Buying a Condo in the Philippines?
Here’s an update/primer on a subject that’s always in demand here at PhilFAQS. Seems like almost everyone who comes here is looking to buy a place to live. In many ways, renting a home in the Philippines is going to be a better choice, but I’m not here to tell people what they want.
You want to buy, then by all means buy.
But do remember.
As a foreigner, you can’t own land in the Philippines, so one of the only ways you can have “your own place” is to buy a condominium. Also, over and above the methods of putting a roof over your head, you may find that owning a condominium can be a very good investment. (I am not an expert at any investment, your mileage may vary)
Buying a Condo
- 1 Buying a Condo
- 2 Why Should I Buy a Condo?
- 3 Advantages of a condo
- 4 Disadvantages of a condo
- 5 Condo Fees
- 6 Condo Board
- 7 Should I Buy a Resale Condo or a New Development?
- 8 Some Questions You Should Ask
- 9 Condo Buying Conclusions:
When you hear “condominium,” your first image may be of a luxury high-rise in a big city. Not necessarily right. A condominium is not a type of building, but a form of property ownership.
You can buy a condo within almost any type of residential structure. When you do, you purchase a “unit,” which consists of all the area within the finished walls of your space.
Location, location, location! The #1 rule in real estate holds true for condos, too. Location will be one of the biggest factors in determining your condo unit’s future resale value.
Why Should I Buy a Condo?
If you’re a first-time home buyer or looking to move to the Philippines, buying a condo may be an attractive option for you. Here are some of the advantages, disadvantages and other important issues to consider:
Advantages of a condo
Condos offer many advantages not typically found in other types of homes. For example, condos:
- May be less expensive than other types of homes
- Are accessible to more buyers in areas (cities, in particular) where property values are high
- Require less time for maintenance
- Usually provide increased security
- Often offer more recreational and social activities and amenities
- Offer all the benefits of property ownership, including potential return on investment
- May offer the same tax advantages as owning a conventional homes
Disadvantages of a condo
A condo investment may also have the following disadvantages:
- Lack of privacy
- High noise level
- The corporation’s right of entry to your unit if reasonable notice has been given or during emergencies
- Your fees may be allocated to them all instead of just to the one in which you live
- You become, in effect, an investor in the condo-owning company. Your unit’s future value is tied to the corporations expertise
Along with your mortgage and property tax payments, you are also responsible for condominium fees (usually paid monthly), which pay for:
- Maintenance and upkeep of the property
- Amenities such as a pool or health club
- Property management fees
- The condo corporation’s insurance policies
- Reserve fund contributions (this is the fund set aside for major repairs or renovations)
You and all the other fee-paying unit owners have access to common areas that may include recreational rooms, entrance ways, hallways, gardens and mechanical/electrical services.
This can have its downside. The owners usually vote on proposed changes to the common areas, and you may find yourself on the losing side.
The condo owners normally elect a board of directors to run the condominium project.
The board sets rules and regulations to help ensure the comfort and safety of all the owners.
The board also determines the level of responsibility owners will have for maintenance within their units.
It’s important that you review the condo rules and other governing documents before you purchase your unit.
Ask yourself if you can live with them.
If condo living sounds right for you, the next step is to consider whether to buy a new or resale condo.
Should I Buy a Resale Condo or a New Development?
Both new and resale condos offer pros and cons that you should consider before making a decision. The table below offers some of the key things you’ll want to keep in mind:
|Buying a New Condo|
|Buying a Resale Condo|
Some Questions You Should Ask
If you’re thinking about buying a condo, you can help protect yourself legally (always use a lawyer for real legal advice, don’t rely on me, please) and avoid surprises by asking the following questions:
- What does the corporation’s insurance cover? What coverage will I need to obtain? (Most times, you must obtain insurance for any losses or liability that occurs within your unit.)
- What are the restrictions regarding who or what may occupy the units (common restrictions include pets, satellite dishes, air conditioning units, etc.)?
- Is the building or complex registered as a condominium corporation? If not, when is registration anticipated? (If you are a foreigner, you may NOT buy from a non-registered company)
- How many units are rented vs. owner-occupied? (Rented units may not receive the same level of care.)
- Is parking included in the price? If not, how much extra will it be? How convenient is parking for visitors? (in many condo projects the parking may carry a substantial price. Remember, many Filipinos don’t own cars. In Manila, for example, a single parking slot may be equal to 25% of the condo price itself)
- What is the current balance of the reserve fund?
- What are the short-term and long-term plans for renovations and repairs?
- How much are the maintenance or common fees? What do they cover?
- What changes can I make to the unit? What restrictions must I stay within?
- What are the unit’s boundaries?
- What issues are being discussed at condo association meetings? May I review the meeting minutes?
- What are the rules and regulations regarding visitors, common area usage, etc.?
Condo Buying Conclusions:
There’s certainly a lot more one could say about buying a condo in the Philippines. I’m going to write some more articles, especially on the investment opportunities a Philippine condo may offer.
What do you want to know, specifically about buying a condo in the Philippines?