The debate goes on! Potential buyers are weighing the merits of detached, freehold homes versus the advantages of condo life. Much of this decision is lifestyle focused. Who wouldn’t want the ease, convenience, and amenities that a condo offers – not to mention the view?
Then again, there’s a lot to be said for the spaciousness and privacy of a ground-level home. Open the door, and you’re outside, with no waiting for an elevator to reach the 19th level.
While these considerations factor in, today’s discussion is about costs, something that especially concerns many first-time buyers and retirees. Is a condo really a more affordable and easier way to get your foot on the property ladder? Or is a detached freehold the better long-term investment? Let’s dive deeper into the details.
A successful outcome when buying or selling a house in Etobicoke starts with being informed. Stay up-to-date with the latest in Toronto real estate by subscribing to our newsletter.
Condo Vs Freehold Defined
Toronto real estate comes with a world of structures, sizes, architectural styles, ages, and neighbourhoods to choose from. People who aren’t immersed in the industry can be surprised at what a condo or freehold actually means. The terminology refers to the structure of ownership rather than the type of dwelling.
- A condo means you own your individual living space, but the land and common areas are shared.
- A freehold means you own both your home and the land it sits on.
A freehold isn’t necessarily detached, and a condo isn’t always in an apartment-style building. Townhouses can be condos or freeholds. Detached homes are usually freeholds, but occasionally, they are condos, like when they are in a retirement community with shared amenities.
Searching for a knowledgeable, discreet, and caring Realtor® to represent you? Here are a few reasons to Buy a Home in The Kingsway with Tickins Furlani Real Estate.
Toronto Real Estate Prices Vary Considerably
If you look at the latest report from the Toronto Regional Real Estate Board at any given time, the average price for a house in the city is usually around the $1 million mark, sometimes more. However, that number barely begins to tell you what to expect when searching for a home or condo of your own.
At the entry-level range, you have small condos. They typically come with less square footage, but can be in busier, trendier locations. They can also have added benefits such as on-site party rooms, fitness areas, swimming pools, or even guest suites.
We can’t pinpoint an exact value since prices fluctuate. Nevertheless, a buyer could be looking at a base price of $400,000 and up for a small unit in what is likely an older building with fewer amenities.
Contrast that relatively low entry point with a freehold home, where prices could begin around $700,000 to $900,000. Often, these are the bungalows or split-levels that need some repairs before being move-in ready. Or they may be located on busier streets or in up-and-coming areas that buyers haven’t started paying attention to yet.
At the more luxurious end of the scale, high-end condos and freeholds can be listed at several million dollars and up. These can include older, heritage residences and waterfront estates to spectacular, wide-open penthouses overlooking the city. Most listings, however, fall somewhere in between, hence the million-dollar average, give or take.
Are you on the lookout for your dream home in The Kingsway or one of Etobicoke’s other top neighbourhoods? Start by browsing our featured listings.
Accessible Isn’t the Same Thing as Affordable
When you look at a Toronto condo listed at $500,000, you might conclude that it is more affordable than the freehold at $750,000. Your barrier to entry is definitely lower, which can make it easier to get your foothold on the property ladder.
For the condo, you’d need a $25,000 down payment, plus closing costs, including $12,950 for municipal and provincial land transfer taxes (based on a percentage of the purchase price). To close your transaction, you’d need at least $42,170.
For the freehold, the minimum down payment is $50,000, plus $22,950 in land transfer taxes (based on the higher, tiered percentage), in addition to all other closing costs. At the very least, you need $77,890 to move forward.
At first glance, the lower-priced listing appears more affordable, but let’s not forget your condo fees. These can add up to hundreds of dollars per month in addition to your mortgage and utility costs. Condos also come with the possibility of special assessments if the building needs repairs that the reserve funds can’t cover.
You might argue that your freehold will also need regular maintenance, so is there really any difference? The difference is that with your freehold, you have some control over when and how to manage the project. With the condo, you are simply expected to pay the bill.
Extra costs are a consideration for all home buyers. No matter what, it’s always advisable to request a thorough home inspection. When buying a condo, a review of the status certificate is also highly recommended.
Do you want a more accurate idea of what your beautiful new home or condo will actually cost? Find out by accessing our Buyer Calculator.
The Price and Benefits of Flexibility
Cost can be a deciding factor in whether to choose a condo or a freehold, but it isn’t the only concern. Each ownership structure offers varying degrees of flexibility in what you can and cannot do with your property.
With a condo, you can paint and decorate, but any structural upgrades must be approved by the condo board. If you invest in unauthorized projects, you might be ordered to restore your unit to the way it was at your own expense.
The name says it all with a freehold. You are responsible for all repairs and maintenance, but the good news is that you have more flexibility and control over what to do with your home. As long as you obtain the required permits and abide by any Homeowners Association guidelines (if applicable), you can remodel your house in any way you wish.
Every home buyer has different wants and needs, and your vision can change as time goes by. To ensure you make the best decision for your long-term goals, reach out to a local real estate agent who specializes in your area.
Are you ready to start your search for a home in The Kingsway or West Toronto? Tickins Furlani is here to help. Book a buyer’s consultation with us, give us a call, or send us an email to begin the conversation.
Meet Your Market Guides
We’re a local team that’s family-led, and dedicated to helping yours succeed.
Read Post