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Renting vs. Owning a Condo Unit – A Cost Breakdown

In the Philippines, the condo market is thriving, and the next best thing is to be a part of this growing market. Admittedly, a condo is always a sound investment. However, living in a condo is not for everybody due to both lifestyle and budget fit.

The Filipinos are resilient. They can adapt to whatever lifestyle, but the budget fit? Well, it’s a different story. That’s why some people are ‘testing the waters’ first—they rent a unit first to determine if they can live the lifestyle and whether they can truly afford such.

If you also want to understand the costs of renting and buying a condo unit, the cost breakdown below will surely help.

A cost breakdown of renting vs. owning a condo unit

Before moving in

When renting, you need to pay the initial rental cost that the condo unit owner requires you to pay. Monthly rentals for a 23-sqm unit located in Pasig like Amaia Steps Pasig ranges from Php20,000 to Php25,000. The usual deposit is three months advance, so that’s Php60,000 to Php75,000.

If you are going to buy a unit, you need to pay both the reservation fee and down payment. The reservation fee is usually Php10,000 to Php20,000, and the down payment is 10 to 20% of the total contract price. A 23-hectare, studio-type unit costs Php1.5 million so the down payment should be between Php150,000 and Php300,000. Don’t worry though because this is payable in 24 months. That’s Php150,000 + Php10,000 at the lower end.

Upon moving in

If you are a renter, you don’t need to pay the membership fee. However, the condo owner may require you to shoulder the monthly association dues, which cost around Php3,000. That’s Php36,000 in a year on top of the yearly rental rate of Php240,000 (Php20,000 x 12 months).

For a buyer, he or she needs to pay the joining fee which is typically Php10,000. Real property tax for the unit must also be paid yearly; it should not be more than 2% of the assessed value of the condo unit. So for a studio-type unit, that’s probably Php10,000.

While living

For renters, other than your household expenses, you need to pay for the monthly rent of Php20,000 plus Php3,000 for monthly dues if applicable. Let’s say you are a renter for ten years. That’s Php2.4 million plus Php360,000 for the association dues. This amount is enough to buy you a unit of your own in ten years’ time.

A buyer, on the other hand, needs to pay the mortgage on a monthly basis. The actual mortgage depends on several factors including the term of the loan. From the initial costs of Php1.5 million minus the down payment of Php150,000 and reservation fee of Php10,000, you need to pay the remaining Php1.34 million. That means you need to pay Php11,166 per month for ten years.

In sum,

the renter pays Php20,000 (monthly rent) + Php3,000 (monthly dues

the buyer pays Php10,000 (reservation fee) + Php150,000 (down payment) + Php10,000 (joining fee) + Php100,000 (real property tax (annual for 10 years) + Php1.34 million (remaining balance.

The only big difference is that the no matter how much you pay for monthly rent, the condo unit will never be yours. This brings us to conclude that if, after a careful assessment, you can adapt to a condo lifestyle and you have the money, it is always a wise decision to invest in a condo.

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