“Condo’s lifespan is only 50 years,” you were told. Is this true? What will happen to the condo after 50 years? Let us examine this issue.
In the long term, it is preferable to buy a house and lot (compared to condo unit) because the land is yours for life and you can build another house if the old one is no longer habitable. The property can be inherited by your children and their descendants until the earth is livable. The parcel of land is yours forever. It cannot be taken away from you, even by the state without due compensation.
Condo ownership is unique because you owned the unit but you partly owned the land and the common areas in the condo project. As a co-owner, you are dependent on the majority decision of the corporation (you automatically become a member of the corporation upon buying a condo unit and has a voting right/voice) on what to do with the building and the land.
The condo becomes uninhabitable
Like any man-made structures, condominium is subject to the natural process of wear and tear. The building becomes old and uninhabitable in a certain period of time, 50 years or so, and must be demolished.
After 50 years, a condominium becomes (1) obsolete and uneconomical to maintain, and (2) the homeowners (simple majority per unit for exclusive residential or commercial use and per floor area for mixed use) may not be interested to repair, restore, remodel or modernize the condominium.
The homeowners have three (3) options: (1) They sell the property and divide the proceeds of the sale among its members; (2) they build a new one; or (3) they enter into agreement with the same developer (or a new developer) and, agree among other conditions, the provision of a unit per member of the corporation in the new condo project.
Should the homeowners decide to undertake some repair or modernization of the condominium, the building may still be habitable and safe for human use, even after 50 years. As wise men say, it takes a lot of work to make the old house livable and worth living.
50 years term of a corporation
The “50 years lifespan of condominium” may refer to the life-span of the corporation and not necessarily to the condominium per se. Under the Corporate Code, the term of a corporation is limited to a period not exceeding 50 years from the date of incorporation unless dissolved earlier or such period is extended.
It must be noted that the term of the condominium corporation is co-terminus with the duration of a condominium project. Thus, after 50 years, when the condominium is well-maintained and modernized by the homeowners, the corporation will file for the extension as provided for in the Corporation Code.
When you buy a condo, make sure that you fully owned the condo (Perpetual Ownership) and not just renting it for 50 years with renewal of another 25 years (Leasehold Ownership).
Convenience and comfort in condo living
In the end, as end-user of a condo unit, the close proximity of the condo to everything (workplace, shopping malls, restaurants, government offices and business centers, leisure and entertainment establishments, and other modern conveniences) is more than enough to compensate your money.
Condo provides you comfort and convenience. You don’t have to deal with heavy traffic when your condo is a walking distance to your workplace. Since you want to know the worth of your money in buying a condo with a life term of 50 years, you have to translate into monetary value the comfort and convenience it brings into your life, the time you saved because the condo is a walking distance to your office and other establishments, the money you saved from commuting from your old home to office, among others. In the long run, you are not wasting your money at all.
Condo living is stress-free. But it depends on your lifestyle and life-situation. For unmarried young professionals, condo living is a good choice for active lifestyle. However, married couples with children may prefer the gated subdivision.
Condo rental is a profitable business
If you are an investor, the profit you earned in condo rental is more than enough to worry about your initial investment. The rule of thumb in condo rental, that is, you used the unit for rental business, 12 to 15 years you already get your return of investment. The increase of condo projects in Cebu is enough indicator that condo rental is doing fine. The average price of condo unit in Cebu City is ₱110,000/sqm (house and lot at ₱40,000/sqm). Tourism, BPOs and the OFW remittances are the propellers of real estate business in the region; include also the 5% rate of local migration. Let us talk about some condominium projects that are strategically located and yet still affordable. Contact 0917-911-3530.
Condominium, like other man-made structures subject to wear and tear, becomes uninhabitable and must be demolished. Thus, the corporation (condo homeowners) is forced to sell it and the proceeds shall be divided among the members. The appraisal value of the property, 50 years after, is already high. Not really a waste of your money.
After using the condo for 50 years, the comfort and convenience it provides like close proximity to everything you need like workplace, hospitals, malls, restaurants, recreational centers, government offices, business centers, among others, is more than enough to compensate the money you paid for the condo unit. You saved in your transportation budget and, more importantly, you saved a lot of your precious time that can be wasted–and you don’t have to suffer the unnecessary stress–due to heavy traffic.
Make a wise decision. Condo living depends on your needs, preferences and lifestyle. For young single professionals with active lifestyle, condo is a good choice. However, for married couples with children, a gated subdivision is a better choice. The price and value of the condo (and other real estate properties) depends on location. If you are planning to buy a condo or a house and lot, contact us at 0943-486-3246 and let us discuss your options.