I held a downsizing seminar last week in cooperation with TD Canada Trust. I was joined by real estate lawyer Mark Arbique as well as mortgage specialist Matt Nesbitt and financial planner, Sylvia Manning. About a dozen seniors attended, and we heard the same concerns from virtually all of them.
They don’t have the nest egg they expected to have with the downturn in the stock market. If they move into a condo, they are concerned that condo fees will go up or that they’ll get hit with special assessments. The market is softening when it comes to selling their own home. And retirement homes are way beyond their budget. They’re worried about having enough money as they age.
One woman is bringing in a roomer to help offset costs of staying where she is, but she knows that’s only a stop gap measure. She’s in a two storey house and it’s becoming more than she can manage.
Another wonders how she and her husband can possibly find a condo that’s large enough for them within their price range. They want something that’s low maintenance but worry about condo fees. What are they to do?
We had some suggestions as we talked about these challenges. Yes, condo fees generally do go up from year to year, but condo options are not limited to downtown condo towers with lots of amenities.
Some very affordable detached and semi-detached condo bungalows are on the market, particularly in places like Orleans, and some are brand-new. (There are also condo row units in this category.)
In some cases, the condo corporations handle structural repairs to windows, foundations or roofs, or acombination of these, despite relatively low fees. In others, you’re responsible for the exterior elements of the condo as well as the interior, but the corporation handles snow removal and grounds maintenance.
The tax status certificate (obtained from the condo corporation) will tell you what the condo corporation sees as necessary repairs in the future and whether fees are likely to increase, which can help reduce surprises. Obviously, resale condos built in the 70s or 80s are probably going to need major repairs. Even ones built in the 90s will be hitting that point soon where things like roofs and windows are up for replacement.
But if you’re living in a house now, you likely have had to deal with such things already. The only difference with a condo is if it’s one where they are responsible for major structural elements, you can’t control the timing of when those repairs will be made. In the condos where those structural repairs are your responsibility, though, you can, and those are usually the ones where the condo fees aren’t likely to go up much over time since all they’re covering are common elements and things like snow removal.
Some of my clients are considering buying duplexes and renting out one side (or level) to tenants so that there is someone there to look after mail when they go south. Great idea, if you can find a good tenant, and often duplexes are priced lower than single detached homes. I’ve seen some really nice duplexes where the owners live on the main floor and rent out the second floor, which takes care of the issue around stairs for people who are ageing.
As for retirement homes, my father is in one in Aurora, north of Toronto, and gets everything, including meals, for around $ 1,600 per month, a lot less than the cost of similar services in Ottawa. So I recommend checking out other, smaller centres: they may be considerably less expensive.
The important thing is to know that there are options, and there are likely to be more hitting the market as more and more boomers hit retirement age.
As for the question of what you can afford in condo fees, later this week, I’ll post up a worksheet to help you answer that question.