Recent phenomenon: it is now possible, in Montreal and Quebec, to buy a condo in an RPA. Is it advantageous compared to renting?
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Of the 1,563 residences for the elderly (RPA) in Quebec, less than 5% offer condos for sale. But, according to several sources, they are selling like hot cakes.
Promoters of large RPA complexes in Quebec are following a clearly popular trend in the United States. “According to our market studies, it meets a demand,” explains Claude-André Mayrand, spokesperson for Groupe Sélection, some RPAs of which include condos, which represent less than 5% of the units of this banner. For its part, Groupe Maurice no longer sells condos.
THE BENEFITS OF BUYING
The main advantage of being an owner remains that of having an asset which normally increases in value over time. But it's not guaranteed... However, some people feel more comfortable investing in bricks and mortar than experiencing market volatility...
On the other hand, if you wish to sell, it is always possible to move into the same building to continue to benefit from the services, since most large RPAs have units available.
Some people feel better if they own their home. In most RPAs, they benefit from all the services and even dedicated elevators!
For many, owning a condo ultimately costs less than a single-family home and even than rent.
THE DISADVANTAGES OF BUYING
Unlike an annuity, the word “real estate” says it all: you lock in your money for a period of time where you get no return. You must therefore ensure your lifestyle through the return on your other assets (annuity, return or RRSP or RRIF withdrawals, TFSA, government annuities, etc.).
What happens if, for whatever reason, you have to sell your condo to recover financially? Will you get the price you are looking for? Currently, the market is in favor of buyers. But there is no guarantee that it will last. And selling entails multiple expenses and administrative pitfalls.
The real estate market experiences more or less long crises, where prices can stagnate and even fall. If you are selling in a crisis, how quickly will the return on your other assets compensate for your real estate loss, perceived or real?
In addition, owning a condo translates into condominium fees, unforeseen maintenance expenses (sometimes hefty and urgent) and administrative hassles. And some estate planning puts owners at a disadvantage. Also, if your cognitive abilities decrease, it will be those around you who will have to deal with the responsibilities of the co-ownership.