Are you in the market for a condo? Here are a few things to consider before taking the leap.
By Lynda C. Corpuz
Buying a house and lot seems like the ideal scenario. But with prohibitive prices or distant locations, it’s not for everyone. And to be sure, some people would rather live in a condominium. For a growing number of Filipinos—whether by force or by choice—their condo has now become their home sweet home.
If you’re looking for a condominium, you have to decide if you should buy a unit or just rent. Buying of course gives you a sense of ownership, as you own not just your condominium unit but your part of the common areas in the building. You’re in fact a co-owner of the condominium corporation itself.
Your condo unit can also appreciate in value, making it an investment especially if you sell it later on. It also gives you permanency of address, compared to a renter. It also reflects well on you when you apply for loans. Plus, there are no hassles and headaches in dealing with a landlord (or landlady for that matter) since you’re not a tenant but an owner.
Renting is okay also, especially if you plan to move in a few years. But if you rent for the rest of your life, you don’t build any equity in something you can call your own. In fact, the amount you pay for rent for, say, five years may already be equivalent to buying a condo outright. “Renting or buying, either way, it all depends on the person’s needs,” concludes Daniel De La Cruz, president of online condominium supermarket www.condo.com.ph.
Whether you buy or rent, you have to keep in mind some important factors before you sign that contract. Don’t get easily sold by what you see in brochures, model units, and 3D walk-throughs. Here are the seven top things you need to check:
1. Location, location, location. Nothing beats the right location, as it dictates both your lifestyle and your condo’s market value. It should be near your place of work and accessible to schools, hospitals, shopping malls, and major roads. Felipe and Cristina Salvosa share that their condo is very easy to get to and from work—a must factor for young professionals these days. JM Martinez, who lives and works in Makati, says, “As long as you live in a place accessible to your work, that would be the best benefit from this investment.”
2. The developer. Who’s behind the condominium project? Those who were burned in the late 90s know how painful an experience buying a condo during the pre-selling stage only to find out later the developer has run out of funds to complete the project! JM says the developer should be dependable and reputable, even if it means paying a price premium. “But more than the reputation of the company, we want to be assured that the company is an expert in the business and the structure was built with good materials,” he adds. So check the track record of the property developer.
3. Infrastructure and amenities. Ask about the infrastructure, utilities, power generators, security, soundproofing, even garbage disposal. What are the amenities and recreational facilities available? Is there a swimming pool, gym, playroom, function rooms, and garden? You don’t want to go down and get out every time you want to do something. You want to make the most out of your investment. If it’s a mixed-used development, scrutinize the entire master plan. Will there be offices, schools, cafés, restaurants, and shops in the community? Analyze the floor plan of the unit you’re eyeing. Examine if it’s the right size and space for your needs not just now but a down the road.
4. Density. Remember, you’re living in a high-rise building, sharing with hundreds or even thousands of other occupants a limited number of elevators, parking space, and amenities. Ask how many floors and how many units per floor there are. Consider the master plan of the developer for the entire vicinity, particularly for mixed-used developments. How many buildings will be put up and how many people are expected to live, work, shop, and dine in the entire complex? Where will these buildings be constructed? Your great view of the city skyline just might turn up later on as a view of a future adjacent building.
5. Dues and other costs. Condos can be notorious with exorbitant association dues, as you share the cost of repairs, maintenance, and improvements of the building with other dwellers. JM notes association fees are expensive but a tenant should maximize what he or she is paying for by using the facilities and coordinating with the administrator for any need, from repairs to what not. If you’re fortunate like the Salvosas, your association fees can also be very reasonable, in their case, about the same as with the dues for homeowners in private subdivisions. There are also related expenses like parking space, which you have to buy or rent separately. You’d be shocked at the cost, so plug this in your budget. And bet you overlooked the fact you have to pay value added tax (VAT) on top of the sale price, plus closing fees, and property tax.
6. Stage of development and completion date. You can of course buy a unit at an existing condo building and move in immediately. But like a brand new car, it always feels better to be the first owner of a condo unit. So if you decide to buy, do so at the pre-selling stage, not when it’s already complete. “Once the building is completed, the price can be double the original amount,” Cris says. JM shares they bought their unit at The Residences during the pre-selling stage at around P6 million, including interest and the cost of minor changes in the interiors. Consider also when the project will be completed, as you need to project your own plans against the target date.
7. Investment potential. JM shares they also considered if they could resell the condo in the future or rent it at good price. If you’re thinking of buying a condo as an investment, it is best to buy during the pre-selling stage and sell or rent out the condo when it is completed. The reputation of the developer and the resale record of its other condo projects should give you an idea if this one you’re considering has investment potential.