Buying a condominium is a viable investment, especially since most condos are situated near important spots in the city like parks, malls, and offices. But while everyone agrees that condos are a great investment, the conversation shifts when it comes to buying the property.
One of the most important questions that you can ask about buying a condo in Cebu, Manila, or any other city in the Philippines is whether to invest in a pre-selling condo or a condo that is ready for occupancy. These are the two most popular options for condo buyers, and each one comes with its pros and cons.
This article will detail some of the key differences between the two types of condominiums.
Defining Pre-Selling and RFO Condos
Before we compare the two types of properties, it’s important to distinguish one from the other. Their definitions can immediately clue you in on the difference between them.
A pre-selling condo is a condo being sold before it is completed. Depending on the status of the construction, your future condo will be available within the next couple of years. Meanwhile, condos branded as ready for occupancy (RFO) have residential buildings that have already been built and turned over to their residents.
7 Key Differences Between Pre-Selling and RFO Condos
With a multi-faceted topic, it’s important to break down the conversation into seven sections to help you figure out the condo that is perfect for your specific situation.
Pre-selling condominiums have the biggest advantage in this aspect of the conversation. Since the condo is not completed yet, real estate companies can easily sell units at a more reasonable price. It wouldn’t be strange to see low introductory rates for condos still under construction.
Meanwhile, RFO units are the more expensive option since the building is already built. While the cost can vary from one condo to the next, the typical RFO condo costs at least 30% more than their pre-selling counterparts.
2. Construction status
RFO condos have the advantage in this category since the building construction has been fully completed. While specific amenities may be renovated at the wishes of the homeowners association (HOA), the units and the entire building are safe enough for you and your family to move into.
Pre-selling condos, on the other hand, may be in different stages of construction. It can take at least two years before you can move into your property.
3. Investment Price
When it comes to investments, pre-selling units have the edge. Depending on the developer, you can get discounts or customize your unit to your specific needs. The newer amenities that will come with your future condo will make it a worthwhile investment.
Some RFO condos will need a bit of work to give them the specific look you want. While you may have to spend a pretty penny on renovations, you can get it at a lower price if you purchase it on a rush sale.
4. Payment Terms
RFO condo units may seem to be on the backfoot here if you don’t have enough cash on hand. But while the payment period is usually shorter, you won’t have to worry about high interests in the long run. Moreover, rent-to-own units are increasingly becoming popular.
You can reserve your pre-selling condo with a down payment that can be stretched out within a couple of years. However, you can expect that this financial flexibility will come with interest rates attached to it.
5. Choice of Units
If you’re not willing to negotiate on how your condo looks, getting a pre-selling unit may be the better route to take. You have a myriad of unit choices, as the developers are still building your condo.
The opposite rings true for RFO units. You might find the spaces are either too small for your family or don’t suit your needs. You also wouldn’t be able to choose which building, floor, or wing your unit will be located in.
6. Property Management
RFO condos already have established property management units and policies in place. You can choose to get another RFO unit if the place you’re interested in doesn’t make enough of an investment in property management.
Meanwhile, you will have to pray hard that the property management policies for your pre-selling condo will be worth the money you’re investing. While you can weed out this problem by buying properties from trusted developers, it’s still a coin toss whether you get to live in a place with a favorable property management policy or not.
RFO condos once again win this round if you’re looking to enjoy your condo’s amenities immediately. Since the building is already built, you have a clear picture of what features are available for you and your family to use.
Pre-selling condos, on the other hand, are built on plans at least for now. You can only hope the amenities listed on the brochure that convinced you to buy would actually live up to the expectations you’ve pictured in your mind.
Talking from a purely financial standpoint, it’s better to purchase pre-selling units. The financial flexibility it offers your family is only one of the many perks that you can have out of owning such a condo. It’s also the better option if you’re not in a rush to live in a new home.
However, it’s understandable that not all people are amenable to pre-selling units. RFOs are perfect for families in immediate need of a place to call home, especially those that are located near important spaces like malls and offices.
Get Your Ideal Condo Today
Both pre-selling and RFO condos are viable real estate options. What makes one more advantageous than the other is up to your unique situation. Carefully consider which option suits your needs the most and choose the best property under that category.
If you feel like a pre-selling unit is in the cards for you, it’s best to consider a property by Mandani Bay. It is a beautiful property located in the middle of Cebu City. Build your lives in a stylish home while being near to the best the Queen City of the South has to offer.