when purchasing a property, most buyer’s number one question is: how much are the mortgage payments? Buyer’s usually think that if they can afford the mortgage payments, then they must be able to afford the property.
Unfortunately, this is the furthest thing from the truth. Upkeep, especially on condos, can be as expensive, if not more expensive, than the property itself. For example, let’s take a look at the average property in Toronto.
In Toronto, the average property value is approximately $450,000. This property would produce the following upkeep fees if it is a free hold unit.
? Property taxes: 350/month
? Heating: 75/month
? Electricity: 100/month
? Cable and Internet: 120/month
? Phone Service: 60/month
? Repairs and Upgrades: 200/month
Total upkeep per month: $905
If you look at a condo, then you would also need to factor in condo fees and parking rental fees. These fees alone can be as much as an additional $1000 per month.
Keep in mind that as your property increases in value, so does your upkeep. All the upkeep items are aligned with values, so you should expect to pay more as your value goes up.
Unfortunately, just because you have the money to buy a property doesn’t mean that you should if you can’t afford the upkeep. Make sure that you calculate the upkeep as well as the mortgage payments before you decide to purchase a property.
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