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For many Filipinos, buying a condo is one of the biggest financial decisions they’ll ever make. Yet, choosing between a Ready‑for‑Occupancy (RFO) unit and a preselling condo often brings confusion and hesitation. Each option comes with its own advantages, whether it’s the instant move‑in appeal of an RFO or the affordability and long‑term gain of a preselling condo investment.
This guide from Condo Arena clarifies the differences between RFO and pre‑selling condos, guiding you through their benefits, drawbacks, and ideal scenarios. Whether you’re looking for a home to move into or planning to invest in real estate for future returns, it will help you make a confident and informed decision.
According to Colliers Philippines’ Q2 2024 report, the Metro Manila pre‑selling condominium market continues to face challenges with lengthened remaining inventory life and record‑low launches and take‑up levels. Understanding the pros and cons of each path, pricing, financing, and timeline, can help you choose the option that best fits your financial capacity and lifestyle goals.
Let’s dive in!
Understanding the difference between RFO and pre-selling condos
Before deciding which property to purchase, it’s important to understand what sets Ready-for-Occupancy (RFO) and preselling condos apart. Each option differs not only in cost but also in timing, financing structure, and investment potential. Recognizing these distinctions helps buyers match their purchase to their goals, whether that’s finding a home to live in right away or growing their investment portfolio over time.
Ready-for-occupancy (RFO) condos
RFO condos are completed developments that are ready for immediate move-in or turnover upon purchase. These units often appeal to end-users, families, professionals, or retirees who need a home without waiting through construction. Because they’re fully built, buyers can personally inspect the unit, amenities, and neighborhood before committing.
In Metro Manila, the average condo price Philippines for RFO units typically starts around ₱5 million for a one-bedroom unit in areas such as Pasig or Mandaluyong, while upscale developments in Makati or Bonifacio Global City (BGC) can reach ₱10 million and above, depending on amenities and developer brand. RFO units are also attractive for investors seeking immediate rental income, especially in high-demand business districts.
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Pre-selling condos
Preselling condos, on the other hand, are purchased before completion, sometimes even before construction begins. Buyers often secure these units at introductory prices, which can be 20–30% lower than their post-completion market value. This makes preselling condos popular among investors and first-time homebuyers who want to spread payments over time or take advantage of appreciation potential as the project nears turnover.
Developers usually offer flexible payment terms, such as low down payments and long monthly installment options during the construction phase. However, buyers must be comfortable waiting one to three years, or longer, for turnover, depending on the project’s timeline.
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Market context and developer trends
In today’s real estate market, developers strategically balance both RFO and preselling condo projects to cater to diverse buyer profiles. As of 2024, the Metro Manila condo market had 74,400 unsold units, including about 26,300 RFO projects, prompting developers to offer more attractive and flexible payment terms to stimulate demand.
Across major cities like Cebu, Davao, and Iloilo, similar trends persist: preselling condos are often more prevalent in growth corridors, while RFO properties cluster in established urban centres with mature infrastructure. These patterns reflect the evolving needs of Filipino buyers, some prioritising affordability, long-term growth, and competitive condo prices Philippines, while others value immediacy and tangible ownership.
Comparing RFO and pre-selling condos, price, flexibility, and investment potential
Understanding the distinction between RFO and preselling condos allows buyers to evaluate which option best matches their financial readiness, timeline, and goals. By weighing these factors, along with price, payment flexibility, and investment potential, homebuyers can move forward with clarity and confidence when choosing the property that aligns with their lifestyle and long‑term plans.
Recognising the advantages and trade‑offs between RFO and preselling condos helps buyers make practical decisions aligned with their financial goals and lifestyle needs. While both property types offer unique benefits, their differences in pricing, payment terms, and investment outcomes can significantly influence long‑term satisfaction and returns.
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Price and affordability
When it comes to pricing, preselling condos typically offer a more affordable entry point. Developers often launch these projects at introductory rates, up to 20–30% lower than their expected market value upon completion. For instance, a preselling condo one-bedroom unit in Quezon City might start at around ₱3.8 million, while a comparable RFO unit could cost ₱5 million or more due to its ready-for-occupancy status and immediate usability. These figures highlight the importance of tracking condo price trends when planning your investment.
RFO condos, though higher in cost, allow buyers to instantly benefit from their investment, whether for personal living or rental income. This makes them appealing to individuals with sufficient savings or those securing a housing loan to fund their purchase.
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Payment terms and financing
Preselling condo units often comes with flexible payment schemes, making them attractive to first-time buyers. Developers may offer stretched payment plans with down payments as low as 10%, spread over several months or years before turnover. These arrangements reduce financial strain and can often be combined with Pag-IBIG or bank financing upon completion.
In contrast, RFO units usually require a higher upfront payment or a more traditional mortgage structure. Buyers may need to provide a 20–30% down payment and secure immediate loan approval. While this setup demands stronger financial readiness, it provides faster ownership and potential rental returns.
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Turnover and move-in timelines
One of the clearest distinctions between RFO and pre-selling condos is timing. RFO properties are ready for immediate occupancy upon full payment, making them ideal for those who need a home now or investors wanting instant rental income.
Pre-selling properties, on the other hand, requires patience. Construction timelines can take two to four years, depending on the project scale and developer. For buyers not in a rush, this waiting period can be worthwhile, as the property’s value often appreciates by completion.
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Investment return and appreciation
Investment potential varies between the two. Preselling condos often offers higher capital appreciation, as buyers purchase at a lower rate and benefit from the property’s value increase over time. In prime Metro Manila locations, preselling condo units have historically appreciated by an average of 5–7% annually, often outpacing inflation.
Meanwhile, RFO condos generate immediate rental income, particularly in central business districts like Makati, Ortigas, and BGC, where occupancy rates remain strong. According to Santos Knight Frank (2024), Metro Manila condos recorded an average gross rental yield of 5.5%, with RFO properties leading the segment due to their move-in readiness.
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Risk factors
Every property investment carries risks. Preselling condo buyers face potential challenges such as project delays, changes in design, or, in rare cases, developer insolvency. Verifying a developer’s track record, licenses, and financial stability is crucial before committing to a long-term payment plan.
RFO buyers, while avoiding construction risks, take on maintenance-related responsibilities, including association dues and repair costs. Older RFO units may also require renovations that add to the total cost of ownership.
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Legal and practical considerations
Before buying either type of condo, it’s essential to review the Contract to Sell, verify the developer’s License to Sell from the Department of Human Settlements and Urban Development (DHSUD), and confirm the project’s compliance with local regulations. Engaging a property lawyer, licensed broker, or financial adviser helps ensure due diligence, protecting you from legal and financial setbacks.
Recognizing how these factors influence cost, risk, and opportunity enables buyers to confidently assess which property type better aligns with their goals, whether that means immediate move-in convenience or long-term preselling condo investment growth. Tools and insights from Condo Arena can further guide your decision.
Ready to explore your options? Discover the latest Property List and use Condo Arena’s Real Estate Comparison tool to find the condo for sale that best suits your goals. Whether you’re learning how to buy a condo or investing in real estate, Condo Arena is here to help you make confident and informed decisions every step of the way.
