To buy or to rent? That is the question.

The debate of buying vs. renting your home is never-ending with both sides full of valid points. One side says buying a home means security and good investment while the other camp says renting is the smarter move in the mobile times. The thing is, different lifestyles have different dwelling needs. There are several factors to consider such as your financial capacity, career trajectory, family considerations and location.

But what if we take location out of the equation, and place it, say, in Marikina where the place is both charming and urbane, the people are friendly, the history is dignified, and the opportunities are aplenty.

Let’s say a one-bedroom condominium in the distinguished Marquinton Residences is offered for rent at Php 15,000 a month while a one-bedroom condominium in the new Siena Towers is selling at Php 3.4 million with a 20% down payment and Php 24,000 per month amortization for the next 10 years at 9.5% annual interest. Which is the better choice – renting or buying?

Well, there’s no right or wrong answer. The right or wrong choice depends entirely on you, your needs and your plans. You will have to think long and hard when making this decision. To help you, here are some pros and cons of buying and renting.

What are the advantages of renting a condo?

Easy to Move In

Moving into a rented apartment is easy and affordable. For most, you will only need to pay one-month advance and two-month security deposit to move in.

Hassle Free to Move Out

Moving out is as easy when you have not signed 10 years of your life to a home loan. Don’t like the landlord? Move out. Neighbors are becoming annoying? Move out. Moving to Makati? Move out and look for a new condo in Makati.

However, note that your landlord might refuse to return your security deposit even without any damages or repairs incurred.

No Property Tax
As a tenant, you do not own the property. No property, no property tax.

What are the disadvantages of renting a condo?

Increasing Rents
Taxes, repair and association dues in the condo complex may be computed into your rent. Should these costs go up, your rent will increase as well. You have no control over rent increases unless otherwise specified in your lease contract.

Lease Deadline
Tenants have a monthly obligation to their landlords: rent payment. If you cannot pay rent on time because of an emergency, some landlords will understand and give you an extension. Some will not. For some landlords, non-payment of three months’ rent is a basis of eviction.

No Equity
If you have investment plans in the future, buying a condo is the way to go. Though a condo’s market value appreciates slower than a single-family home, a condo still has better investment potential than a rented apartment. Because as a tenant, you do not own the apartment so you cannot build equity. On the contrary, you are helping your landlord build equity.

What are the advantages of buying a condo?

Ownership
There is a sense of pride and security in owning a home. You can do with it as you please. You can paint your unit your violet; install constellation patterns in the ceiling; renovate the kitchen, or get an iguana pet. Most of all, no one will evict you for late rent payments. There is no landlord to answer to.

No Payment Hikes
Unlike in renting wherein you have no control of rent increases, buying a condo for sale gives you several payment options. You can pay through cash terms, or apply for a mortgage or home loan.

If you go the home loan route, your mortgage may have fixed or variable rates – depending on the bank policy, the property value and your financial capacity. For your convenience, your bank or developer will provide you a schedule of fees to guide your check releases.

Build Equity
A condominium unit is a long-term investment that will appreciate over time. Eventually, it will pay for itself and if you play your cards right, can make you money.

What are the disadvantages of buying a condo?

Huge Financial Responsibility
Owning a home costs a lot. Unless you have a truckload of cash to pay upfront, you will need to deal with a home loan that can tie you up for 25 years.

Aside from making sure you can afford the monthly amortization, you should also have a budget for the reservation fee, down payment, closing costs, bank fees, title fees, mortgage insurance, and others miscellaneous fees.

Once those are settled, remember the monthly homeowner’s association (HOA) dues and the annual property tax.

Cost of Selling
When you are ready to put your unit on the market, you might already picture the money going into your bank account. Reality check, selling a unit costs money too. First, you will need a real estate agent, which costs up to 7% percent of your unit price in commission. Then, you will need to merchandise your unit either through an open house or web listing, in which you will need to touch up the unit and fix the minor and major repairs. Lastly, there is the closing cost. Closing costs are expenses over and above the property price including capital gains taxes, business tax, and notary fees.

Maintenance
The least of a renter’s concern is the maintenance and repair of the unit. Condo owners, on the other hand, is responsible for all the repair and maintenance of the interior of their condo. You will have to buy and change that busted light bulb and call your plumber for that clogged toilet.

Buying or renting a condo is always a big financial decision. Your choice would depend on your priorities, plans, and finances. In the end, it is best to pick what suits your current needs and will make the most logical choice in five years. Federal Land, Inc. has several pre-selling and ready for occupancy condominium properties in Marikina City – the renowned Marquinton Residences; the Spanish-inspired Tropical Garden City; and the new urban playground Siena Towers – that will accommodate your various lifestyles, needs, and aspirations.

From the developer of the distinguished Marquinton Residences comes a radiant prime development at the heart of Marikina city – Siena Towers. A modern take on the Italian town of Siena, where rural charm and modern progress abound, Siena Towers goes beyond being a home by providing outstanding lifestyle choices just outside your doorstep.

Siena Towers is a two-tower condominium project offering a beautiful and secure preselling homes in a vibrant community with its own shopping mall a few steps away. Residents of Siena Towers will enjoy outstanding amenities; quaint homegrown retail selections; proximity to major weekend destinations; I.T. business parks; premier schools like the Marikina Science High School, Ateneo de Manila University, Miriam College, Center for Culinary Arts, and the University of the Philippines, Diliman; and spectacular views of the Sierra Madre in the East and the Metro Manila skyline in the Southwest.

At Siena Towers, live in an exciting lifestyle playground you can truly call your own.

Made up your mind? Email us at digital.mktg@federalland.ph to get your dream condo in Marikina City today.

Pros & Cons of Renting a Condo

After graduating college, I readily joined a corporation in a Makati. I wanted to learn and grow in the trade, surround myself with like-minded people and be in the center of the city.

Everything is dandy. The work is challenging but rewarding, the boss is nurturing, and my friends are caring. But after two years, I want to quit.

Why? Traffic.

For individuals like me building a career in a central business district, a commute in heavy traffic is a two-hour battlefield. I could work out and cook a proper meal in two hours; instead, I am stuck in traffic.

I am not giving up my job, so what should I do? Leave my darling mama and papa’s house and move closer to my workplace.

So I turned to the internet to start hunting for a new place. I saw a listing of a condominium unit for sale near my office. The asking price is PHP 3.5M, with a 20% down payment and PHP 19,000 amortization per month for 20 years at 5% annual interest. Scrolling down, I found another listing for a similar condo for rent at PHP 22,000 per month.

Should I buy or should I rent? Buying or renting property will be my first big financial decision. So I asked my friend who rents and another who bought for advice.

Daryl the Condo Renter

Daryl is a friend from college who now works as a Geometry teacher in Taguig. Like most teachers in his school, he is originally from Quezon City and rents in a nearby condominium tower. I asked him how he is living on his own in his rental.

I found out from Daryl that renting has its pros and cons. There are many pros like moving in. He only paid a one-month advance and two-month security deposit to move in.

Likewise, he said that moving out is as easy as moving in. Since Daryl is planning to take up a master’s degree in Manila in July, he can move out and look for another place as soon as he wants. However, he worries his landlord might refuse to return the security deposit even without any damages or repairs incurred, and might ask him to pay the balance rent for the remaining contract period.

As a tenant, he does not own the property, so he does not pay the taxes attached to owning the unit. No property, no property tax. Additional savings.

On the other hand, Daryl revealed that there are also hitches in renting. Taxes, repair, and monthly association dues are computed into his rent. However, should these costs go up or down, he has no control over annual rent increases.

Daryl has a monthly obligation to his landlord: lease payment. His landlord collected post-dated cheques in advance. Now he worries that if he had a massive emergency, he might have insufficient funds in his bank account and his check will bounce. What would happen? Some landlords may understand my situation and will give him an extension. Some landlords will not. For some, non-payment of three months’ rent is a basis of eviction.

Daryl also regrets that he cannot build equity. According to Investopedia, equity is the value of a property (such as a condominium unit) after all debts. As a tenant, he cannot build equity, as he does not own the property. He plans to buy a unit and settle down in two years’ time after he has played out all his travel ambitions.

Tina the Condo Owner

My other friend, Tina bought a condominium unit in Makati last year and is thrilled to share her experiences as a proud owner.

For Tina, the best thing about owning her home is doing whatever she pleases with it. She painted her walls pink, bought Hello Kitty pillows, and planted a pocket herbs garden. Furthermore, as an emergency room doctor, she has no time nor the energy to deal with a landlord.

Her mortgage has variable rates. Fortunately, the bank and developer provided her the schedule of fees that guides her check releases or bank deposits.

Tina also considers her condo unit as a long-term investment that will appreciate over time. She believes the real estate value appreciation in the country, especially in the business hubs like Makati, traditionally grows in time depending on market condition. Eventually, her property will pay for itself, and if she plays my cards right, she can make money through reselling or leasing.

Naturally, there are cons to her pros. Tina’s biggest obstacle is the high properties cost. Since she does not have a truckload of cash to pay up front, she first paid down payment then applied for a home loan application.

If the least of Daryl’s concern is the maintenance and repair of the unit, Tina, on the other hand, is responsible for all the repair and maintenance of the interior of her condo. Just yesterday, she bought and changed a busted light bulb in the closet and hired a plumber for a clogged toilet.

Tina plans to sell her unit and move in with her future husband when they get married. She used to daydream of the vacations her condo money could fund. However, when her neighbor sold her unit, Tina found out that reselling her property costs money too. First, there is a need for a real estate agent, which can require up to 6% percent of the unit price in commission. Then, she will need to touch up the unit and fix the minor and major repairs for photos and open house. Lastly, there is the closing cost. These are expenses over and above the property price including capital gains taxes, business tax, and notary fees.

Going through Daryl and Tina’s pros and cons in my mind, I decided to buy a condo ten-minutes away from the office. I believe the pros outweigh the cons of buying a condo. I want the feeling of pride and security of owning a home. I want the gym membership, pool access, 24/7 security and other amenities the condo provides. Most importantly, I want an investment that will eventually pay for itself and will certainly make me good money.

With Federal Land, owning your first condominium residence is easy through lease to own payment plans. Just contact a representative to inform us of your intent to buy, provide a Philippine government-issued ID (with your Tax Identification Number), fill up the required forms, pay the reservation fee and voila! The unit is yours. And we are ready to start your home loan application through in-house or bank financing.

Federal Land Inc. offers condominium units for sale in Makati; BGC (Fort), Taguig; Entertainment City, Pasay; Binondo and Paco, Manila; Greenhills, San Juan; Quezon City; Marikina; Cebu as well as in General Trias, Cavite. For lease to own plan details or pre-selling reservations, email us at digital.mktg@federalland.ph.