House and Lot vs Condominium, Which is the best investment?

Right off the bat, there is no right or wrong answer to this. House and Lot has pros and cons, Condominum have its own as well. It really depends on your own preferences and lifestyle. It may also depend on your life stage. You may want a condominium now then opt for a house and lot or the other way around. We will discuss some points which can help you decide for yourself which property would be perfect for you. We’ll compare the advantages of house & lot over condo and vice versa in six areas.

Investment Standpoint

Yes, real estate always appreciates. No doubt about that. Regardless if it’s house & lot or condo, your investment will invariably increase in value. But to how much increase, you have to consider other factors such as the demographics of your property. You have to understand the supply and demand. Is land becoming scarce in your locality? Is the development mainly in a certain area, and you can no longer invest in land there but instead in a condo?

And a very important consideration, should you decide to sell for a profit, would you be able to? Is it easy to re-sell or lease the property?

If yes, then look at the return. You have to compute for your Return On Investment (ROI) since you are investing purely for profit. So you would know how much you could sell your property for.

Generally speaking, a condo could generate more rental income than a house and lot with less maintenance expenses as well. But flipping it (meaning re-selling), you might find re-selling a house & lot much easier.

Taxes

For house and lot, you have to pay taxes for the improvement (the house) and the land. For condominiums, you have to pay taxes for your unit, any parking spaces you may also own, the common areas you share with other unit owners and the land on which your building stands on. Of course, the common area and the land tax will be pro-rated among the unit owners.

Monthly Dues

Homeowners typically pay for association dues, garbage pick-up, security and maintenance of the subdivision. For the condo unit owners, you will pay for basically the same fees plus maintenance of your building’s common areas.

In general, condo dues are more expensive per square meter (sqm) than house & lot association dues. But this does not automatically mean that condo monthly expenses are more costly as they might come out even at the end.

For example, Condo One’s monthly dues is P60 per sqm while Subdivision One’s monthly dues is P4.21 per sqm.

Condo: Monthly Due P60/sqm X 35 sqm unit area = P2,100.00

House & Lot in a Subdivision: Monthly Due P4.21/sqm X 500 sqm lot area = P2,105.00

As seen in above computation, they are almost even for the monthly dues.

Upkeep

Living in a condo can offer conveniences more than house & lot living. In a condo, they have property management including utility personnel. So if something went haywire in your unit, you just call the building administrator to have it fixed for you. In your home, you have to do it yourself or hire somebody. Maintenance is also handled by the condo property management. Keep in mind though, there are cost implications for this. Nothing is free folks! Decision making is also shared among the unit owners.

In your own home, you have to pay for everything from the maintenance, landscaping, etc, alone but decision making is all yours as well.

Lifespan

It is known that condominium buildings typically are good for 50 years. After that, the unit owners decide whether to repair or renovate the building or should it be so dilapidated, they can sell the land and divide the selling price among themselves. Again, decision making on this has to be made among the unit owners.

Living Expenses

Since condominiums are usually centrally located in high density areas where the development is, you can save on transportation expenses as your workplace, kids’ schools or malls might be right at your doorstep. You save on time and effort as well. Getting around is much easier as you don’t have to travel much. Utilities might be lesser as well as your place is smaller. Electricity consumption won’t be as much for a smaller unit.

As I stated at the beginning of this post, there is no correct answer whether a condo or a house & lot package is better than the other. You have to understand what your needs are and what property would be best suited for you. You might find that you like the modern lifestyle a condo can give you or you might want a more traditional route and invest in a house & lot package. Whatever you choose, we are here to help.

Visit our condo listings or house and contact us for more details. Cheers to your property investing!