One thing that makes the Philippine real estate market different from others in Southeast Asia is the proliferation of Ready for Occupancy, known as RFO for short, units. These properties, usually in condo buildings, are exactly what they sound like. Units that are ready for tenants.
Ready for Occupancy units are popular with both end users and investors in markets such as Makati, the Bay Area and Quezon City. That’s because these are all key business districts where people want to live. This means end users can move in immediately, usually concurrently with starting a new job. For investors, they get a unit that can be rented out immediately allowing them to earn rental returns sooner.
Like all real estate purchases, there are pros and cons to buying a Ready for Occupancy unit in the Philippines. Here are just a few things you should consider.
The benefits of a Ready for Occupancy unit
1) No surprises
Since the Ready for Occupancy unit is completed, you already know exactly how it will look along with the building it is in. This is different from buying a pre-selling unit where sometimes the image you are sold is different from what the finished product looks like. Having real photos can also make it easier to rent out for investors.
2) No extra work
While this is not always the case, many developers have started selling Ready for Occupancy units that come fully furnished. This means you don’t have to worry about buying furniture and having it delivered. There is also no need to hire an interior design, helping you keep costs down.
Some developers offer homebuyers a chance to participate in a rent-to-own scheme where their monthly rent goes towards buying the unit after a set number of years. Also known as a lease contract with an option to buy, these programs can be beneficial to end users who don’t want to shell out a large down payment. It should be noted, if you choose not to buy the property at the end of the rental agreement, your rent is not returned.
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The downside of a Ready for Occupancy unit
1) More expensive
You will have to pay a premium when buying a Ready for Occupancy unit. That’s because the property has already increased in value since launching. When you buy property during the pre-selling period, you are usually getting it at the lowest possible price. And with the Philippine property market expected to continue its strong performance, waiting to make your buying decision may be costly.
2) Limited unit selection
When developers begin to sell Ready for Occupancy units, they are usually looking to offload the ones no one wanted. These can include units on lower floors or properties with less than stellar views. This isn’t always the case, but don’t expect to get the first choice. Those units are long gone.
Regardless of if you’re looking for a Ready for Occupancy unit or a pre-selling one, you can find it on Dot Property Philippines, the country’s largest property website.