repairs for decades to come, new design and construction methods further reduce annual maintenance requirements. Everything from smaller yards and eco friendly landscaping, to new maintenance free materials and furnishings, can dramatically reduce the maintenance effort required.
New construction does not, however, completely eliminate the need for property maintenance such as shovelling snow and maintaining grass and/or gardens. It may involve smaller driveways, and yards, but they still require a level of work. For many this is a very manageable, even pleasurable pursuit. I just don’t happen to be one of those people. My home is my refuge, and when I return after a long day, I don’t want to be confronted with yard work. For me the answer is simple, and I am shocked that more people searching for a carefree home don’t consider what I do. That is; I have outsourced my home maintenance and yardwork, It has been extremely convenient and surprisingly affordable to do so. I have a sizeable property, and it always looks beautiful, for much less than I would pay in condo fees if I lived in a condo tower. You may recall in our previous article on costs, that we shared a Toronto based comparison of costs of outsourcing home maintenance with condo fees, and found that those outsourcing costs were marginal.
When you look more deeply into the reality of carefree condo living, you discover that it doesn’t measure up to the promise. It is far from carefree, but it does avoid the need to shovel snow and rake leaves. That said, it does not come for free. First of all, a good portion of your condo fees go into paying for these services, and condo fees aren’t cheap today, with some high-end condos charging as much as $1 per square foot. At a modest 1200 square foot condo, you would be paying $14,400 per year – enough to cover an additional $700,000 mortgage at today’s interest rates! That only tells a small part of the story. What is often overlooked, is how all this gets done in a condominium and what implications that has for the homeowners.
My friend’s mother owns a unit in a 33 year old condominium. She has lived there for 25 years and is comfortable with it, but she completely stresses over condominium board decisions, as well as recent and pending assessments that are required to deal with with refreshing building elements. In the past 10 years the (owner managed) condominium board has had to resurface the outdoor driveway, gut the parking garage, re landscape the front of the building on 2 occasions, replace building elevators, repair all the balconies, replace all the rugs in the hulls and entrance, replace all the internal lighting, paint the hallways, resurface all the doors, and replace the majority of windows around the condo. Each of these investment decisions involved multiple board meetings and and in total, required several financial assessments. The politics as well as the cost of this process has been stressful, and wasted expenditures have been frustrating given the individual’s inability to have any control over these costs. Besides all this, individual unit owners are encouraged to volunteer their time to help with multiple committees and outside gardening, among other requirements. This was a suppose to be carefree living!
With all this considered, a newly constructed freehold semi-detached or detached home certainly appears like it could be the lower maintenance/overhead option when compared to condo living.
There is however, an extra challenge of limited supply. There are a lot more condominium tower units than new urban detached and semi-detached housing. The scarcity of quality newly constructed semi-detached and detached homes is a real issue, but of course, if you are lucky enough to secure yourself one of these gems, the investment advantage of this more scarce resource can be significant.