Securing ownership of an apartment or condominium in today’s economy is definitely a huge milestone for any individual. The cost of monthly mortgage, maintenance, and everything in between is no joke. Nevertheless, if you’re opting for a sustainable alternative, renting an apartment or a condominium is a preferred, practical avenue for most individuals. Renting isn’t as commonly perceived, which provides a lot of benefits and advantages of renting an apartment over owning and vice versa. It all comes down to your plans, what you need, and your financial preparedness. Owning an apartment or condominium is a big commitment indeed. In this article we will discuss the pros and cons of both owning vs renting, to help you determine the better option for you, and identify the right opportunity to invest in a house.
What is Renting?
Renting or leasing refers to the act of temporarily occupying and utilizing a property such as homes, apartments, and condominiums in exchange of monthly payments to the landlord. These monthly payments are usually referred to as “rent”.
While renting, tenants usually have to comply with the terms of a lease agreement, which outlines the duration of the rental period, the monthly rent amount, any rules or restrictions, and the responsibilities of both the tenant and the landlord.
Renting can be a flexible and practical housing solution for people who may not be ready to commit to the financial aspects of homeownership or those who require temporary accommodations.
Cost of Renting in Metro Manila
The cost of rent may vary depending on:
- Accessibility
- Amenities
- Apartment / Condo Size
- Number of bedrooms
Studio apartment / condominium rent in Metro Manila is usually around P6,000 – P30,000 per month
One bedroom apartment /.condominium rent in Metro Manila is usually around P10,000 – P45,000 per month
What are the Benefits of Renting Over Owning?
- No mortgage fees
When you rent a property, you’re not responsible for securing a mortgage or dealing with costs such as down payments, loan origination fees, and interest payments. This can significantly reduce your upfront financial burden and make it easier to access housing without a substantial initial investment and long-term commitment.
Another advantage is your monthly expenses are easily predictable, as rent is typically a fixed expense. This enables you to create stable budgets and financial planning.
- No commitment
The great thing about renting an apartment or condominium is that it doesn’t keep you from any ownership commitment. When you rent a property, you typically sign a lease agreement with a fixed term, often ranging from a few months to a year. This shorter commitment provides you with flexibility and the ability to adapt to changing circumstances more easily.
Whether it’s a job opportunity in a new city or a change in your living situation, you can complete your lease term and then make decisions without the extensive ties of homeownership.
- It’s cheaper than owning an apartment
One of the clear advantages of renting vs owning an apartment or condo is it’s much cheaper. Renting typically translates to lower financial costs compared to the expenses associated with owning an apartment. While homeownership involves a series of financial commitments such as mortgage payments, property taxes, and homeowners’ insurance, renting offers a more affordable alternative.
- Experience living in different cities
If you’re an adventurous type that wants to explore and experience the different parts of Metro Manila, then renting enables you to hop from one apartment to another, right after your contract ends with the current landlord.
What are the Disadvantages of Renting Over Owning?
- You don’t own the place
One of the disadvantages of renting in comparison to owning is the absence of ownership itself. When you rent a property, you’re essentially a tenant, which means you don’t have legal ownership of the place you’re living in. The lack of ownership means you have less control over your living space. Depending on your lease agreement, this means you, as a tenant, might not be able to do renovations or minor changes without approval from the landlord.
- Your landlord can kick you out
Another disadvantage of renting a home is that you are vulnerable to eviction by your landlord. While homeownership offers stability in terms of living arrangements, renting can involve more uncertainty. You might need to move unexpectedly if your lease is not renewed or if the property is sold. Landlords may decide to repurpose or sell the property, which could lead renters no choice . This lack of control over the property’s long-term use can be a disadvantage.
- Uncertain living conditions
One of the heaviest downsides of renting a home is the uncertainty of living conditions. Whether you lose your job, encounter health emergencies, or lack financial capabilities, situations out of your control can be a challenge when renting an apartment.
- Monthly rent may change upon landlord’s decision
While renting provides the stability of living without long-term commitment, renting can encounter unexpected financial strain if their landlord decides to raise the rent. Rent increases can disrupt budgeting and make it challenging to plan for other expenses.
What is Owning?
Owning, on the other hand, refers to the ownership of a home, apartment, or condominium. Rather than paying monthly rent, home owners are responsible for consistent payment of monthly mortgage payments, property taxes (if applicable), maintenance, and everything in between in owning a home.
Cost of Owning a Home / Condominium in the Philippines
The cost of rent may vary depending on:
- Accessibility
- Amenities
- Apartment / Condo square meter size
- Number of bedrooms
- And where you buy real estate from
Condominium Cost Approximate: Php 4 Million – Php 90 Million, or more
Home Cost Approximate: Php 2 Million – P10 Million, or more
What are the Benefits of Owning an Apartment / Condo?
- The title is yours
Owning an apartment or condominium comes with title and ownership. As a homeowner, you have the freedom to personalize and modify your living space to your liking. Whether it’s interior renovations, decor changes, or landscaping adjustments, you have the creative freedom to make your home personalized.
- No monthly rent (if you own it already)
Ownership also means you’re not subject to the potential rent increases that can affect renters, providing more predictable long-term housing costs. Having no obligation for monthly rent payments means you have a sense of ownership and security in your living situation. You won’t face the uncertainty of rent increases or the possibility of having to find a new place to live due to lease expirations or changes in rental agreements.
- It is an asset
One of the greatest benefits of having ownership over a house is it becomes an asset added to your wealth. Unlike renting, where your monthly payments are essentially expenses, owning a property means you’re acquiring a valuable asset that can appreciate over time, whether you intend to sell or keep the property.
Another benefit of owning is you can rent your home to renters as an exchange for passive income, in a form of monthly rent from renters.
What are the Disadvantages of Owning a Home over Renting
- Mortgage fees
Paying for mortgage fees is a long-term commitment and can last up to 5, 10, or 15 years, depending on the loan agreement you opted for. This includes both the principal amount borrowed and the interest accumulated. If you’re still in the stage or period of paying monthly mortgage fees, it can be a disadvantage considering uncertain living conditions. But in the long term, when you’ve assumed full ownership, it is a fulfilling achievement.
- Property tax
Property ownership also bears the responsibility of paying and complying for property taxes, which vary depending on the value and type of property. These taxes contribute to community services and infrastructure but can add a notable financial burden to homeowners.
- Upkeep and maintenance
Upkeeping and maintaining the house, apartment, or condominium can be a financial burden to homeowners. Any home damages, renovations, maintenance, and repair lies on the responsibility of homeowners.
So, Which is Better? Renting or Owning?
Owning vs renting a home, apartment, or condominium has its own pros and cons, it solely depends on your financial situation, commitment, and readiness.
When Should You Rent a House?
Renting a house is a practical choice when you’re just starting out your career or professional journey. Rent enables you to have sustainable living conditions without the worries of long-term commitment. Renting also allows you to relocate anywhere you want, if you want to live closer to the office, or if you’re working from home, you can work from anywhere.
When Should You Own a House?
While ownership of a home provides the benefits of owning a tangible asset and a sense of accomplishment, owning a house is where financial responsibilities and commitment becomes consequential. As mentioned above, many factors such as financial readiness and commitment to settle down, or simply when you can afford it without financial setbacks plays a major part in deciding whether it’s time for you to purchase a house under your ownership.
Where to buy a House in the Philippines?
- Real Estate – Enta
Enta is an end-to-end real estate marketplace in the Philippines that aims to be a one-stop-solution for everything real estate related by helping real estate brokers to have a digital presence and professionally connect and match properties for buyers needs without difficulty.
- Foreclosed – PAG-IBIG Acquired Asset
A PAG-IBIG Acquired Asset is a property, or in this case, a house, that has been foreclosed since the original owner failed to pay their monthly amortization in PAG-IBIG’s housing loan.
- Banks – BDO
Banco De Oro, or BDO is a bank in the Philippines that also has properties for sale. From cars, housing, and condo units that are either foreclosure, repossessed, or first-owned, BDO can provide you with properties you need.
Bottom line
Owning vs renting has its own benefits and disadvantages, but the decision when to buy a house is complex. Ownership offers the advantage of building equity and potentially benefiting from property appreciation, providing stability, creative freedom, and potential rental income. However, it comes with the responsibilities of mortgage fees, property taxes, and upkeep.
On the other hand, renting offers flexibility, lower initial costs, and fewer maintenance responsibilities, but lacks the potential for long-term wealth accumulation and the sense of permanence that ownership provides.
The decision between owning and renting relies on your financial situation, lifestyle preferences, and long-term goals, on deciding over owning vs renting.
