11| The Tale of the Unaware Owner: Condo vs. Serviced Apartment

Once upon a time, I had a delightful chat with an owner who unwittingly bought a serviced apartment instead of a condo. Bless the creative developers who conveniently forgot to mention the property type in their ads and marketing materials. To top it off, the salesperson conveniently neglected to educate this first-time homebuyer about the differences between condos and serviced apartments. Well, you know what they say—ignorance is bliss until you pay the price.

So, my dear first-time homebuyer, if you find yourself in the dark about the disparities between a condominium and a serviced apartment, fear not! I shall shed light on the matter and equip you with the knowledge to make an informed decision. After all, you're about to make one of the most wallet-draining purchases of your life.

Now, let's embark on this enlightening journey by understanding the basics of condos and serviced apartments. How can we best describe these two creatures? 

I daresay both of them boast multiple stories, a plethora of facilities, and similar unit layouts. Owners get to enjoy shared amenities like swimming pools, gyms, playgrounds, gardens—the works! Plus, they're both governed by the Housing Development Act (HDA) and the Strata Title Act. So far, so good.

You may interested to read this: Secure the home purchase: know the HDA

But here's the punchline: the main difference between condos and serviced apartments lies in their "land use."

A condo is built on a piece of land explicitly designated for "Residential" purposes.

On the flip side, a serviced apartment stands tall on a plot of land that's earmarked for "Commercial" use only.

Because of this land-use divergence, you'll encounter three key disparities between condos and serviced apartments. Brace yourself!

1. Lifestyle

Thanks to the land-use restrictions, condos tend to have limited or no retail options nearby. Consequently, they offer a serene and private environment for residents. Picture this: you'll have the luxury of privacy, with security guards keeping unwanted intruders at bay. 

In stark contrast, serviced apartments are often found in the bustling central business district, rubbing shoulders with shopping malls and various retail outlets. Talk about convenience! But hold your horses; the success of those retail businesses will make or break the value of the serviced apartment. It's a double-edged sword, really. Moreover, the constant influx of shoppers can compromise security and privacy. Although some serviced apartments may lack on-site retail options, those are as rare as a unicorn sighting.

2. Density

To put it simply, condos tend to have a lower population density than serviced apartments. Why? Well, condos' density is based on the number of people per acre, while serviced apartments follow a plot ratio, which calculates the total built-up area divided by the land area. Got it?

Let's say a developer constructs a condo with a population density limit of 500 people per acre. If, on average, each unit accommodates four people in a cozy 750 square feet, the developer can only build 125 units per acre of land.

Now, in the realm of serviced apartments, developers adhere to a 1:4 approval ratio, which means they can construct one acre of serviced apartment with four acres (equivalent to 174,240 square feet) of built-up area. Assuming an average unit size of 750 square feet, the developer can fit approximately 232 units on said land. 

3. Homeownership Costs - The "Cha-Ching" Factor

In a nutshell, owning a serviced apartment is pricier than owning a condo. Why? Because serviced apartments come with commercial rates for quit rent, assessment, maintenance fees, and utility bills (water and electricity). Some developers may try to negotiate lower rates with utility suppliers, but those cases are as rare as a lottery win.

But hold your horses, there's a silver lining! If you happen to be a TNB customer, you can now apply for a tariff change online. Check out the link for those in need. It's a simple process, and it'll be done in less than a week—provided you've got all your documents in order.

TNB Change tariff link

As you've diligently made it to the end of this amusing tale, I trust you now have a clear understanding of the condo vs. serviced apartment saga. Armed with this knowledge, you can choose the option that suits your preferences best. If a tranquil and peaceful environment is your cup of tea, seek out a condo. If convenience and an easy-breezy lifestyle are your jam, a serviced apartment might be just the ticket.

Good luck on your quest, home-seeker! Remember, regardless of your choice, always do your due diligence—study the location, accessibility, neighborhood, crime rate, facilities, amenities, public transport, and whatnot.

May the housing gods smile upon you!