Cheap condos for sale: your guide to buying condos on a budget — Condo.Capital (2023)

There are more housing options out there than ever before, from detached homes in the suburbs through to townhouses, condos, and an expansive rental market. Whether you've looking for a family home or an investment property, it's important to choose housing that offers you immediate savings and long-term growth potential. The recent growth of the condo market presents a number of opportunities to new buyers, with a growing range of affordable condos making it easier for people to get a foot onto the property ladder.

Buying property demands attention to lifestyle factors, with the location, amenities, and condition of your home having a direct impact on your quality of life and state of mind.

When choosing a condo, you also need to take a number of financial factors into consideration, including the asking price, growth potential, rental income yield, and condo fees. While everyone wants to buy a cheap condo and save money, it's important to be aware of long-term issues if you want to build real value that endures over time.

Along with the delicate balancing act between lifestyle and budget, it's also important to analyse your individual budget and create realistic goals based on accurate data and qualification ratios.

What is a budget condo to one buyer may be expensive to another, with your individual purchasing decisions always based on your unique needs and expectations. Let's take a detailed look at the condo market so that you can find an affordable option that meets the demands of your lifestyle and budget.

Why choose a condo?

A condo, also known as a condominium, is a form of property ownership rather than a type of dwelling. In a standard condo deal, someone purchases an individual unit along with the right to use the common areas and assets of the community. Unlike owning a house in the suburbs or a townhouse in the inner-city, condo owners do not own the exterior of the building or the surrounding land.

Condos always come with condo fees, which are given monthly to the condo board as a form of payment for building maintenance and amenities.

While this arrangement can seem limiting to some people, living in a condo does come with a number of advantages. The existence of condo fees means you don't have to do any maintenance yourself, with your responsibilities limited to the inside of your own unit.

There are also a number of lifestyle advantages associated with condos, including greater access to amenities, increased socialization, and the ability to live in a more central location. These lifestyle advantages have a number of financial flow-on benefits, with residents saving money on transportation costs, gym membership, and parking.

Perhaps more than anything else, however, the biggest advantage that condos have over houses is the cost. Condos are generally much cheaper to purchase than detached houses, especially if you take location into account. With so many young people struggling to enter the property market, condos represent a real opportunity for people to stop renting and enjoy the economic security that comes with property ownership.

Just how much money you save depends on many things, including the type of condo, it's location, the amenities available, and the age and size of the building.

Types of condos

Not all condos are created the same, with vast differences between projects and buildings. Generally speaking, there are three distinct classes of condos on the market, with certain types more popular in certain locations.

  • New or pre-construction condos are brand new buildings that have been developed for housing.

  • Renovation condos involve the redevelopment of old residential, commercial, and industrial buildings.

  • Resale condos include already constructed units that are bought and sold on the private market.

While resale condos can be an affordable option in some cities, older buildings often come with fewer amenities and higher maintenance fees. In contrast, new buildings are likely to have modern amenities, which can save you money down the track. Along with finding a budget condo, it's important to be aware of possible future costs and lifestyle considerations.

How to find affordable condos?

Most people want to save as much money as possible when they make a property purchase. As one of the biggest financial decisions you're ever likely to make, it's crucial to take your time, do your homework, and find a property that offers everything you want in an affordable package. The overall cost of a condo is dependent on many factors, including the location of the building, the number and type of amenities, the building age and size, and wider market trends on your city and area.

Some developers specialize in affordable condo projects, so it makes sense to reach out to these companies to ask about their existing and upcoming projects. If you're actively searching for a cheap condo, however, you should also develop a relationship with a specialist realtor with experience in this end of the market. While you can do a lot yourself through Internet searches and time on the ground, having an expert in your corner is the best way to learn about and compare multiple condos quickly and efficiently.


Location is always a key consideration when it comes to real estate deals, with two identical units in identical buildings likely to fetch very different prices based on location alone. If you're looking for a budget condo, it may be necessary to avoid certain neighbourhoods and even entire cities. While buying a condo can be a great way to afford a desirable inner-city location, the cheapest options will always be located away from the city centre.


Along with the location of the building, the inclusion of amenities plays an important role in the overall price. Generally speaking, more amenities will mean a higher price, especially in expensive urban markets where space comes at a premium. If you want to access a swimming pool, a gymnasium, or even a tennis court, you will have to pay. While condos are a great way to gain access to recreational and social amenities, budget condos are more likely to be basic and stripped back.

Exclusivity and luxury

While this factor is hard to quantify, it has a huge effect on the asking price of a condo unit. When a new condo project is in the early stages of development, the people involved will carry out detailed market research in order to target a specific demographic group. The price for a standard unit will often be set from the outset, based on the building's location and the average income of this target group. Exclusive and luxury features will have a huge impact on prices, so stay away from developers using these terms if you want a truly affordable option.

Building age and size

The age and size of the building will also have a very real effect on the asking price, especially in heated urban markets where there is a lot of competition. Generally speaking, larger buildings are cheaper over the long run due to lower condo fees and improved economies of scale. With more people in the building to pay for maintenance, the burden for each person will be smaller. The age of the building is also important, with older buildings often needing more maintenance and condo fees increased as a result.

Market trends

Economic and property market trends have a huge impact on property prices, so it makes sense to have a basic understanding of market data before you sign a contract. Just like everything else in our capitalist economy, prices are almost entirely dependent on supply and demand. Popular neighbourhoods are likely to be more expensive, with housing oversupply or market shrinkage likely to reduce prices.

If you're looking for a cheap condo, it's important to be aware of recent developments and oversupply issues in some cities. This can be a double edged sword, however, with excessive housing stock often meaning cheaper prices now but reduced growth in the years to come.

Rental income vs capital growth

Before you set a working budget or start looking for condo projects to compare, it's important to set realistic goals based on your financial end-game and long-term goals. What is cheap to one person may be expensive to another, with your plans for a condo likely to totally change your perspective. There are two main ways to make money from real estate: short-term gains through rental income, and long-term gains through capital growth.

Even if you're just thinking about creating a nice home for your family, it's important to be aware of these issues and how they will influence your purchase decision. Property is a unique type of purchase in that the vast majority of people need to borrow the vast majority of money for the deal. While your initial deposit and budget are obviously very important, it's also important to leverage your budget against short-term income generation and long-term capital growth.

Generating rental income

Having the ability to generate rental income is a major benefit of property ownership. Even if you plan to use your condo primarily as a home, it's always good knowing that you can rent it out if your situation changes. The amount of money you can make through rental income is normally proportional to the purchase price, with average rents higher in more popular neighbourhoods and cities.

Long-term capital growth

Buying a condo is a great way to build capital over time and secure your financial future. While it's important to be aware of condo-specific issues such as oversupply and condo regulations, the ability to build equity should always be weighed against the initial purchase price. The budget option now may not make sense on a long-term basis, with potential buyers needing to look into supply and demand trends, construction figures, days on market, and any other data that will help them to ascertain real long-term value.

How much can you afford?

Once you have a good idea of what you're looking for, it's time to get out the calculator and create a working budget. While this can be a lengthy process, you can get a pretty good idea of what you can afford with just a few calculations.

  • First, you need to save for a deposit, which can be anywhere between 3.5 percent and 20 percent.

  • Next, you need to work out a monthly budget by analysing your income and expenses in relation to standard qualification ratios.

  • Then, you need to check appropriate mortgage credits and benefits to see if they apply to you.

  • Finally, you need to balance this data with your lifestyle preferences to create a short list of condos and find your new home.


Every new home starts with a deposit, with down payment amounts varying widely based on your lender and financial status. While a 20 percent deposit is still seen as standard for most conventional home loans, Federal Housing Administration (FHA) loans and other forms of non-conventional mortgages are often available for much less. There are also strict qualifications when it comes to condos loans, with the Homeowners Association (HOA) also needing to be approved by the lender.

Non-conventional loans

FHA loans and other non-conventional mortgages are available to people who want to buy a condo property. A non-conventional loan requires a relatively small deposit of 3.5 percent to 10 percent, with mortgage insurance needed as a form of risk management. FHA loans are only available to first time home buyers and are unavailable to property investors. While these loans can be a great way to own property sooner, the inclusion of mortgage insurance generally makes them more expensive when viewed on a long-term basis.

Qualification ratios

Before applying for a mortgage, it's important to be aware of the qualification ratios used by lenders when they're assessing your application. If you can take a step back and see your application through their eyes, you will save yourself a lot of time and frustration. The qualification ratios set by banks are based on the relationship between your income and expenses, not now, but with the assumption that you are a property owner.

  • Your monthly mortgage payments should not exceed 28 percent of your gross monthly income.

  • Your total housing payments (property taxes, insurance etc) should not exceed 32 percent of your gross monthly income.

  • Your total debt payments (housing payments, credit cards etc) should not exceed 40 percent of your gross monthly income.

Along with looking at these qualification ratios, banks and other lenders are also likely to analyse your employment history, credit score, credit history, expenses, equity, and assets. While every lender operates by different rules, the fundamental principles are always the same. In order to minimise their risk, they are only willing to lend money to people who will be able to make their mortgage payments each and every month while also meeting their living expenses.

Condo fees

Condo fees should play a crucial role when you're comparing condos, with these monthly fees likely to represent your biggest expense apart from the mortgage itself. Also known as maintenance fees, these fees are payable to the HOA in exchange for regular building maintenance and expenses.

Condo fees vary widely depending on the type and number of amenities, the existence of staff, the age and size of the building, the construction quality of the building, and many other variables.

While some condo fees will just cover basic maintenance, others will cover specific utilities such as TV and Internet, large-scale repairs and renovations, and parking. All buildings should have a contingency fund to cover natural disasters and other unexpected expenses, with condo fees helping to keep this fund in good health. Along with comparing current fees and fee structures, it's also important to check the regularity and amount of historical fee increases and talk to the board about forecast fee hikes.

Additional expenses

When you own a condo, or indeed any property, you are subject to a range of additional expenses that you simply don't have to deal with as a tenant. From property taxes and mortgage insurance through to repair bills and legal fees, it's important to do your homework so you can budget for these costs. Closing time can be particularly expensive, with new condo owners needing to pay their lawyer, appraiser, inspector, and movers along with their deposit.

First home buyer credits

If you're buying a condo as a first home buyer in the United States, you may be able to access tax benefits, federal and state grants, and other support options. For example, while the First-time Home Buyer Credit program is now expired, some incentives are still available on a state and local level. Size Up programs may also be available in your state, with every first home buyer in the US also able to take out $10,000 from their traditional or Roth IRA.

In addition, there are also a number of specialist support programs, including programs from the US Department of Agriculture, options from the Department of Veterans Affairs, and Section 184 loans for Native Americans. If you're not a first home buyer, you can still benefit from home mortgage interest deduction, loan origination fees deduction, and property tax deduction.

First home buyers in Canada can also access a number of support programs, including the $5000 First-Time Home Buyers' (FTHB) tax credit, the Home Buyers Plan (HBP) that allows people to borrow up to $25,000 from their super, and the GST/HST Housing Rebate. In addition, a new homebuyer incentive program has just been introduced, with the Canadian Mortgage Housing Corporation (CMHC) able to contribute up to 10 percent to the cost of a new home.

Making compromises

Are you prepared to sacrifice your lifestyle for a cheaper property? Do you want access to amenities? Do you know that a cheaper mortgage normally comes with a longer commute time? Buying an affordable property is part art and part science, with compromises needing to be made at some point. While you can create a detailed list of your needs and expectations from a condo, only the most expensive condos are likely to tick all the boxes.

In a real world scenario, you will need to decide between a few options based on your working budget and long-term goals.

How to compare condos?

If you're in the market for a budget condo, you need the skills to compare multiple condos before making a purchase. While there are lots of things to consider, most of the key factors that influence price will fall into the following categories. If you don't have the knowledge to perform this analysis yourself, it may be a good idea to use a professional. Whether it's a specialist realtor, a property appraiser, or a home inspector, there are lots of people available to help you make the right decision.

Location and lifestyle

The location of a condo has the biggest single effect on the price. Budget options are unlikely to be in trendy inner-city neighbourhoods, and are more likely to require a longer commute time. While you can get lucky and buy a cheaper condo just a few suburbs away from the action, this will depend on what's available from specific developers. In many ways, buying an affordable condo is about making a trade-off between location and price.

It's important to remember that a location is more than a postcode, it also has a direct effect on your quality of life. For example, cheaper condos away from the city centre mean less access to cafes and restaurants, longer commute times, and potentially dangerous living environments after dark.

While each city and neighbourhood is unique, it's always important to weight up any potential effects on your lifestyle. If you do want a cheaper condo close to the centre, there may be options if you're prepared to compromise on the size of the unit or the number of amenities available.

Fees and amenities

Along with a trade-off between location and price, there is also a trade-off between condo fees and amenities. Are you prepared to pay more for access to modern amenities? How much more? This is an important consideration for all new condo buyers, with amenities improving your quality of life but condo fees restricting your lifestyle options. While ever the cheapest condos come with fees, they amount you pay can differ widely.

It's important to think about whether or not you're likely to use the amenities, and compare them to other options such as a gym membership or pool pass. People have very different needs from a condo community, with many buildings catering to a specific demographic. For example, lots of trendy inner-city condos cater to professionals and young couples, with other buildings catering to families or retirees. The amenities included will often reflect the age and income bracket of your potential neighbours.

Purchase price and value growth

Last but not least, the purchase price of a condo needs to be analysed in relation to property price growth and supply and demand trends in the local area. Whenever you buy property, you are also making an investment in a particular neighbourhood and city, so it's important to do your homework. While you want to buy somewhere that's popular, it's important to avoid overpriced condos and neighbourhoods with oversupply issues.

While overpriced condos don't have as much room to grow, price is often a reflection of demand. A specialist realtor can help you to compare multiple communities in a range of locations, with property growth charts also helping you to see growth patterns on a monthly, quarterly, and annual basis. On the other side of the coin, while too many condos in the same neighborhood can bring the price down, it can also reduce future demand and put a limit on growth potential.

Buying a cheap condo is a complex decision, with lots of factors to consider before you make a deal. Along with deciding what type of condo you want to purchase, it's also important to research locations, amenities, and market trends throughout your city of choice. How you plan on using your condo will also affect your decision, with owner-occupiers, landlords, and property investors all operating from a different angle. Once you know exactly how much you can afford, you need to compare multiple condos while being prepared to make compromises to find the deal of your dreams.

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