Everyone will love to own their respective individual condo investment whenever the opportunity comes in and as most buyers look at the best affordable condo investment in the country; buying a rent-to-own property can be eye-catching.
Rent-to-own or lease-to-buy property is a form of agreement between a tenant and the property owner or developer that gives the tenant a privilege to buy the rented property within a specific period of the lease before the lease contract expires or ends.
Unfortunately, as someone who aspires to have a condo unit applying for a rent-to-own or RTO arrangement may not be all-pro for tenants perhaps it also has its disadvantages to someone who eyes to enter such property buying preference.
Disadvantages of Buying a Rent-to-Own Condo
In this article, we will shed light on some of the most excruciating facts of RTO you may want to know before thinking to sign into it.
As a buyer, you may want to safeguard yourself before entering or signing an arrangement you might be losing at the end. Measure the list of disadvantages of buying a rent-to-own or lease-to-buy condo from the facts below.
Higher Monthly Payments
Compared to other rental condo properties available in the country most of the RTO condominiums poses higher leasing or rental rates. It is practically higher compared to those of its counterpart as you will also be impliedly paying somewhat of its property value.
You can also blame the demand on which the rent-to-own property is suitably located. The more city center its location will be the higher the demand, the higher the prices of buying and renting the property will be.
The owner and developer may also place higher payment costs with the availability of exclusive functional amenities a condo development can offer. The presence of a clubhouse, swimming pool area, fitness gym, and other perks can raise the price of the property.
Suggested Read: Beautiful Condo in Davao offers Rent to Own Units
Financing Risks in the Future
Lease to Own contracts will require the tenant to pay a rental fee every month to acquire the right to purchase the property in each period. Unfortunately, the payment can also increase over time while the banking loans and policies can also change in no time without giving the tenant a fixed favorable setup.
It can also mean that a bank loan may not be workable in the coming future for any tenant given the dynamics of loan requirements in the country. He or she may not be able to get the approval for the loan if finances or sources of income are limited.
Market Pricing Risks for Rent to Own Condos
If you are a tenant who wishes to purchase the property you are renting, then a rent-to-own contract may be suitable however the property is still entitled to the owner or the developer. Under this arrangement, all the advantages are with the name written in the property title.
If the situation favors the owner more than the tenant, and the market improves and the condo property value increases, the tenant may consider buying the condo with the locked-in price based on the RTO contract.
Meanwhile, if the market condition drops so as the property value of the condo unit; this can cause the purchase intent of the tenant to become jeopardized. In the end, the owner or developer may end up selling the property at a lower value.
Suggested Read: How Rent to Own Properties Work in the Philippines
Forfeit of Payment Risk
Before entering to contract you should ask assistance from a lawyer to discuss the black and white of the arrangement as such purchase of RTO property can inhibit any form of refund if the buyer chooses not to continue with the deal anymore.
Revocation of contract and consultation with realtors will only guarantee you to sustain financial loss as most of the sellers will also not be letting you as a buyer withdraw the down payment made beforehand.
It will be much suited to leave the property as early as you can after advising that you cannot or will not longer continue the RTO contract. However, everything will be dependent on the contract so you should be sure that you are well-read on the terms and conditions before you jump into such investments.
Buy an Affordable Condo Investment
If you can own an affordable condo with the amount at par with the rental rates of a condominium in the city; the better option is to buy a property that will suit your budget rather than going to a more costly property at the end of the day.
Camella Manors offers condo for sale properties located in the most developed and developing areas outside Metro Manila. The brand gets you to fulfill your dream home with affordable, high-quality, and exclusive midrise condo developments well suited for a condo lifestyle in the city.
Distinct and appealing functional amenities are also present in every project of the brand. Leisure pools, kiddie pool, kids’ playground, clubhouse, indoor and outdoor fitness areas, recreational areas such as pocket parks, meditation area, mini amphitheaters are also present, and the clubhouse houses event area for exclusive gatherings.
Suggested Read: When is the Right Time to Rent Out Your Condo?
Choose Camella Manors Condo Properties for Sale
Camella Manors is the newest brand under Vistaland and Lifescapes Inc. that offers condo spaces inside communicities by providing a sustainable condo living in a city.
The perks of having resort-themed amenities and the advantages of accessibility towards daily needs such as conveniences, hospitals, banks, malls, and other commercial businesses all in one strategically developed location.
Communicities of Camella Manors will bring delight to any investors as most of the commercial components from VLI will be housed closer to your condo spaces or within just a stone’s throw-away just like Camella Manors Bacolod and Camella Manors Caloocan.
You can easily come home today in Camella Manors’ investment areas located in Caloocan, Lipa, Puerto Princesa, Bacolod, Butuan, and Davao City. The brand caters to all condo housing needs and investments from pre-selling to ready for occupancy or RFO condo units for sale.
Check out our properties or better yet inquire today to seek consultation from our marketing officers via this form. You can also simply send a message in our official chat box for more detail and immediate response.