Home ownership is one of the biggest milestones in life. It is a sanctuary and a place to call to your own. Home ownership isn't cheap however, there are maintenance and random fixes to be mindful of.
If you live in a condo, everything is very straight forward. A monthly maintenance cost is paid which includes the day to day costs to run the building, insurance, and even factors in future costs to replace the boiler/ elevator/ HVAC etc.
As for the house on the other hand, it is up to the homeowner to create a maintenance schedule. The roofs have a lifespan of about 20 years and putting up new ones are in the thousands. If you have a basement, be mindful of the foundation because during the rainy and snowy seasons, the basement could flood. A lot of these minor inconveniences to keep track of.
With a house and a condo, one seem to have fewer headaches than the other, but we won't know until we do a breakdown of the numbers.
Housing Costs Breakdown
I did a little research online on maintenance costs on houses, and some forums suggest that we should take 1% of the value of our house as our annual maintenance fee.
I did some further digging and I found an article by Romana King, she wrote an article on MoneySense titled The Ultimate Home Maintenance Guide, the article is more than a year old but I think the costs are still relevant here. The article takes a typical 2000 sq ft home and breaks down the costs into 6 areas: plumbing, outside structure, roof, foundation, electrical, and HVAC. It also suggests what the annual cost of each is and what the big item replacement costs are. To make my calculations a little easier, I took the average of her numbers and you can see my costs below:
For a better analysis, I broke down the numbers into dollars per square feet because condos and houses come in all shapes and sizes. To make sure I get an "apples to apples" comparison, I divided the costs by 2000 sq ft.
The annual cost items are the annual maintenance people should do for example: buying replacement light bulbs, shoveling the driveway, cleaning the debris from gutters, etc.
The big item costs are one time items people normally don't spend every year for example: the repaving of your driveway, mold testing, or replacing insulation, etc. To make my calculations easier, I also spread out the big item costs over 10 years since it is hard to figure out in which year I would actually spend on big-ticket item.
So in the above, if you are to own a house, it would cost you about $0.87 per square feet for the annual maintenance of the house and $0.27 for replacing big items. So in total expect to spend $1.14/ square feet a year.
The calculation might be a bit flawed because if your house is small at 1000 sq ft then the dollars per square feet will definitely be higher.
The link to the Moneysense article here, The Ultimate Home Maintenance Guide
Condo Costs Estimation
As for condo fees, at the moment, pre-construction condo are going for about $0.50/ sq ft a month in Toronto, and this comes to about $6.00/ sq ft a year. Condo fees are low for recently built developments. Over a twenty year span, condo fees jump at different rates depending on the management of the board, number of amenities, and how well future costs have been accounted for.
I have heard of condo fees reaching to about $600 on 450 sq ft for a twenty year old condo in Toronto, on an annual basis this is $16/ sq ft. For these fees, it includes a swimming pool, gym, and theatre room, 24 hr concierge to keep you safe, a property manager to look after the building, and other little perks that I probably forgot to include.
Do not be surprised if you have heard of condo fees reaching up to $1100/ month too. It is given when the older the structure, the more it would cost to keep up.
Condo Costs More But...
From this little exercise, the annual costs to support a home is about $1.14/ sq ft a year and the fees for a condo is about $6/ sq ft a year for a brand new condo.
This numbers surprised me a bit because this is a large difference. I know I am generalizing a lot of things here, a very old house will likely cost more than $1.14/ sq ft a year. Also mentioned before, the bigger the house the lower the costs per square feet.
In looking at condos, some people opt for it because of the lifestyle option, it is closer to transit, closer to work, and there is a sense of security when there is a concierge in the lobby. So for the house and condo debate, condos will lose on the cost end but people are giving up certain things by choosing a house.
Condo vs House, which one will you want to live in?