If you are a first time condominium buyer in Metro Manila’s major cities such as Makati , Mandaluyong, Quezon City or Paranaque City , there will be a moment where you have to decide on wether to buy a condo at pre-selling stage or buy it ready for occupancy(RFO).
A ready-for-occupancy unit can be really tempting but as well as the benefits that you can get on a condo at pre-selling stage. a pre-construction condo or as a lot Filipinos consider as pre-selling condo is distinct in many ways compared to a ready-for-occupancy unit. They may be the same real estate but the benefits they offer differ variously. So as the effect on your planned condo rental business.
Lets start with the benefits of a Pre-selling condo unit.
It is true that pre-selling condos may take time to be realized. But if you know the many benefits of buying it aside from the lower prices, you might just be more patient until the unit is turned-over to you.
As a condo rental business entrepreneur in Manila, buying a property at pre-selling prices gives a lot of room for profit in the near future. Not only that having a new condominium unit can give you an added advantage in attracting new tenants, a newly opened condo rental unit can also command higher rental rates by the time you offer it to your prospective tenants. Here are some reasons why a buying a condo at pre-selling stage is an attractive option.
A pre-selling condo unit is a lot cheaper at this stage.
The main deciding factor in investing on a property is its purchase price. That is why if you can buy a property with a price that is 30% lower, then it should be a no brainer decision. And yes there might be a lot of other factors that you need to consider(and you should) before you actually purchase the unit, but having to avail a lower price which you might not enjoy you if you wait a little longer is a one sparkling opportunity that is hard to regret about. A Makati condominium with a price of a Quezon City Condominium is a good example.
Easy payment schemes and streched downpayment.
The downpayment is sometimes the hardest barrier that stops most people from buying their very first condominum unit. You may be able to afford the monthly amortization, but without savings for the downpayment, your desired finished condominium unit is still unlikely to be realized. During the pre-selling stage, most developers offers a stretched downpayment where the monthly payment for the downpayment is sometimes lower than the monthly amortization. With this very generous offer, you may be able to get hold of a unit right now, even without enough money for the downpayment. and that could mean that you are already protected from the future price increases and already take advantage of earnings on equity as the property appreciates on value.
You can still choose the best locations.
In real estate, location is the best factor that you can hold on to. That is also true specifically on a condominium property. Victoria de Makati for example. After the purchase, you can negotiate almost every other factor such the design of the unit but not the location of the unit and the location of the condominium building itself. At the pre-selling stage, you still have the luxury of choosing the best locations since the project is still fresh on the market and there is a lot of units available to choose from. Let’s say there are only few corner units with the best view and you can stil get it at an introductory price. Once all the corner units a sold-out, you now have a better command at the price if ever you decide to offer your unit for rent or resale. And if you decided to just live in it, it would be really nice to know that your condo had the best view, yet with the best price!
Prices tend to be higher when the unit is turned-over to you.
Real estate always goes up. Well, that might not be so true at some very seldom circumstances but real estate really goes up in value. In pre-selling prices, the value appreciation is even more faster until the unit is turned-over to you the unit owner. Early movers are being rewarded with equity earnings that can be derived from the accelerated value appreciation as the condominium property development proccess nears completion. Another thing is, as the the property develops, risk is also minimized from an intangible, planned, ”contract-to-sell” asset to a finished and tangile condominium property with amenities that you can really enjoy.
As an investor or a condo-for-rent businessman, purchasing a condo at pre-selling stage gives you an opportuniy to earn on real estate equity even if your condo unit is not yet turned over. For those who are not yet familiar with the word, real estate equity is the difference between what the property is worth and what the owner owes from the developer or most of the time, the financing institution for the said property, respectively.
House versus Condominium - Consideration in Investing
The affordability of condominium units came in the wake of the most recent economic crisis, which is one of the reasons why many homeowners include this type of housing among their home-buying choices.
Even top-knots celebrities are opting condominium unit as their home nowadays. Kris Aquino’s, kris TV episode about her new condominium home is an eye opener in condo living for new generations of Filipino families. Though her condo unit is exceptionally big and employed top-notched interior decorators to reflex her new image, one can simulate the way she organized things in the most fashionable way.
Most condo buildings are located in the heart of the city, and are often in close proximity to office buildings and other establishments offering high-paying jobs. As city dwellers, less time and gas money is spent in going to work; if the use of a car is necessary, there are fewer repairs and maintenance expenses incurred.
Condominium developments include classy facilities like state of the art fitness and gym centers, spas, beauty salons and barber shops, movie houses to some, fine dining or eat-in kitchens, and small boutique shops. The availability of these conveniences makes condominium living a comfortable option.
Condo living dispenses with the hassles of looking for somebody to fix something in your house. All you need to do is inform the concierge or building manager who takes care of housekeeping or maintenance problems, and he’ll get in touch with the building’s own pool of handymen.
Life in a condo is like somebody is always looking after your well being, by making sure you are satisfied with your living conditions. Of course, condo staff knows your money’s worth and make you feel like royalty. This alone suffices the monthly condominium association fees collected by the building administrator.
“To keep this in perspective, one developer claimed that condo acquisition and rental is the latest trend among OFWs investors”, either as their home while vacationing in the Philippines or rent-it-out in order to have a source of passive income even while still working abroad. If you are new in this business venture, you have nothing to worry-about ‘coz most condo building has their own property management team to look-after your investments.
But before considering buying real property, it is recommended to weight-in all the pros &cons yourself and to seek advice from a Real Estate Property consultant / unit owner on the target investment to help you in your decision making.