Are you considering buying a condominium unit? This is a question many people ask, especially young adults that are in their late 20s or early 30s. Some consider a unit a first home or an investment which they could receive a good return of investment. These two are valid points that many would say it’s true; however, before paying the down payment, pause and think if it is worth the millions you’ll spend on it. Experts cite the following arguments that make buying a condo unit a worthwhile investment.

Potential Rental Property

One of the reasons people purchase a condo unit is to rent it out. Many condos are right at the center or near business and entertainment districts. This makes them an attractive option for short-term businesspeople or for employees who don’t want the hassle of commuting or driving to work. Metro Manila traffic is notoriously bad; many spend hours just to reach the office and return home when the day ends. For example, a condominium for sale near the city center or the city business districtis accessible to many businesses in the area. One can just walk or bike to work when they are in a unit in that part of the city.

The location of the unit you purchase has a lot of potential as a rental property. This provides you with passive income that you can use to build your savings or make other investment.

Re-Selling in the Future

Some markets are on the upswing, making a unit a hot commodity that has plenty of potential. This is another reason people buy a condo unit because they expect its value to increase over time. This is a calculated risk that some are willing to take because they consider factors such as location, future developments and current price. Some will spend the time and money to renovate and improve a unit. They will purchase furniture, make additions and other improvements to boost a unit’s market value.

Buying when the price is low provides a greater return in the future. However, there is also a possibility that a condominium will lose value in the future.

A condo unit has a lot of investment potential, but it also has expensive caveats. Experts also make arguments about why a condominium may not be an investment.

Residential Use

Some would agree that purchasing a condo unit solely for residential use isn’t a good investment. Some units cost more or as much as a house and lot. If you don’t rent out a condo even just for short holiday seekers, you’re losing potential income.

Condo Vs. House and Lot

Some make the argument that a house and lot is a more worthy investment compared to a condo unit. This is valid because when you buy a home, you own everything within its confines. A condominium unit is not completely yours. You’ll have to follow contract rules and must stay within its limitations.

A condo unit is worthy of the money you spend on it if you use it for potential income such as renting out or re-selling. Consider factors such as future developments and location before making an investment. This allows you to get a good return on investment.