Whether you’re an empty-nester looking to downsize, a new family buying your first home, or an investor looking to capitalize on Victoria’s robust rental market, investing in apartments and condos in Victoria comes with a unique set of benefits—and challenges. As an experienced real estate advisor in Victoria and Cowichan Valley, I understand that purchasing an apartment or condo is a big decision. I’ve created this quick guide to help you make an informed decision about your next real estate investment.
Apartments vs. Condos—what’s the difference?
Typically, apartment buildings are owned by a single owner and the individual apartment units are rented or leased to tenants. On the other hand, Condos are individual units within a larger structure that are independently owned but managed by a homeowner’s association (HOA) or “strata.”
Pros of Apartment and Condo Investing
- Strata Maintenance: Being part of a strata means all condo owners in the building contribute monthly to a common fund for the regular property and building maintenance. Essentially, the building’s exterior, surrounding property, and communal areas are managed by the strata.
- Strata Amenities: Many condo buildings include additional amenities as perks of being in the strata. Examples of services may include access to an indoor pool, gym, rec room, or communal courtyard.
- Income Potential: With apartment ownership, the income generated from the rental of individual units can be used to pay the mortgage, insurance, and property taxes of the building. In some stratas, condos can also be rented out—allowing you to offset your monthly mortgage payments and earn a return on your investment more quickly.
- On-site Security: Many strata buildings also offer on-site security. Whether your condo is located within a gated community or there’s a security desk in the front lobby, on-site security provides peace of mind—particularly for older adults or families with small children.
Cons of Apartment and Condo Investing
- Strata fees: While there are benefits to being in a strata, they come with a cost. Strata fees in Victoria and Cowichan valley range from $0.25 to $0.70 per square foot, with most averaging around $0.40. This means a 1000 sq. ft. condo would average $400 per month in strata fees.
- Home Owner’s Association: As a member of the HOA or strata, you’re trusting the group to use the collective strata funds in a way that will most benefit the condo owners. Some condo owners can feel stifled by the rules and regulations of their HOA, as well as having little say in how their fees are spent or the condo complex is managed.
- Rental Restrictions: Investing in an apartment building allows you to control and manage each individual unit within the larger building. With condo ownership, you may not be permitted to rent out your unit. Some HOAs only allow a certain percentage of the building to be occupied by leaseholders, while some stratas may forbid it altogether.
- Slow Appreciation: Since you’re buying an interior space within a larger building, condos appreciate much slower than detached single-family homes. Since there’s no physical property attached to your condo, your investment would likely see slower returns than a traditional house on its own plot of land.
Are you interested in entering the apartment or condo market?
I understand the unique opportunities and challenges of apartment and condo investing. I work with clients to purchase and sell their condos, apartment buildings, and single-family homes in Victoria, Cowichan Valley, and the South Island’s Westshore communities. Whether you’re looking for a short-term investment, rental opportunity, or long-term source of recurring revenue, I’ll work with you to understand your goals for apartment or condo ownership. Reach out today for more information.