Vancouver Real Estate Blog

Depreciation Reports

One things bothering buyers of old apartments is the unknown. How much is it going to cost in future levies to fix up the building. No one is sure if the pipes might leak and need to be replaced, or if the building needs a renovation. When people buy a condo in an old building, there is some uncertainty in this regard. If the building maintenance fees are low, maybe the strata does not have enough money in the contingency fund. All a buyer’s realtor can do is read the strata minutes for the past two years, get Form B saying there is no levy in the short term future, hire a property inspector to inspect the condo, and make general estimates based on the age and look of the building. Even though this is all a realtor can do when representing the buyer, it is still not enough. But by January 1, 2014, all stratas will be required to have depreciation reports – reports of the state and condition of the building and its parts, what will need repairs and how much it is estimated to cost. Only then will these uncertainties disappear and buyers can have confidence they know what they are buying into.

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This picture is copied from the Globe and Mail. These statistics are for Canada as a whole, and not just Vancouver. Some of these predictions claim that real estate values will fall because rent is cheaper than ownership, or because salaries are not enough to pay for house prices. But people can usually afford to buy their home because they sold their old home and got their money from there, it is not just relying totally on your salary to finance a home purchase. Rental prices are different from the costs to buy a home for a reason,  because renters making minimum wage can only afford to pay so much rent per month, so rent prices have not increased beyond that point, while house prices have risen further.

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