Are you considering a real estate investment in Calgary? Before you purchase a condo, it’s crucial to explore the liabilities that come with your purchase and why they may not align with your investment goals.


Buying a condo in Calgary may seem like a lucrative investment, but weighing the associated liabilities and recognizing your potential risk is important.Should you purchase a condominium in Calgary Whether you’re contemplating a move into an apartment or considering it as an investment property, assessing how these liabilities could result in increased long-term costs is important. 

Investing in Calgary apartments poses challenges due to poor construction, financial planning, and special assessment that could lead to potential losses and higher maintenance costs in the long run. 

Now, this may seem like an unpopular opinion. Still, we want you to be educated on the liabilities of purchasing an apartment so that you can make an educated decision that aligns with your goals.

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What is a condominium?

A condo, short for condominium, isn't just a space within four walls. It's a slice of a larger entity, a unit in a building where you're the sole owner, yet you're part of a community. Imagine owning your apartment, but also sharing ownership of the building's gym, pool, and garden with your neighbors.

Why opt for condo life? It’s a mixed bag of compelling reasons. For starters, the hassle of maintenance like lawn care or snow shoveling? That's taken care of by the condo association. Then, there's the lure of amenities - a private gym, a relaxing pool, and communal spaces for parties, all without stepping outside your building. Plus, condos often sit in the heart of the city or in buzzing neighborhoods, placing you a stone's throw from cafes, shops, and the vibrant city pulse. It's a lifestyle choice that blends convenience with community.

How the History of Condos in Calgary Impacts Your Investment

In 2014, downtown Calgary started to look like a ghost town after oil prices fell 53% below peak levels. This was around the same time construction began on 17,000 housing units—including 6700 apartment-style condos, with 13,000 more housing units starting the following year.

As the oil prices dropped, people were forced to sell their homes or try to rent them while inventory doubled and prices dropped. This housing crisis left new and old buildings sitting empty and rent prices dropping for seven years.

People who purchased a home in 2014 likely lost money until 2021. This history helps us understand how housing investments have lost people money over the last decade, but why are people still losing money on their apartments today?

How Poor Apartment Construction and Poor Financial Planning Costs Investors More Money

Poor apartment construction and poor financial planning can cost investors more money. One thing to consider is how special assessments can have a major impact.

A special assessment is typically a monthly portion of the monthly condo fees that goes toward the association’s reserve. These funds are used for larger expenses like paving, reroofing, replacing water heaters, and more. If the association’s fund is depleted when a big project
comes up, the homeowners in the building will need to pay a special assessment —this can range from $1,000 to over $50,000. Sometimes, the assessments are added to the monthly condo fees, or they can be a one-time charge that must be paid as a lump sum.

Special assessments don’t often pose too much risk in condo buildings under good management because the community should have enough cash in their reserve to cover emergency repairs.

Issues around special assessment often arise when a building is rushed or made with poor- quality supplies. In these cases, associations will often sue a builder or developer, but this process can take years, and in the meantime, the homeowners are expected to fund the repairs.

One way to combat some of these liabilities is to look into condo insurance policies that cover special assessment dues. That being said, it’s important that you feel entirely comfortable with the condo’s financials, the insurance you have, and the liabilities that you’ll be taking on.

You wouldn’t want unexpected fees to make you regret your condo purchase.

Understanding Condo Fees: A Deeper Dive

Condo fees, a term that might seem straightforward, actually encompass a diverse range of responsibilities and services. Think of these fees as your contribution to the collective living experience in a condominium.

  1. The Essence of Condo Fees: At their core, these fees are about pooling resources for the greater good of the condo community. They ensure that common areas are not just maintained but are inviting and functional spaces for all residents.

  2. Breaking Down the Costs: What exactly does your money go towards? A significant part of it is allocated to the upkeep of shared amenities - imagine sparkling pools, well-equipped gyms, and cozy communal lounges. Then, there’s the less glamorous but essential maintenance: think roof repairs during a surprise Calgary snowstorm or fixing that flickering light in the hallway.

  3. Beyond the Obvious: It’s not just about maintenance and aesthetics. These fees often contribute to the broader needs of the building, like insurance and sometimes even utilities, creating a cushion for the unforeseen and the mundane alike.

  4. Reserve Funds - A Future Perspective: Part of your fee is tucked away for future needs, an emergency fund for the building, ensuring that when the unexpected happens, the community is prepared, financially at least.

  5. The Calgary Context: Now, let's talk numbers. In Calgary, the landscape of condo fees is as varied as the city itself. You might find yourself paying anywhere from $300 to $600 monthly, but this range is just a starting point. The actual figure hinges on a plethora of factors: the location, the luxury level of your amenities, and the age of the building, to name a few.

Understanding condo fees is about peeling back the layers to uncover not just the costs but the value they bring to your condo living experience. It’s essential to delve into what these fees cover and how they fit into your budget as you embark on your condo journey in Calgary.

Consider This Before Buying a Condo in Calgary

As of the beginning of December 2023, we’re seeing a low inventory, but we’re also starting to see rates peak, bond leads coming down, and inflation. Theoretically, consumers are going to be able to afford more soon. We also have dozens of communities being constructed right now, which could also increase the inventory—negatively impacting resale.

When investing in real estate, it’s important to consider how your investment will grow and make your money in the long run. If you buy a condo today, you may be disappointed and watch your investment fall over the years.

Post-Tensioned Cables: What Are They, And What Do I Need to Know About Them?

The benefits of these cables are that they allow for longer spans with no pillars—which helps create more open floor plans and more space for windows. The problem is that these cables can corrode and are starting to cost condos more and more money to repair and replace. Many buildings with post-tension cables are now on a monitoring schedule to ensure that any issues that arise are taken care of, but this has raised costs for condo corporations and individuals who now have to pay for these repairs.

Two significant cons of these cables are that condos with post-tension cables often have higher condo fees, and many lenders do not want to lend to properties that have post-tension cables. It’s important to know if your condo uses post-tension cables because it could lower the number of buyers in the future, and the price of your condo could suffer.

How Much Are Condo Fees in Calgary?

In Calgary, condo fees weave a diverse narrative. They can range from modest amounts (especially seen in new buildings) around $200 to substantially higher for $1,000+ (luxury) typically  you'll see condo fees falling between $300 to $700 per month. These figures are influenced by factors like the building's location, age, and the array of amenities offered. It's a crucial financial factor for buyers to consider, ensuring their budget aligns with their lifestyle aspirations.

Condo Insurance Essentials

Navigating condo insurance in Calgary is a journey into safeguarding your future home. Unlike standard home insurance, condo insurance melds personal property protection with specific coverage for aspects unique to condo living. It’s about protecting your personal space and belongings while also contributing to the collective safety net of the entire building.

Understanding Building Insurance for Condos

Building insurance for condos primarily covers the external structure and common areas. This includes the building's exterior, hallways, elevators, and shared facilities like pools or gyms. It's typically managed by the condo association and funded through your condo fees.

However, this insurance doesn't extend to the interior of your unit or personal belongings. It's crucial to understand what the building policy covers, such as damage from natural disasters or structural repairs, to ensure seamless coordination with your personal insurance.

Personal Condo Insurance: What You Need to Know

Personal condo insurance in Calgary is designed to fill in where building insurance leaves off. This type of insurance covers everything within your condo unit, including furniture, electronics, and personal items. It also provides liability coverage in case someone is injured within your unit. Additionally, it can cover improvements or customizations you've made to your condo. Understanding the nuances of your personal condo policy, such as coverage limits and deductibles, is vital in ensuring you're fully protected.

Key coverages include personal property, liability, and often a portion of the building itself. It's essential

Additional Insurance Options for Condo Owners

Loss Assessment Coverage

Loss assessment coverage is vital for protecting against unexpected expenses. If the condo association faces a significant repair bill that exceeds the building's insurance coverage, this type of insurance can help cover your share of the costs. It's particularly important in scenarios where a major incident, like severe weather damage, impacts the entire building.

Water Damage Protection

Given Calgary's varied climate, protection against water damage is crucial. This insurance covers damage caused by issues like burst pipes within your unit or from neighboring units. It's an important consideration, especially in older buildings where plumbing might be more susceptible to issues.

Personal Umbrella Liability Insurance

For added liability protection, consider personal umbrella liability insurance. This goes beyond the standard liability coverage in a personal condo policy, offering additional protection in case of lawsuits or large claims for incidents that occur in your unit or involve your property.

Contents Insurance

While personal condo insurance typically includes coverage for belongings, contents insurance can provide a higher level of protection. It's particularly useful for high-value items like jewelry, art, or expensive electronics. This insurance ensures you're compensated for the full value of these items in case of theft or damage.

Questions to ask before purchasing a condominium

  1. Condition: What's the condition of the unit you're considering? Does the layout work with your needs? Can you make it what you want? 
  2. Common Areas: Are common areas well maintained? Is there pride in ownership in the building? 
  3. How many listings: How many condos are for sale? (A large percentage could be sign of problems.) Ask your Real Estate Partner Agent to check out how many active listings there are, find out how many have sold in recent months, and compare those stats with similar / neighboring buildings. 
  4. Owner Occupied: What percentage of the units are owner-occupied vs rented? A building with a high number of renters may result in more issues with neighbors, noise, etc. 
  5. Condo Fees: How much are the condominium / association fees and what do they cover? Not all condominiums fees are created equally, you'll pay more for bigger units (sq ft) and some fees will include various utilities and services, while others will not. This is a very important distinction for clients to look into and discuss with your REALTOR®
  6. Reserves: Does the condominium association have adequate reserves for emergencies and renovations? If not, you could face a special assessment in certain situations. 
  7. Board Temperament: What's the temperament of the condo board? Reviewing the board minutes could reveal controversies, issues, or poor management of a building. 
  8. Lawsuits: Are there pending lawsuits against the association or judgments you might have to help pay? Liens? 
  9. Insurance: What does the association's insurance cover? You may need supplemental insurance to protect upgrades, special assessments, etc. You will also need to obtain insurance for your contents, as well as insurance for liability (personal) 
  10. Debt: How much outstanding debt does the association have? Typically we recommend our buyers to obtain a professional condominium document review to ensure no details like major debts are missed. 
  11. Arrears: What percentage of the unit owners are in arrears on their dues? It would be quite the cause for concern if a lot of owners are behind in their dues. 
  12. Assessments: Does the condominium seller owe back fees or assessments? 
  13. Neighborhood: What's the neighborhood like? Ask your agent what their experience and thoughts on the community are, check out listings in other Calgary Communities Ask neighbors and walk the area at night and on weekends to check when residents are home and to obtain a feeling for the area. 
  14. Parking: Does the unit come with reserved parking? Titled Parking? If you purchase a unit at market value (or below) thinking you've done well, and come to find out that you have no parking, it will not only hurt your resale value, but will become a huge burden (depending on the area) in your life. 
  15. Guest Parking: Is there adequate additional parking for guests? Imagine having your friends or family over and they have to park 5 blocks away! 
  16. Storage: Will you have extra storage space for bikes, paddle boards and the like? Depending on the building, you could have titled or assigned storage spaces, or unfortunately none at all. 
  17. Management: Is the association managed by a qualified professional company? 
  18. Complaints: Does management handle owners' requests and complaints quickly? Do they have a good track record? 
  19. Rent: Some builders will attempt to limit rental units on new developments, a detail you should know whether you're buying to live there, or as an income property. 
  20. Restrictions: Will there be any restrictions that conflict with your plans? This could be anything from design / renovations, to patio use, front door color, and whether pets are allowed. 


Detailed Pros and Cons of Condo Living

Low Maintenance Responsibilities Unpredictable Condo Fees
Access to Amenities (Pools, Gyms, etc.) Noise from Neighbors
Prime Locations (Close to City Centers) Rules and Restrictions (Pets, Renovations, etc.)
Community Living and Social Opportunities Potential for Special Assessments
Enhanced Security Features Limited or No Private Outdoor Space
Professional Management of Property Possible Disputes with Condo Board or Neighbors
Potential for Rental Income Less Control Over Property Management
Lower Entry Price Compared to Houses Risk of Depreciation in Down Markets
Shared Costs for Building Upkeep and Insurance Constrained Living Space and Storage
Opportunity to Build Equity Changes in Community Dynamics

In Conclusion

When investing in real estate—whether for your home or as an investment property—there will always be liabilities you need to consider. It’s important to recognize how condos in Calgary come with more liabilities and to learn how these could impact you.

Before purchasing an apartment, we encourage you to consider the value in two years, five years, and ten years.


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