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Advantages And Disadvantages Of Owner Occupancy And Tenancy

The main difference of owner occupancy and tenancy are its form of ownership. However, other than the type of ownership, there are also other differences between owner occupancy compared and tenancy. This involves its advantages and disadvantages.


In residential real estate, housing tenure is one of the most widely used term to describe a form of ownership. There are many types of housing tenure used in the industry, the most while frequently used are the owner occupancy and tenancy. So what are the difference of owner occupancy compared to tenancy?

The main difference of owner occupancy and tenancy are its form of ownership. According to many philippine real estate experts, owner occupancy involves an individual or group of people that owns a house and the land which it sits while tenancy involves rents paid to land lord. There are several other differences of owner occupancy and tenancy. These involves its advantages and disadvantages.

Advantages and disadvantages of owner occupancy
Compared to tenancy, home ownership gives occupants the right to modify the building and land as they please, although sometimes this is still subject to government, homeowner association, and deed restrictions. Owner occupancy also protects them from eviction, and creates a right to occupation which can be inherited. In some jurisdictions, it also confers certain legal rights with regard to abutters. However, houses and the land they sit on are usually expensive.

Owner occupancy involves a lot of investment, from the house itself as well as the land it sits on. Combined with monthly mortgage, insurance, and property tax payments, the cost of owner occupancy is greater than monthly rental costs. According to many philippine real estate experts, buildings may 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. This can make home ownership more constraining if the homeowner intends to move at a future date.

Advantages and disadvantages of tenancy
Tenancy or commonly known in the industry as leasehold estate is a form of ownership in which a lessee or a tenant holds real property by some form of title from a lessor or landlord. The advantage of leasehold estate or tenancy over owner occupancy is its affordability. For a small amount of capital, people could easily find a place of residence. Mortgage and taxes aren't also the a problem for most tenants. However, there are several adverse effects to tenancy that many people have criticized about.

According to many philippine real estate experts, 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. If a crop does not flourish, the tenant will still have to pay for the use of the land. The landowner, since he is ultimately owner of the land, also can have a say in what the tenant uses the land for or what he can or cannot grow.

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