Advantages And Disadvantages Of Owner Occupancy And Tenancy

Published: 30th April 2010
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Housing tenure is a term used in residential real estate to define a type of ownership an individual or group has on a type of housing. On today's market, there has been many forms of housing tenure, from housing cooperative to condominiums and public housing. Other than these types of housing tenures, its most basic forms include owner occupancy and tenancy.



Owner occupancy and tenancy are the most basic and common form of housing tenure. According to many Real estate Philippines experts, owner occupancy involves a person or group that occupies a house owns the building (and usually the land on which it sits), while tenancy involves a landlord who owns an apartment or building rents the right to occupy the unit to a tenant. So what are the advantages and disadvantages of owner occupancy and tenancy?



Advantages and disadvantages of owner occupancy

Because the owner owns the house, he/she has the right to modify the building and land as they please (although some may be subjected to government, homeowner association, and deed restrictions). Owner occupancy also protects them from eviction, and creates a right to occupation which can be inherited.



However, houses and the land they sit on are expensive, and the combination of monthly mortgage, insurance, and property tax payments is greater than monthly rental costs. Buildings also gain and lose substantial value due with real estate market fluctuations, and selling a property can take a long time, depending on market conditions. According to Real estate Philippines experts, compared to renters and absentee landlords, owner-occupiers are sometimes seen as more responsible toward property maintenance and community concerns, since they are more directly affected.



Advantages and disadvantages of tenancy

Compared to owner occupancy, people wouldn't have to invest too much capital on their house (or unit). People could easily find residence through tenancy. However, there are several adverse effects to tenancy. Tenants have to pay the landowner even though they are doing all of the agricultural work. In a sense, it is a cycle where the tenant is never really able to become a landowner because they constantly have to pay the landowner, as well as other expenses.



However, according to many Real estate Philippines experts, rural tenancy has its advantages. If a person owns too much land for just their family to use, tenants can rent it and make use of the land. Also, if a landowner rents out the land, it can be a source of economic income for the tenant which may not have previously existed. In poorer communities, rural tenancy can give the tenants a chance to grow crops to sell in markets and to feed their families.


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