Buying your first condo unit? Here’s a list of things you should consider before making that purchase
For most condominium unit buyers, price is definitely a major concern, but trust us when we say it should not be the only consideration to make. Based on extensive experience living in several condos for a number years—in Makati, Ortigas Center, Quezon City, and Bonifacio Global City—the following are seven considerations we believe buyers must make before purchasing a condo unit.
1. Location, Location, Location
When buying real estate, condo units included, a major factor to consider is location, location, and, well, location. This is because where a property is situated greatly affects, for one, the potential for price appreciation.
For instance, the Makati area being the business center of the Philippines has always proven to be a good investment area. Meanwhile, prices at neighboring Bonifacio Global City have also skyrocketed in the last few years.
An example of how beneficial a good location is how a friend once paid Php2.5 million for a condo located at McKinley Parkway inside Bonifacio Global City back in 2007. A year later, the going rate for that unit rose to Php3.5 million—a huge 40% price appreciation. Now in 2017, similar units are being sold for Php5 million, or at a whopping 100 percent price difference.
Location also determines how accessible it is to and from key places like work, school, commercial centers, and health facilities. Those who put great importance on their time and convenience are best advised buy a condo unit that has reasonably easy access to restaurants, schools, banks, or hospitals.
A condo we previously owned in Makati’s Buendia Avenue area is strategically located. With access to two restaurants, three fast food chains, and four convenience stores, going to and from those places on foot only took 10 minutes. The downside to being close to commercial places, however, was experiencing the constant traffic and noise typical of the area.
On the other hand, our new place at BGC is a bit quieter and less stressful, but also a little farther away from needed conveniences. The nearest fast food outlet is about six blocks away and going to the closest supermarket and retails center requires a five to ten minute drive.
2. Track Record and Reputation of the Developer
For condos still at the pre-selling stage, considering the reputation of its developer is important because it is an effective way to predict the quality of the finished property and indicative whether it will be turned over as scheduled. There have been cases of projects in the past that halted construction due to reasons like the developer running out of funding, which for their buyers meant not receiving the property they paid for and facing the possibility of not getting their money back on time or if at all.
On the other hand, for condos that are already ready for occupancy (RFO), the developer’s reputation can also help tell if they are committed to work with the homeowners’ association and be relied upon to help manage the property. This includes the adoption of effective security measures, strict implementation of condo rules, and proper maintenance of the building.
While condo units can be expensive, wait until it includes the price of a parking space. In our previously mentioned Makati condo, the corresponding 9-square-meter of parking slot cost between Php400,000 to Php500,000. That is right: around half a million pesos for one parking space. In Bonifacio Global City, some parking slots cost between Php600,000 and Php1.5 million each.
Buyers who you require a parking space, or at least can afford it, are encouraged to get one. Along with the condo unit, it appreciates in value and if not in use can be leased instead to generate additional income. If buying a parking space seems costly, those who need it may best renting one instead. Rental rates for a parking slot normally range between Php3,000 and Php10,000 per month.
There are a number of aspects of a condo that are shared among residents—elevators, swimming pools, playgrounds, gardens, and other common spaces and facilities. And add to this noise. When we had new neighbors move in at the unit one story up, their footsteps could be constantly heard for the first few weeks. In another instance, opening the windows meant being greeted sound of karaoke from the residents below. Then there was also time that weekends meant being woken up by the sound of a drilling machine in the unit next door.
While there are security guards, the homeowners’ association, and/or the building administration to raise such concerns to, having to do so every so often can be tiring, and there really is no way a condominium complex remains completely peaceful and quiet given its population and units’ close proximity to one another.
5. Population Density and Sharing of Amenities
Buyers should also consider the population density of the condo, or the number of units per floor, as this translates to the number of residents sharing the condo’s amenities. A condo may be expensive because of the amenities it offers. Some amenities now considered basic in newer developments include swimming pool, gym, children’s playground, function room, and the like.
It is important to assess whether the price paid corresponds to the value of the amenities, and if there is a good opportunity to make the most of each despite having to share it with a significant number of neighbors.
A good way to go about this is search for condos designed to only hold low number of units, which the developer likely markets as one of its selling points. Although unit prices might be higher here, it is the best option for buyers looking to live in a condo that is comparably not as crowded as developments with a huge number of small units.
6. Association Dues
Association dues represents the contribution made by unit owners to cover the shared costs of maintaining the common areas of the condominium, keeping the premises secure, and managing the property overall. These include but are not limited to electricity and water costs, wages of the condo security guards, janitors, and maintenance workers, and periodical maintenance of facilities like the swimming pool, among others.
The association dues are usually computed based a fixed amount multiplied by the floor area of a condo unit and corresponding parking slot. Monthly dues at our old Makati condo was Php50 per square meter, or Php2,000 per month, for the 40-square meter unit. In our current unit in Bonifacio Global City, it is Php80 per square meter, or Php3,200 per month, which also happens to be 40 square meters.
Association dues have to be taken into account when buying a condo, as it figures in future finances. Like credit cards, the penalty interest rate for late payment ranges from 1 to 4 percent per month, a hefty price to pay for late payments.
7. Rules and Regulations
Living in a condominium and sharing common areas mean being bound by rules and regulations that apply to all of the building’s residents and tenants. Examples of these include some condominiums that do not allow pets of all kinds. Another are condos that forbid altering certain sections of the residential units, such as the color of the wall, while others place a limit on the use of amenities like the swimming pool or basketball court.
Such rules and regulations should be considered before buying a condo, as it would affect how one lives in it. Knowing these bounds also helps in avoiding any issues with the neighbors and or property managers when already moved in, as well as help in deciding if the unit is indeed the ideal one to buy or if it is best to look elsewhere.
To reiterate, if you are looking to buy a condo unit, there is obviously more considerations to make than price alone. These must be taken into account so you won’t feel shortchanged or disappointed with your purchase, and actually get the most out of living in and/or owning it.
This article was contributed by PinoyMoneyTalk.com
Main image via Deposit Photos
|For further information regarding the process, requirements, prices, and fees associated with buying a condominium unit, as well as other related articles, visit The Complete Condo Buying Guide by Lamudi.|