Financial Statements

What are Financial Statements?

Financial statements are formal records of the financial performance and position of a condominium corporation or investment property, typically reviewed by buyers, lenders, or investors.

Why Financial Statements Matters in Real Estate

In Canadian real estate, financial statements help assess the fiscal health of a condo corporation or income-generating property.

• Balance sheet (assets, liabilities, reserve fund)
• Income statement (revenue from fees vs. expenses)
• Annual budget and variances
• Auditor’s notes or financial disclosures

For condo buyers, strong financials suggest a well-managed building with adequate reserves. For investors, they provide a snapshot of rental income, operating costs, and profitability.

Understanding financial statements is critical for due diligence and long-term planning in property ownership.

Example of Financial Statements in Action

Before making an offer, the buyer’s agent requests the condo’s financial statements to ensure the reserve fund is sufficient for upcoming capital repairs.

Key Takeaways

• Reveal financial health of a property or condo
• Include income, expenses, assets, and reserves
• Required for condo sales and financing
• Help identify risk of special assessments
• Reviewed by buyers and lenders

Related Terms

• Reserve Fund
• Special Assessment
• Condo Fees
• Capital Expenditures
• Property Management