RFO vs. Lot-only vs. Pre selling House and Lot: Finding the Right Property for you

RFO's for sale

When it comes to investments, real estate is one of the go-to vehicles for many people.  Those who are not knowledgeable concerning stocks, businesses and other more complicated money-making opportunities can easily purchase real estate properties such as condominiums and affordable house and lots, provided he has the financial wherewithal to do so.  However, choosing the best real estate investment option is mentally taxing, as there are a plethora of choices available.  Fortunately, most choices can be categorized into three classes, namely: pre selling property, ready for occupancy (RFO), and lot-only.

Coming up with the best choice is difficult if you don’t have a prior notice or knowledge about each type as it has its own set of compelling pros and cons.  One choice can mean instant gains while others require delayed gratification before you can realize huge payoffs.  Still, a simple calculus of the advantages and disadvantages of each is overly simplistic.  One should also consider his current situation/context, and more importantly, the purposes and uses that these three types serve.

If you would like to change residences soon, location and housing type are factors you normally look into.  If you would like to purchase real estate as an addition to your investment portfolio, you should fix your eyes on the property status: is it already available, under construction, or is it just a bare piece of land?  If you are in the dark about what to buy, understand and think about the distinct benefits of buying pre selling properties, RFO, and lot only properties.

The Case for Pre selling Properties

Preordering items online, especially those in high demand, has been very popular nowadays.  This helps you avoid inconveniences such as interminable queues under the sweltering heat of the sun.  Similarly, we can also “preorder” real estate properties, by way of signing pre sale contract or buying pre selling properties.

Properties that are offered with pre sale contracts are those that are still under construction, but are already available for purchase.  The most common ones are the houses and condominiums during the initial stages of construction.  One benefit for buyers who would like to purchase pre selling properties is they get the first crack at selecting the house or unit that they like the most amongst the offerings of a subdivision or building. Aside from that, real estate developers often have various offer in house financing options for pre selling properties.

If you belong to those who operate on a tight budget and could only aim for affordable house and lots, a pre selling project should be the first thing on your mind.  Properties in the pre selling stage normally fetch prices that are significantly lower than the market value of those of Ready for Occupancy (RFO) properties. In addition to discounts, buyers are also afforded more flexible and reasonable payment schedules.  Sometimes, if you are lucky enough, even interest is scrapped or kept at a minimum.

An usually unappreciated benefit of purchasing a pre selling property is it confers you the ability to negotiate for adjustments.  Adjustments can save you lots of money in renovations and other expenses in both the near and distant future.  Still, you must understand that not all developers and contractors are amenable to your requests for alterations and deviations from the original plan or design, since they are constrained to operate within a fixed budget and maybe, rigid specifications.  For your own sake, you could check with the developer if they are open to your suggestions such as straying from the original paint hues and requesting for more electrical outlets.  In some cases, they are willing to bend backwards provided you shoulder the costs of adding needed materials.

Since the property is still under construction, you can also unearth looming problems concerning your future property.  Upon detection, the contractor can deal with these issues head-on prior to the consummation of the project.  However, it is incumbent upon you to request for the developer’s consent as some are hesitant on allowing buyers to take a look at whole construction process.

Pre selling properties are a good fit for those have the luxury of time, those who are not in a hurry to move in.  Retirees are a good captive market for pre selling properties, as well as lovers who are entertaining preliminary thoughts of starting a family.

Investment-wise, pre selling condos and lots goes well with those who can hang on for long periods of time before they decide to have the properties rented or lease.  If your property happens to be in one of the most sought-after locations, you can shoot for the stars by demanding a rental fee that is higher than usual.  If someone bites your offer, the long wait is very much worth it.

The Case for Ready for Occupancy (RFO) Properties

Real estate is a timeless investment since having a roof under one’s head is one of humanity’s fundamental needs.  Location of course arguably has the biggest impact.  Nevertheless, there is always a person who needs to find a place to stay as soon as possible.   This could be you, or any of your loved ones. 

Houses, units, or rooms for rent serve as stopgap answers.  Even better, the rent-to-own ones offer a permanent salve to the ache of having a home day in and day out.  If being a tenant is not your cup of tea, you can always choose to purchase Ready for Occupancy (RFO) properties.

The greatest allure of having an RFO is that you can pack your bags and move in immediately after all the documentations are finished.  At best, a few weeks are all you need to complete all the paperwork.  You do not have to worry about how long the construction would be, since an RFO is already a finished product.

If you are of the entrepreneurial ilk, you can recoup your “losses” by renting out your RFO property. You may ask for an advance payment prior to having the tenant move in, provided the location of your RFO is coveted by many.  Also, the chances of having a tenant immediately knocking at your door is higher when you own an RFO than when you own a pre selling or lot-only property.

  • On the whole, the expenses associated to an RFO are larger than those tied to pre selling and lot-only properties. One silver lining is that you can view RFO as the most affordable type, since you would not lose sleep over giving away hard-earned money to construction, installation, and inspection people.  Aside from money, these processes could fritter away your precious time.  If you are at present leasing a property, you can stop the financial bleeding by purchasing an RFO and transferring to your new abode posthaste.

Credit goes to housing loans, which facilitates the dream of most to having a home and simultaneously venturing into real estate investment.  If you do not have money to spare, RFO offers you a higher probability of obtaining a housing loan.  The developers themselves can extend a helping hand so you can jumps tart your loan application.  Pre selling also offers this assistance from developers.

A finished product precludes the possibility of the developer bamboozling you and coming away with your hard-earned money. Also, the chance of your house not being constructed fully is nil.  When the developer puts up the RFO for sale, chances are the tax, ownership, and other issues regarding your property are already settled and dealt with.

For those who are not keen on micromanaging every detail in their house, RFO properties are a perfect fit.  RFO designs remove the decision fatigue that you can experience when you are scouring the internet for ideas.  The necessity for having a contractor to bring your vision into fruition is also eliminated.  Also, the headaches associated with acquiring building permits are gone in an instant.

As you give up your latitude on the specifics of your RFO house, you can still get your creative juices flowing by designing the interior.  You can buy furniture pieces that jibe together.  Also, your collections and memorabilia can spice up an otherwise dull interior.

A good thing about RFOs is that they offer an escape from dangerous communities, as most of these are nestled inside a location with lots of amenities and 24/7 roving security.  Families who seek to liberate themselves from perilous neighborhoods treat RFOs as a godsend.  Needless to say, you need to meet the basic financial requirements to gain access to these RFO properties.

Expats also are a good market for RFO condominiums.  However, the constitutional provision that bars them from owning land excludes them outright from the house and lot market.    Also, one invaluable tip: you may visit your RFO community at diverse times of the day, so as to have a good grasp of the general safety and temperature of the locality.

The Case for Ready for Lot Only Properties

Having disposable cash on hand should not rush you into buying a house and lot.  If your personal situation dictates that you should look for tenants since you cannot move in immediately, a house and lot may not be the best option.  If you are in this predicament, you may have to find a caretaker for your property.  In this light, your real estate asset becomes more of a liability.

If your decision is not yet firm, you can also veer your attention towards lot only properties.  Lots give you utmost flexibility and adaptability, since they are essentially a blank slate.  You can do anything you please, such as employing your land for commercial or residential use, unless you happen to be in those subdivisions whose land use is fixed.  Lots also do not require caretakers to maintain, and you yourself can act as one by visiting it every now and then.  If you are working abroad, you can assign a loved one to periodically watch over your land.

Lot-only properties also give you emancipates you by giving you a free hand in designing your own house.  You can even make room for amenities such as a swimming pool, a tree house, and a well-cultivated garden.  You can also ensure that the design of your house is trendy and modern as you keep yourself abreast of the latest architectural and engineering developments.  If your hand is forced to follow predetermined designs since your lot is in a subdivision, you can console yourself that your neighborhood will be easy on the eyes.

Needless to say, lot-only properties are cheaper since there is no structure on it.  A lot allows you to buy time and conserve money.  You can even gain money by having your lot rented such as turning it into a parking space and other profitable uses.  If your rental business is good, you can stack enough cash to actually finance the future construction of your dream home.  Large lots are also good sites for erecting apartments or townhouses.

Also, lots act as good collateral for loans.  If you are cash-strapped and the possibility of defaulting on your loans is inevitable, losing possession of the lot is a lesser evil and a less painful gut-punch than losing both your house and your lot.

The OFWs are a good market for lots, if they only wish to start any construction once they retire for good.  The same goes for retirees who are not OFWs.  However, they still need to process their retirement benefits ahead of time so that once they are out of the labor force, they are financially liquid to start building their dream structure.  Financial preparedness and liquidity cannot be overemphasized, since graybeards are not the most preferred market of those offering housing loans.

In the final analysis, pre selling property, RFO, and lot-only properties offer avenues for you obtain reasonably-priced housing and a would-be source of revenue.  Should you opt to rent out your property, take note of the existing demand.  Should you opt to cash in and sell it in the near future, seek avenues on how to jack up the price of your property.   

To further assist you in solidifying your decision, you can consider Bria Homes’ available properties.  Bria Homes has been one of the most trustworthy companies in the Philippine real estate industry.  Since its formation, Bria Homes Inc. puts premium on the establishment and development of affordable, reasonably priced house and lots and affordable condominium units that provides opportunities for ordinary Filipino families whose main dream is to have a home they can call their own. Bria Homes is the most suitable choice for normal Filipino workers and OFWs who desire to invest in a home of high, reputable quality that is also relatively inexpensive. Bria Homes offers flexible payment schemes for both their pre selling units and ready for occupancy units.

Interested homebuyers can immerse themselves through Bria’s 360 Virtual Tours in www.bria.com.ph and inquire online through our Facebook page at www. Facebook.com/BriaHomesInc.

BRIA Homes is a subsidiary of GOLDEN MV Holdings, Inc., .one of the largest real estate companies in the country. BRIA Homes is primed to bring quality and affordable house and lot packages and condominium units closer to ordinary Filipino families. This is the goal that drives every single employee in the company, for which the ultimate fulfillment is seeing a client happily moving into BRIA’s homes.

To know more, visit their website at www.bria.com.ph, like and follow “Bria Homes, Inc.” on Facebook, Twitter, Instagram, YouTube, Pinterest, Spotify, Viber Community, Telegram Channel, Kakao Talk, LINE and WhatsApp, or call 0939-887-9637.