Buying an RFO condo unit is not right for everyone. However, it may be good for you. If you aren’t familiar with RFO condos, these are ready-for-occupancy units that can be moved into immediately. This type of property is suitable for both end users and investors depending on your goals.
Before going this route, it is vital to understand the pros and cons of buying an RFO condo unit. Especially when comparing this method to purchasing via pre-selling. This isn’t a case of one being better than the other. Each is just different.
Today, we look at these differences by exploring the pros and cons of buying an RFO condo unit.
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Cons of buying an RFO condo unit
1) More expensive
RFO condo units are usually more expensive than pre-selling ones for a variety of reasons. For starters, developers prefer selling units during the launch phase and are willing to accept a smaller profit to do so. However, there is no motivation to do this once the project is move in ready.
There is also the fact that home prices are likely to have increased between the time pre-selling began and project completion. Capital appreciation is a natural part of the real estate cycle and even happens during construction.
2) Limited choices
In many cases, those buying an RFO unit will only have a limited number of condos to choose from. That’s because most were scooped up during the pre-selling phase. This group has first choice in terms of sizes and floors.
That being said, some developers are now setting aside blocks of RFO units to ensure this group has a variety of residences to pick from.
Pros of buying an RFO condo unit
1) Move-in today
This is the most obvious benefit of buying an RFO condo unit. Unlike pre-selling, where you must wait years before your property is finished, these are ready to go right away.
2) Know what you’re buying
Another benefit is that you have the ability to see the actual unit for sale as opposed to a sales gallery or CGIs. That physical element can provide you with added peace of mind when making such a huge financial decision. You will also gain a true sense of the size of the common areas and amenities to see if they are as good as advertised
3) Rent-to-own
Many developers selling RFO condo units offer rent-to-own payment schemes. This method allows a buyer to make a down payment prior to moving in and then complete monthly payments similar to paying rent. This “rent” is collected until the price of the property has been paid off.
During your search for a new home, it’s usually a good idea to look at both pre-selling condos and RFO units to get a better idea of what is best for your situation.
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