A Clear, Practical Guide for Homebuyers & Investors in the Philippines
Choosing between a preselling condominium and a ready-for-occupancy (RFO) unit is one of the biggest decisions Filipino homebuyers and investors make. Each option has unique advantages — whether you’re after affordability, convenience, capital appreciation, or passive income.
This guide breaks down the differences, benefits, and considerations of each so you can confidently choose the property that aligns with your goals.
What Is a Preselling Property?
A preselling (or pre-construction) unit is sold before the building is finished. Developers offer units while the project is still in the planning or early construction phases.
Pros of Buying Preselling
✓ Lower introductory price
Preselling units are often 20–40% cheaper than completed units, allowing buyers to enter the market early at the lowest price point.
✓ Flexible payment terms
Developers typically offer light downpayment schemes and 0% interest monthly amortization, ideal for first-time buyers.
✓ Highest capital appreciation potential
As construction progresses, prices increase. Early buyers enjoy the largest equity gain by turnover.
✓ More unit choices
You get first pick: best views, best floor layouts, best locations within the tower.
✓ Ideal for long-term investors
Perfect if you want to hold a property until completion and earn from rental income later.
Cons of Buying Preselling
✗ Waiting period before move-in
You may need to wait 3–5 years (or more) depending on the project timeline.
✗ Developer risk
Quality depends on the developer. Delay or changes may occur — this is why choosing reputable developers is crucial.
✗ Construction uncertainty
Amenities, views, or floor plans may change slightly as the project is finalized.
What Is a Ready-for-Occupancy (RFO) Property?
An RFO unit is completed, fully built, and ready for immediate turnover. You can physically inspect it before buying.
Pros of Buying RFO
✓ Move in immediately
Ideal for those who need a new home now — no waiting for construction.
✓ You get exactly what you see
You can inspect the actual unit, check quality, orientation, finishes, and amenities before deciding.
✓ Immediate rental income
Great for investors who want quick returns through long-term or short-term leasing.
✓ Less uncertainty
No construction risk or potential delays.
✓ Bank financing becomes easier
Some buyers prefer RFO because financing is straightforward and fast.
Cons of Buying RFO
✗ Higher price
RFO units cost more because you’re paying for a completed product with zero waiting.
✗ Limited unit choices
The best units may already be sold — leaving only less desirable layouts or views.
✗ Larger upfront cost
Downpayment may need to be paid in full or in a shorter timeline.
✗ Lower capital appreciation potential
Since the project is complete, you miss out on the early-stage price appreciation that preselling units offer.
Preselling vs RFO: A Side-by-Side Comparison
| Category | Preselling | RFO (Ready for Occupancy) |
|---|---|---|
| Price | Lower | Higher |
| Payment Terms | Light, flexible | Bigger upfront |
| Unit Choices | Best selections | Limited |
| Move-in Time | 3–5 years | Immediate |
| Investment Potential | High appreciation | Immediate rental income |
| Developer Risk | Moderate | Very low |
| Ideal For | Long-term investors, planners | End-users, urgent movers, landlords |
Which One Is Right for You?
Choose Preselling If:
- You want the lowest price
- You prefer flexible monthly payment terms
- You are investing for future rental income or resale
- You want maximum capital appreciation
- You don’t need to move in right away
Choose RFO If:
- You need a home immediately
- You want to physically inspect the unit before buying
- You want instant rental income
- You prefer a low-risk investment
- You’re willing to pay a premium for convenience
Tips Before Choosing Between Preselling and RFO
✔ Evaluate the developer’s track record
Check past projects, turnover quality, and reputation.
✔ Consider your financial timeline
Preselling = lighter payments.
RFO = immediate expenses.
✔ Think long-term
Are you buying for a home, future security, passive income, or portfolio growth?
✔ Visit the location
Even for preselling, study the area, upcoming infrastructure, and demand drivers.
✔ Consult a licensed real estate broker
They can help you assess pricing, timing, returns, and risks objectively.
Final Thoughts: Both Options Are Good — It Depends on Your Goals
There is no one-size-fits-all answer.
Preselling is excellent for long-term investors who want low entry cost and high appreciation.
RFO is perfect for end-users and investors who want convenience and immediate income.
Choosing wisely starts with understanding your budget, timeline, goals, and the right guidance.
If you’d like a personalized comparison based on your target location, budget, and investment objectives, I can prepare one for you.
FAQ: Preselling vs RFO (Ready-for-Occupancy)
Q1: What is a preselling property in the Philippines?
A preselling property is a unit sold before the building is completed. Buyers purchase during the planning or construction stage, often at lower prices with flexible payment terms.
Q2: What is an RFO (Ready-for-Occupancy) property?
An RFO property is a completed and fully built unit that is ready for immediate turnover. Buyers can inspect the actual unit before purchasing.
Q3: What are the advantages of buying a preselling unit?
Preselling units offer lower prices, light payment terms, high capital appreciation, and better unit selection. They are ideal for long-term investors and buyers who don’t need to move in immediately.
Q4: What are the disadvantages of buying a preselling unit?
Key drawbacks include waiting time (3–5 years), potential construction delays, and dependence on the developer’s track record.
Q5: What are the benefits of buying an RFO unit?
RFO units provide immediate move-in, visible quality, instant rental income, and lower uncertainty since the building is already completed.
Q6: What are the downsides of buying an RFO unit?
RFO units are generally more expensive, offer limited unit choices, and often require higher upfront payment.
Q7: Is preselling or RFO better for investment?
Preselling is better for capital appreciation due to low introductory prices, while RFO is better for immediate rental income. The best option depends on your investment goals.
Q8: Is buying a preselling condo safe in the Philippines?
Yes — as long as the developer is reputable and the project is registered with DHSUD. Buyers should verify the developer’s license to sell, track record, and project permits.
Q9: Which is better for OFWs or first-time buyers?
Preselling is ideal for OFWs and first-time buyers who prefer affordable monthly payments, while RFO is better for those who want a home now or want instant rental returns.
Q10: Should I buy preselling or RFO if I want to live in it ASAP?
Choose RFO. It allows immediate turnover so you can move in right away.
Q11: Who should buy preselling units?
Preselling is best for buyers who:
- Want lower prices
- Prefer light payment terms
- Can wait for completion
- Want maximum value appreciation
Q12: Who should buy RFO units?
RFO is ideal for:
- End-users
- Investors seeking quick rental income
- Buyers who want to inspect the actual unit
- Families who need housing immediately
Q13: Which is more affordable: preselling or RFO?
Preselling units are significantly more affordable due to lower introductory prices and flexible payment schemes.
Q14: Which option offers higher returns?
Preselling offers higher capital appreciation, while RFO offers faster rental returns.
Q15: How do I choose between preselling and RFO?
Consider your goals:
- Choose Preselling → low price + high appreciation + flexible terms
- Choose RFO → immediate move-in + rental income + visible quality
Rafael Penilla, MBA
Licensed Real Estate Broker
PRC License No. 0004428
DHSUD No. NCR-B-6576
📩 Contact us today for expert, licensed guidance.
