Before you start home shopping, there’s a lot to consider:
• Are you ready to buy? Are you prepared to maintain a property or do you prefer to have a landlord make repairs? Have you considered the additional home ownership costs (property taxes, utilities, insurance)?
• Do you have stable employment? If you’re new in a job, or only on a contract, you may want to wait until you have a more stable job situation. The reality is, if you have unstable employment, it may be more difficult to get a mortgage. Likewise, if you’re self-employed, do you have the savings necessary to cover home ownership costs in the event your self-employment encounters tough times.
• What type of housing do you want? - New vs. Resale: Besides the obvious differences in new construction homes versus resale, buyers need to know that GST applies to the purchase of a newly constructed home. New homes are usually covered by a warranty from one of Alberta’s seven new home warranty providers. On the other hand, GST does not apply to resale homes, but there is no new home warranty unless it is still covered from when it was first built.
Attached vs. Detached: Detached homes are typically more expensive than attached homes, but they also provide you with some physical space between your home and your closest neighbour. Detached homes won’t share any walls with a neighbour, and that likely makes them quieter.
Single-family vs. Condominium: This relates to the type of ownership, not the style of the home. Single-family homes do not have common property. As the owner, you own the entire structure plus the land it sits on. A condominium is a form of property ownership that includes the individual ownership of a unit and shared ownership of common property with other unit owners; the common property includes the land on which the condominiums sit.
• An owner of a traditional condominium does not own the land on which their home sits nor do they own the structure of their home.
• An owner of a bare land condominium owns the structure of their home, but not the land on which it sits; that land is common property.
Condominiums can be apartment-style, townhouse, attached, or detached. In a condominium, you pay a monthly fee to cover your share of expenses for the common property, and you have to follow the condominium’s rules (bylaws). When you own a condominium, the condominium board makes some decisions on behalf of all owners, such as maintenance, allowable exterior décor, and garden rules. Owning a condominium, though, also means the condominium corporation pays certain expenses, subject to the bylaws of the corporation (i.e. roofs, window replacements).
Single-family with revenue: A single family property with revenue potential is an option for a buyer who wants a single family home, but is concerned about costs. That revenue potential would most likely come from a basement suite. When considering such a property, keep in mind that you become a landlord, which means you will have to deal with finding tenants, additional property maintenance, and you will need to become familiar with relevant legislation (in Alberta it’s the Residential Tenancies Act). While such revenue can assist in the financial side of home ownership, it is not a decision you should take lightly. Remember also that different Alberta municipalities have varying rules surrounding suites, and just because you see a bedroom and a kitchen in the basement of a home, doesn’t mean you can legally rent it out .
