The aspiration of owning a dream house on a large property in a peaceful area of town has given rise to living in condominiums close to commercial centres and major hubs. Many would-be condo owners and buyers feel apprehended about condominiums, despite the fact that they offer independence and convenience.
Investing in new condo buildings as a source of passive income seems like a strong shift. Many people have a lot of concerns and doubts. One of the most common concerns is – What is the lifespan of a standard condominium building and on what the physical life span depends.
How Long Do Condos Last?
The majority of condo apartment buildings today have the design and construction made with advanced processes and durable materials to resist daily stress and strain.
Many people like modern condominiums even after 50 years as they stay in good shape.
When talking about the lifespan of condos from the real estate and land value point of view, it will continue to exist as a real-estate ownership option as long as buyers are willing to purchase them.
A condo unit will continue to be a feasible property ownership option as long as its monthly maintenance fees and realty taxes remain less than the monthly rental of an equivalent individual unit in another apartment building or condo complex.
There will be no desire to buy the apartment once the realty taxes and required maintenance costs exceed the cost of a comparable unit. Even if a condo building is more than 50 years old, it does not become obsolete or uneconomical if it passes building inspections and certifications.
The majority of today’s new condominium developments use cutting-edge technology and long-lasting materials to withstand the wear and strain of everyday use and therefore, maintenance fees will go on the lower side. Even after 50 years, modern condos are likely to be in good form.
Destruction would be unnecessary if the majority of residents consider the building structure is safe and sound. Thus, requiring occasional maintenance and some modern restorations.
Impact of the Life Span of Condo Building Parts on the Condo Buildings?
The elements that make up buildings compose a large number of different components. Those components will need to undergo repairing or replacement over time due to wear and tear.
After knowing the age of the condo building and each condo unit type and when certain components underwent fixtures and changes will help the unit owners anticipate when they will require maintenance and replacements.
Keep in mind that when buying a condo, the unit owner requires cyclical maintenance and repairs to the inside of the unit. The condo’s maintenance fees do not cover anything inside the condominium unit.
The appliances, heating, air conditioning, and electrical fixtures inside the condo unit must all be maintained and eventually replaced. All the replacement costs must be borne by the condo unit owner.
Glass façade of new buildings have become popular due to their aesthetic appeal.
However, construction professionals have long recognized that glass-walled structures are less energy efficient than stone and concrete buildings.
Indeed, when energy costs climb up, it will also increase monthly fees for heating and cooling glass towers.
Replacing entire walls of today’s glass walled structures could be essential as soon as 15 to 20 years after the condo is constructed. Needless to mention, it will cost a hefty amount too.
In other words, what now appears to be extremely inviting and tempting to condo buyers today may come back to bother them. More specifically the owners with necessary fiscal obligations.
Importance of Cyclic Repairs, Replacements & Maintenance
The condo building’s principal components should involve more frequent maintenance costs. Even the replacements should be on a cyclical basis in order for it to remain operational.
When a condominium building reaches the age of 40 to 50 years, it will have multiple, partial or total retrofits.
And this will be most likely in stages. Prudently managed buildings retain adequate amortization replacement funds.
This allows for the necessary accumulation of amortization funds over time to restore common elements without causing excessive economic difficulties.
In the not so distant future, prohibitive maintenance fees will result from more regular and recurring replacements of key common elements in older buildings.
In some circumstances, they will rise to the point that a majority of owners will be unable to afford them. Some financially weak unit owners or the ones facing severe financial hardships may have to close certain condominium buildings.
Every condo owner should have the information on the financial health of their condo complex. This is including its internal as well as external mechanical systems.
You cannot overstate the importance of good management and good governance. The belief that if you invest into a condo complex, others would take (excellent) care of its governance and property management is completely false.
Every condo owner should actively participate in the day-to-day operations of their condo complex and its major components. They must also closely monitor and contribute time as needed to all aspects of its operation.
What Happens When Condos Reach at the End of their Physical Life Span?
Most condominiums will not be demolished once they reach a particular age unless there are compelling economic factors relative to creating something else on the land.
The cladding, as well as the major mechanical components, of the condo buildings will be replaced at some point.
It is recommended that all communal areas be upgraded. The unit should have proper maintenance already carried out.
However, the owners may have to repair or replace parts such as windows and doors.
As more and more maintenance and repair problems occur, the value of such condos tends to diminish with time.
The majority of condominium corporations, however, will meet to make a decision. Many such unit owners will vote on what they want to do with the condo building and property. There are two options:
- They plan to sell the land and split the profits; or
- Make an agreement with the original developer or another developer to construct a new condominium on their property.
See Precondo for more information on new condo properties for sale.