In
height of the phenomenal success of condominium in real estate market, there
are still “loopholes” on the side that need to look at. For a newbie and
unfamiliar investor of property like me, security is the topmost concern that
needs to please. If the person is a conservative or unaggressive
investor, it is unbecoming for him to take the risk specially if the resources
is very limited (meaning from a single saving or from a small savings
only). For this, I would like to take my stand in condominium that holds
back me from acquiring any so here are my issues that may help other when
planning investment through real property.
From
the start, condominium has no attraction to me. Except that it is
strategically rise in urban areas to bring the majority career working people
closer to places of work and commercial areas to meet the means of coping up
in this fast-phase life, I don’t see condo as an asset that can give me peace
of mind. Here are the reasons why I must say that.
1. Condominium
actually has issue in the security of tenancy. Buy now, demolish
later. There is life span for
condominium for let say 50 years because every structure at that age will need
to demolish for security reason. When the time comes, the unit owners
have to choose: do they want to sell the depreciated building and divide the
amount among themselves or call a developer to build a new condominium on the
same land. In both you may lose your tenancy by repaying again.
2. It
is indeed has limited tenancy, your ownership in the condominium is actually
limited to your unit only. You all occupants, you cannot say per se you
own the lot where the condo stands. It
is still the real estate who owns the land and handles the title. Unit owners possess only their ownership to
their unit. Imagine a ten - storey condo
with a typical 50 sq. m. every unit. Citing an example your unit as
owning the corner space of the building, you ten consecutive owners of the
corner space of each floor are owning only your 50 sqm space and not the 50 sqm
lot. Imagining these 10 people hanging in the space from first floor
straight up to the tenth floor, that is how their ownership to illustrate.
3. In
fortuitous events and emergency situations like fire, earthquake, flood or
chemical leak incident, it seems that in most previous cases the building
owners were not fully obliged for the property indemnity damages. The
building owners do not re-build the buildings, this may means you lost your
property. There are even some hearsay that the owners intentionally arson
the building if it is almost 50 years for they are not practically profitable
any longer, to collect insurance, to recruit another buyers into a higher price
etc. —
4. In
condominium, you are losing some amount of freedom and enjoying less privacy.
There are so much prohibitions that occupants are bounded and need to abide
like the rules and regulations about having pets, inviting visitors, tossing
parties, planning minor renovation, annoying neighbours, restriction on sounds,
and even cooking distinctive foods or kind of curtains to put. There are set of rules, regulations, codes
and restrictions that may not suit your lifestyle.
5. It
is costly to stay in condo. This is the big turn off to me. Aside
from the amount you paid for your unit, there are regular maintenance fees that
you need too to pay such as security, elevator, maintenance, parking area, building
insurance, laundry and drying area fee, etc. Depends on the type of condo
if it is low cost, you may not have that much dues but those high cost condos
are most likely collecting lots of monthly and annual dues. Of course
whether you like it or not, you have the monthly electric, water and
communication bills.
Sad
to say condominium becomes status quo of our economic level rather than a real
necessity asset. I would rather get a townhouse where I can clearly read
my name as the duly owner of the property, stay there for the rest of my life,
use it in a bank transaction, and transfer it to my children in my last
will. It is better in the sense that it will last longer as in it can be
a family property from one generation to another generations.
By Alex V.
Villamayor
May 10, 2016
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