Understanding the Types of Condos in the Market
by Douglas Gray
From: 101 Streetsmart Condo Buying Tips for Canadians by Douglas Gray
There are numerous types of condominium formats for residential, recreational, resort and commercial purposes. Here is an overview of the most common options.
Residential condominiums can be found in either a metropolitan or suburban setting.
In a metropolitan setting the most common formats are:
• A modern high-rise apartment building.
• A new three-to-five-storey mid-rise building.
• A converted older building that formerly consisted of rental apartments.
• A building where the street-level floor is owned jointly by the condominium corporation members (the unit owners) and which is rented out to retailers to help offset the common maintenance fees of the residential condominiums in the rest of the building.
• Same format as the previous example, except that the retail spaces are sold as condominiums.
Suburban condominiums are most often found in the form of:
• Cluster housing consisting of multi-unit structures, using housing of two to four units apiece, each with its own private entranceway.
• Townhouse-type single-family homes distributed in rows.
• Garden apartments consisting of a group of apartment buildings surrounding a common green, frequently with each of the floors held by separate condominiums owners.
• A series of detached single-family homes in a subdivision format, all utilizing the same land and parking areas.
• Duplexes, triplexes or fourplexes
The suburban condominium format tends to make maximum use of the land while creating attractive views, private driveways and common recreational facilities such as swimming pools, tennis courts, saunas and playgrounds.
Recreational condominiums can take various forms, including mobile home parks where the “pad,” with utility hookups, is owned in fee by the individual owner, with a share in the common elements of the rest of the park. Alternatively, it could be in a leasehold format. Another option is to create bare land condominiums in rural, wilderness, or waterfront areas. In these examples, an owner could build a cabin with fee simple ownership of the land underneath and a partial interest in the common elements. The common elements could include a marina, beach, farm or forest. Common recreational facilities could include a playground or community centre, and assets could include boats or even farm animals.
The development in resort areas is extensive and condominiums are frequently built on lakeshores, sea coasts, island resorts or in ski country. There two main types of resort condominiums; those developed for warmer climates and those developed for winter climates.
The warmer-climate type is generally built around a common recreational facility that can be enjoyed through out the year by the owners. The buildings tend to range from high-rise apartments to cluster housing.
Winter resort areas tend to be built near popular ski resort development. Many tend to provide recreational facilities for the summer season as well, making it a year-round resort. The buildings tend to be in the form of cluster housing, modular housing, attached townhouses or bare land detached homes.
People who purchase a recreational or resort condominium tend to:
• Own it outright and use it throughout the year for lifestyle enjoyment.
• Own it outright and rent it when not in use.
• Own a portion of the condominium and use it for personal use and/or rentals, with the time available commensurate with the percentage equity ownership.
Ownership of a commercial or an industrial condominium is similar in concept to ownership of a residential one. There are various reasons why condominiums for commercial purposes are becoming more attractive to buyers.
Some of the benefits include:
• Tax advantages for an owner-occupier of his or her own business premises including depreciation, expense deductions for mortgage interest, etc.
• Placing a limit on monthly costs by carefully regulating costs through the condominium corporation policies.
• Avoiding rent increases.
• Shared contribution of costs for features such as maintenance, securing common facilities and advertising.
• Appreciation in value of the condominium over time.
• Right to participate in the decision-making relating to the condominium development.
• Opportunity to be assured of remaining in a unique location that is commercially attractive.
• Removal of the financial risk of owning an entire building.
• Providing an alternative if there is a lack of financial capability or desire to own the whole building.