Is Buying a Condo in Calgary a Good Investment? (Or is a House a Better Investment?)

Homebuying 101 November 21, 2021

If it’s time to purchase your first home and you can’t decide between a house and a condo, we’ve got you covered!

You’re probably renting or moving out of your current home and looking for a lifestyle change. If you’re ready to enter the Calgary real estate market, congrats! Purchasing your first home and having a real estate asset is exciting and also requires time, money, and effort.

There’s a lot to consider when deciding what type of home is right for you and your family. That’s why we’ve written this blog post to help you decide if buying a condo in Calgary is a good investment or if a house is a better option.

Buying a Condo vs a House

When choosing between a condo and a single-family home, the decision hangs on understanding each type of property’s unique qualities. 

You need to evaluate which option best aligns with your lifestyle preferences, financial capacity, and long-term objectives.

To help you decide which type of property is right for you, let’s dive into some pros and cons of condos and houses.

Pros of Owning a Condo

The condominium lifestyle offers numerous benefits that make a condo investment attractive. From the convenience of maintenance-free living to access to premium amenities, several compelling reasons exist to explore a condo purchase.

  1. Lower Cost
    Purchasing a condo tends to be more affordable than buying a house. As a result, condo owners may pay a smaller down payment and lower monthly payments.
  2. Fewer Maintenance Responsibilities
    When it comes to maintenance and property upkeep, condo living offers a more hassle-free lifestyle. Maintenance is covered by condo fees that unit owners pay the condo association. From snow removal in the winter to lawn care in the summer, along with roof repairs and the maintenance of common areas, condo fees relieve you of these responsibilities, so you can enjoy the benefits of homeownership without the burden of exterior upkeep.
  3. Amenities
    Most condos have shared amenities. These may include shared spaces like parking garages or outdoor parking lots, gyms, tennis courts, or even pools for the whole condo community.
  4. Cheaper Insurance
    Since you only have to be concerned about the interior of your condo, you only need insurance for your specific condo (in a house, you will need insurance for the entire property).
  5. Extra Security
    Most Calgary condo buildings have security. For example, your security may include surveillance cameras, and you may be required to have a key fob that allows you to get to your floor.
  6. Location
    For those looking to live closer to downtown Calgary, there is a wider variety of condos than single-family homes to choose from. 
  7. Rental Potential
    If you’re looking to buy an investment property, there is rental potential with condos. Note that if you plan to rent your condo to a tenant, you’ll need rental property insurance coverage, which may carry a different cost than home insurance. 

Pros of Owning a House

On the other hand, living in a house may better suit the needs of you and your growing family. In Canada, 53.6% of individuals live in single-detached houses. Here are the advantages of living in a house:

  1. Convenience
    Owning a house can be more convenient than owning a condo. For example, if you drive, having a private garage or a parking pad is much more convenient than going downstairs or down elevators to your vehicle. If you are a pet owner, letting your dog into the backyard is much easier than walking them multiple times daily.
  2. You Own land
    Owning a house also means you own the land that the house is on. Land is a valuable asset that does not typically depreciate – meaning it can be a lucrative long-term investment. Also, when you own the land, you have flexibility in how it will be used. You can build a fire pit and enjoy having a fire on the weekend, or you can add a hot tub. You can design your backyard to meet your family’s needs and increase your enjoyment of your home.
  3. No Fees
    You may have to pay HOA fees in some communities, but many others have no community or association fees.
  4. Resale Opportunities
    Homes on private property are typically in higher demand and offer a higher resale value. This is because houses are entirely customizable, private, and convenient for owners.
  5. More Space
    In Calgary, on average, condos are 842-850 square feet, whereas the median square footage of a house is 1,504. This additional space gives you more room for a growing family and the option to customize your house with little to no restrictions.

Cons of Owning a Condo

While the convenience and amenities offered by condo living might sway you towards the condo market, it’s important to weigh the potential drawbacks that might impact your living experience.

  1. Proximity
    With neighbours right beside you and across the hall, you may feel as though you’re too close.
  2. Fewer Customization Options
    If you purchase your condo before the building is built, you may be able to customize your unit. But, there are common standards that each condo building has to adhere to. Moving walls is not common in condo buildings like in single-family homes which may limit your ability to customize your home the way you want.
  3. Pet Restrictions
    Though pets are becoming increasingly accepted in buildings, many Calgary condo buildings still have rules on the types, sizes, and breeds of pets allowed. Pets may also incur an additional fee, even if you own your condo.
  4. Condo Fees
    Condo fees may be frustrating as it may feel like you are paying for a service you don’t necessarily use. Unwanted expenses may creep up on you and may add to your monthly payments. (We will dive into these fees shortly!).
  5. Condo Bylaws
    Bylaws are often put into place, such as decoration restrictions, building maintenance standards, noise policies, parking rules, home occupancy limits and more, to try and improve each homeowner’s comfort
  6. Mortgage Qualifications Considerations
    Acquiring a mortgage for a condominium may be more complex than a house. Condo mortgage rates are higher due to the risk of lenders’ dependency on a condo board. With a mortgage on a house, the bank has more control over the property as a whole. Due to this, condo mortgages have interest rates that are ⅛-¼ more than a house.

Cons of Owning a House

Now that we know the downsides of condos, let’s look at the cons of owning a house. Analyze both sides fully to determine which option is best for you! Here are five reasons why owning a house may not be the best move for your lifestyle.

  1. Repairs
    Repairs that may need to be serviced to your interior or exterior environment are entirely up to you. Typically, if a pipe bursts in a condo, it’s in the hands of the building owner, but if a pipe bursts in your home, you will need to fix it or pay someone to fix it for you.
  2. Maintenance
    Regular maintenance is your responsibility. Examples include maintaining your yard, removing leaves or debris from downspouts, washing windows, changing the furnace filter and more. This personal upkeep is essential when owning a house, which is why some people enjoy living in condos and not having to worry about this maintenance.
  3. HOA fees
    Single-family homes may have Home Owners Association (HOA) fees that cover parks, greenery, or other neighbourhood costs. Although paying these in a house is less common, these fees depend entirely on the community.
  4. Price
    The cost of buying a house can be much more than a condo. In Calgary, the average price of a detached house is $719,877, whereas the average cost of a condo is $334,974.

Homeowner Costs That Are Often Overlooked

Becoming a homeowner means that you will have more expenses than you would as a renter. These fees range in price and are relatively similar between houses and condos. Although, there are still various fees that differentiate the annual costs that come with being a homeowner.

Costs to Own a House

Owning a house comes with some alternative costs than owning a condo. Here are the standard fees that come with owning a house:

  • Property taxes: This depends on your property value assessment and the residential rate.
  • Homeowner’s insurance: This is typically around $1,200-$1,600/year – this insurance can fluctuate depending on the location, your age and the risks.
  • Maintenance fees: These fees are personal but come at a cost for homeowners. You must cover all expenses if there is an issue within your house.
  • Mortgage payment: This payment depends on your credit history, home price, and many other factors.

Costs to Own a Condo

Owning a condo comes with fees you may not see when owning a house. Here are some of the most common costs associated with condos:

  • Monthly condominium fees: Typically $0.50-$1.00/sqft. These fees commonly cover part of your electricity and water fees, contribute to your reserve fund, and pay for maintenance or common areas within the building.
  • Property tax: This depends on your property value assessment and the residential rate.
  • Condo unit insurance: Typically $30-50/month. This basic insurance can fluctuate depending on location, age, and risks.
  • Mortgage payments: This depends on your record and your property’s price.

Get the House or Condo of Your Dreams with Shane Homes

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It’s decision-making time! Should I buy a condo in Calgary or rather buy a house? Hopefully, the difference between owning a house and a condo is clearer now.

Allow us to make your Calgary real estate investment experience positive and stress-free. If you’re beginning your house hunt, use our build and price tool to help you find the home of your dreams. With a variety of single-family homes, duplexes, townhomes and condominiums to choose from, we are sure to have a home you will love.

Start your home-building process with Shane Homes. Contact us today!

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