Owning a condo unit in the Philippines is generally a good investment move. However, a potential investor should be equipped with the proper knowledge as well as the pros and cons before going into this real estate investment.
Pros in Buying A Condo in the Philippines
Condominium Act and How It Protects the Condo Unit Owners
The Condominium Act makes condo investment solid. It gives condo owners peace of mind as this legislation clearly outlines their rights and obligations. This Act also ensures fair outcomes for all parties in the event of certain circumstances. The investors can focus more on what they may gain as well as the benefits for investing in a condo.
Affordability
Compared to single-family homes, some condo units cost less. This will allow condo investor to save more as compared to buying a lot then building a structure on it. In addition, mortgage payment will also be paid faster. There will be more time to enjoy the rewards this real estate investment offers.
Low Maintenance Upkeep
For someone looking for a maintenance-free lifestyle, investing in a condo will work. A unit owner’s responsibility for the property upkeep is minimized as compared to owning a house and lot. Investing in a condo would mean the absence of a lot of responsibilities and expenses to maintain and ensure upkeep of a house. There will be no roof or gutter cleaning done periodically or repainting from time to time. Since the property is being managed by a developer, the responsibility of a condo unit owner is limited to the space inside the particular unit owned.
Comfort and Convenience
Living in a condo is synonymous to spending more time on rest and relaxation specially if one chooses to invest in an rfo condo for sale in Tagaytay. The condominium unit offers amenities that may not be found in a subdivision or other housing facilities. A condominium complex offers an inhouse fitness gym, pool, jogging path, bicycle path and a club house.
Good Location
Many condo unit investors choose the location of the property carefully. A good location offers accessibility to key institutions like schools, hospitals, places of worship, business centers, and transportation hubs. For those who plant to rent out their unit, condos located near these key institutions will likely to have more tenants. For some who plan to invest on condos located in tourist destinations as well as in places identified as key vacation spots will likely be profitable as Air BnB’s.
Security and Privacy
A good condo unit investment is one with security and privacy measures in place since most condominiums have enhanced security measures. Condo unit owners enjoy 24 hour security, CCTVs strategically located and well-guarded entry and exit points.
Green Lifestyle and Sustainable Features
One of the most impressive features of condominiums nowadays is the incorporation of green features such as gardens and pocket parks, foot paths as well as bike infrastructures for condo residents to enjoy a green lifestyle. As sustainability becomes a business catalyst in present times, most condominiums shift towards sustainability. Most developers come up with designs that promote active mobility and low-carbon-footprint lifestyle by coming up with projects with open spaces that welcome natural light and fresh breezy air. These features may be expected in an rfo condo for sale in Tagaytay.
Potential Increase in Property Value
A condominium complex located near transportation hubs and infrastructures has potential to increase in property value and may be deemed as good investment. In addition, when infrastructures nearby improve, the value of the condominium property also increases.
Cons in Buying A Condo in the Philippines
Additional Fees and Costs
All amenities of a condominium complex are shared by condo residents and these communal areas are needed for the upkeep and maintenance. Hence, condo management requires condo residents to pay homeowner association dues. These additional fees and costs should be taken into consideration when buying a condo. These additional costs continues to be paid even after full payment of the property and has to be factored in when investing in a condo.
Policies and Restrictions
The controlled environment that goes with living in a condominium complex is a deciding factor for many condo unit buyers. Some find policies and restrictions as very limiting specially to those who experience living in their own house and lot and are not used to living with neighbors in close proximity. However, others find it as a source of peace of mind since they prefer an environment where their neighbors will have to abide by the rules of the condominium complex. It is important to carefully study the rules to have a better understanding of the rights and limitations that is required of a potential owner.
Property Mismanagement or Negligence
It is important to investigate the track record of the condominium developer. There are some who are not able to maintain their services as the condominium complex gets older. Some developers shift their focus on new projects that they neglect their responsibilities towards the existing condo complex that are already getting old despite continuous payment of homeowner association dues. Hence, it is important to buy a condo from developers who are able to keep their promise of quality.
50-Year Lifespan of Condominium Complex
Republic Act No. 4726 or the Condominium Act of the Philippines does not clearly say that condominiums are only good for 50 years and would already be demolished thereafter. Although this is only half true, some potential buyers are held back for the fear of having their condominium units being demolished after 50 years. However, it should be understood that an existing condominium complex can only be dissolved due to several criteria which include more than 50 years of existence, outdated yet costly and unwillingness on the part of the majority of its stockholders to have the condo complex modernized, renovated, repaired or remodeled.
What One Needs to Know When Buying a Condo From an Investment Point of View
Real estate is considered as one of the most feasible investment options. It offers low-risk yet a high potential income-generating combination and is safer compared to other investments. Over time, the value of the real estate property increases, which consequently improves the investor’s buffer against inflation. It eventually gives the investor a bigger opportunity to gain passive income.
An investor who is able to make sound decision, properly align his actions with his personal as well as financial goals, and efficiently strategizes to maximize his profitability, his investment growth is not far behind.
For an investor to get the most value out of his purchase and eventually maximize his investment, he has to consider three important things:
LOCATION
A condo investor should be wise enough to choose a good location that will be accessible to key institutions within a developed area. If the objective is to buy a condo unit to be rent-out, a high-occupancy condominium complex in the business district or near universities would be a smart choice. However, if the objective is for short-term rentals where earning money thru AirBnB, then a condo complex located in key vacation spots is a likely choice.
DEVELOPER’S TRACK RECORD
A thorough research on the condominium complex developer should be done. An investigation on their past and current projects will be helpful as this will allow a potential investor to have an idea as to how they will approach their future projects. A wise investor would go for a developer with a clean track record rather than a developer with a history of neglecting its old properties.
PRICE AND RENTAL EARNINGS
Considering the price and rental yield, it is important to consider the budget that the investor can afford to minimize the risk of loss. Timing also plays an important role since purchasing a property has to be during the time when it is being offered in its lowest price. However, it is not enough to decide to buy something just because it is the cheapest option. As an investor, the rental yield potential should also be considered. Hence, price and rental earnings must be both taken into account.
End Note
A real estate investment is a low risk yet a high-yielding investment when done with thorough study and proper timing. A careful weighing of the pros and cons before buying a condo is important to arrive at a sound decision. The location, developer’s track record as well as price and rental earnings have to be taken into consideration to get the most out of one’s money and to maximize the investment.
