Condos or Serviced Apartments: Which is the Right Fit for You? 5 Must-Know Facts Before Buying!
When considering luxurious living in a high-rise residential property, your mind may conjure up images of condominiums or serviced apartments. Although there are new property concepts that blend the characteristics of both, there are still distinct differences between them, each with its own benefits. It's crucial to be aware of these variances. This article will delve into 5 key factors you should keep in mind when deciding between a condo or serviced apartment.
To start with, let's establish what sets these two types of properties apart.
What is a Serviced Apartment?
In essence, a serviced apartment is a completely furnished flat that can be rented for both short and long periods of time. These accommodations offer a range of amenities for everyday use, such as routine cleaning and other services. They can be thought of as being akin to hotels, but more cost-effective. Generally, serviced apartments are leased for brief durations, such as for a holiday or business trip.
What is a Condominium?
A condominium or condo refers to a private residential living area, similar to an apartment, that is owned by an individual or family within a building or community containing multiple units. While condominiums all share common areas, such as yards, swimming pools, gardens, parking spaces, recreation rooms, or gyms, these spaces are not exclusively owned by any individual unit owner but are instead managed by the condominium management. Essentially, condominiums are akin to apartments, with the key difference being that a single individual or corporation owns an apartment building, whereas in a condominium, each unit is owned by a different individual.
What is the difference between Serviced Apartment and Condominium?
The main difference between a condominium and an apartment lies in their legal designation regarding the land on which they are built. Condos are categorized as "residential," while serviced apartments are classified as "commercial." This distinction leads to variations in their legal regulations, taxation, and functions.
The following are the essential facts you need to be aware of when comparing these two property types:
Difference in Utility Charges
As previously noted, serviced apartments and condominiums have distinct land classifications. This implies that serviced apartments are subject to commercial rates for utilities like electricity, water, and sewage, which are typically more expensive than residential rates.
Utility companies also impose higher deposits for serviced apartments. Some developers attempt to circumvent this issue by negotiating lower rates with the utility companies, although the success of such efforts is uncertain. If you intend to purchase a serviced apartment, it is critical to first confirm whether the developer has secured lower utility rates, as this could have a significant impact on your finances.
Difference in Tax Rates
The assessment charges and quit rent for serviced apartments are computed based on commercial rates, which are generally higher than residential rates. Nonetheless, it's worth noting that there are no other disparities in the tax rates between serviced apartments and condos.
Difference in Maintenance Fees
Due to the elevated rates charged on serviced apartments, the maintenance fees are typically higher as well. Additionally, they are computed based on commercial rates.
Difference in Environment
The two different types of properties - condominiums and serviced apartments - have different environments. Condos are private with security personnel controlling access.
Serviced apartments, being commercial properties, are often attached to shopping malls or retail shops. This means residents have no control over businesses setting up there or non-residents moving around the area, but they have access to various commercial amenities. Some serviced apartments are not attached to malls, but they are in the minority.
Difference in Population Densities
Condos and other residential developments are constructed based on the number of units or people per land area. In contrast, serviced apartments and other commercial developments are constructed based on the plot ratio or the total built-up area per land size. This difference affects the number of neighbors you will have.
Since serviced apartments use the plot ratio system, developers can build more units than condos on the same land size. For instance, if a developer is permitted to build a condo with a population of 1,000 people per acre, and each unit is occupied by five individuals, a maximum of 200 units can be built per acre of land. But, if the developer is permitted to construct serviced apartments based on a plot ratio of 1:10, they can build up to 440,000 square feet of space on one acre of land, which is enough to build 400 units of 1,000 square feet apartments. This number could be more if the units are smaller. Therefore, it is crucial to consider this factor when deciding to buy or not.
So, the crucial question is...
What is the better option: a condominium or a serviced apartment?
To determine whether a condo or a serviced apartment is suitable for you, it depends on your lifestyle, habits, and buying goals. If you prefer a commercial-like environment with convenient amenities, a serviced apartment may be more appealing, particularly for young professionals. If privacy and a peaceful setting are important to you, or you have a family with children, a condo may be a better option.
If you're considering purchasing a rental property, you should think about the location, amenities, and accessibility to public transportation.
In conclusion, the key is to make an informed decision, and this article is intended to provide you with the necessary information to do so.