When you think of luxury in a multi-storey residential building, you think of condominiums and serviced apartments. Nowadays there are many new property concepts which blur the lines between what is a condo and what is a serviced apartment. However, there are differences between the two and they both come with their own advantages. It is important to know what they are.
In this article, we will look at 5 important points you need to know before you buy a condo or serviced apartment.
First, let’s define the two.
What is a serviced apartment?
Simply put, a serviced apartment is a fully furnished apartment, available for both short-term and long-term stays. They provide various amenities for daily use, regular housekeeping, and other services. They can be seen as something like hotels, but more affordable. Most serviced apartments are rented out for short stay, for things like a vacation or a business trip.
What is a condominium?
A condominium or condo, is a private residential living space, similar to an apartment, which is owned by an individual or family in a building or community with multiple units. All condominiums share a nonexclusive common area like yards, swimming pools, gardens, parking space, recreation rooms, or gyms that is controlled by the condominium management. Condominiums are similar to apartments except that a single person or corporation owns an apartment building, while a condominium is where individual dwelling units are owned by different individuals.
The core difference between condos and serviced apartments is in their land status. Condos are considered “residential”, whereas serviced apartments are considered “commercial”. This means that the laws, taxes and functionalities between the two are very different.
The key points you need to know about them are as follows:
1. Difference in utility charges
As we mentioned before, serviced apartments and condominiums have different land statuses. This means serviced apartments are charged commercial rates for utilities such as electricity, water, sewage etc., which are normally much higher than residential rates. Deposits imposed by utility companies are also much higher. In some cases, developers try to work around this by negotiating lower prices with the utility companies, which may or may not be successful. If you want to buy a serviced apartment, try to confirm this fact with a developer first. It could make a world of difference for you financially.
2. Difference in tax rates
Both quit rent and assessment charges are calculated at commercial rates for serviced apartments, and these are again normally higher than residential rates. A big plus however is that are no other differences when it comes to tax rates of the two properties.
3. Difference in maintenance fees
Because of the higher rates charged on serviced apartments, the maintenance fees also tend to be higher. They are also evaluated at commercial rates.
4. Difference in environments
As you might imagine, these two different property types come with very different environments. Condos are made to be private, with security personnel who control who comes into or goes out of the property.
Most serviced apartments on the other hand, being commercial properties, are attached to shopping malls or retail shops. This means residents have no control over the businesses that set up shop there and no control over the flow of non-residents moving around the area. On the other hand you get a multitude of commercial amenities. If you live in a serviced apartment you can simply take the lift downstairs and do all your shopping, eat at your choice of restaurant or go see a movie. That is a major plus point. Of course there are some serviced apartment complexes that are not attached to malls, but those are in the minority.
5. Difference in population densities
Condos and other residential developments are built based on units or population per land size. Serviced apartments on the other hand, alongside other commercial developments, are built based on plot ratio, or the total built-up area per land size. What does this mean? Well it affects how many neighbours you will have.
For serviced apartments the plot ratio system means that developers can increase the maximum number of allowable units. This will be a lot more compared to condos situated on the same land size.
Let’s take an example: let’s say a developer gets permission to build a condo based on a population of 1000 people per acre. Now let’s assume 5 people live in a 1,000 square foot unit. This means that a developer can build a maximum of 200 units per acre of land.
Now let’s say a developer gets permission to build serviced apartments based on a plot ratio of 1:10. For the same 1 acre of land (measuring about 44,000 square feet), the developer is allowed to build up to 440,000 square feet. This means the developer can build 400 units of 1,000 square foot apartments. This number could go up if they decide to build smaller units.
That’s a lot of people, so keep that in mind when you’re making your decision to buy or not.
So now we come to the big question.
Which is worth it? A condo or a serviced apartment?
The honest answer is that it depends on you, your habits, your preferred lifestyle and your goal for buying the property. If you like the idea of having mall like amenities right next door or below your feet, then you should go for a serviced apartment. It might also suit young working persons. If you value your privacy and like a quiet environment, or have a family with children, then a condo is the way to go.
On the other hand, if you are looking for a rental property, then the decision rests on your target audience. You would also need to take into account location, amenities, access to public transport and so on.
Whatever your choice, the important thing is to make an informed decision and that is the purpose of this article; to help you make that decision.
Are you looking for the right property for you? Talk to us, send us a message at firstname.lastname@example.org or call us at 012-299-6155 or 03-7450-6655.
Liked what you read? Check out this article next: 5 Pro Tips for Gen X and Gen Y Home Buyers
Be a part of our award-winning team of investors, click here: http://bit.ly/2E2Gi42