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clock 23-09-2021
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What’s the Difference Between SoHo, SoVo and SoFo?

SoHo, SoVo and SoFo have one thing in common; they’re designed for commercial use. They each have their own distinct characteristics which set them apart from each other. Let's take a closer look at each development to learn about its similarities and understand how to make the most out of it.

Property Similarities

These properties are usually found in high-traffic areas of a city where most companies and commercial transactions take place. They are frequently located around or adjacent to high-density sites such as shopping malls.

Single working millennials, young couples, and young families wanting to start homeownership are likely to favour them because of their residential condominium-style features.

Since these units are all commercial-titled, owners must be prepared to pay the unit assessment as well as commercial rates for water, electricity, and telephone. Bear in mind that these rates are often higher than those in residential areas.

Property Differences

By having the typical Sales and Purchase Agreement (SPA), SoHo’s are protected by the Housing Development Act (HDA) because of its commercial title. Most SoHo’s are then utilized for residential purposes.

However, the lack of a standard SPA for SoVo and SoFo units may be a source of concern for potential purchasers.

Interested in getting your own SoHo, SoVo and SoFo units? View our extensive database of property listings here!

To know which type of property you want to pursue, let’s delve deeper into what each development means, and how you can best utilise them to fit your urban livelihood.

What is a SoHo?

SoHo is an acronym for ‘Small office, Home office’. SoHo units can be used as either offices or homes.

Young singles, newlyweds, and emerging professionals usually prefer staying in SoHo units for the convenience of combining their living and working spaces. These strata-titled commercial premises may serve as both a residence and a place of business. In most cases, their small sizes are the result of a synthesis of economic and lifestyle factors.

Thanks to its innovative interior design, SoHo’s doesn’t require huge floor surfaces and typically comes with a living room, bedrooms and bathrooms.

What is a SoVo?

A SoVo stands for ‘Small Office, Virtual Office’. This small office is typically fully equipped with telecommunication and infrastructural facilities.

It enables businesses to get up and running right away. SoVo buildings do not have as many residential-style facilities as SoHo or SoFo buildings.

It's important to remember that this property is exclusively for business use only since you can't utilize it for living purposes. As a result, if the management does not allow it, owners do not have the right to stay in the property overnight!

What is a SoFo?

The term ‘SoFo’ stands for ‘Small office, Flexible office’.

As the name implies, a SoFo is a small unit that offers its owners more flexibility in how they utilize their space; whether it's for residential or commercial purposes or both. A SoFo will usually have condominium-style amenities within their buildings.

Every unit includes an interior partition (a removable wall) that allows owners/occupants to customize or fit out their apartments as they see appropriate. If extra room is needed, owners can purchase two units side by side and link them inside.

Given that SoHo, SoFo, or SoVo units are commercial properties, they are thus subjected to different homeownership metrics than purely residential properties.

While this isn't always the case, the maximum loan margin for SoHo, SoVo, and SoFo properties is generally lower than that of residential loans, which is typically 90 percent. Their loan tenure is frequently shorter too (around 25 to 30 years).

It's worth noting that because your properties are commercial, it's not subjected to the same 70 percent maximum margin of finance restrictions that residential loans are subjected to after the third property acquisition and beyond.

If you’re in doubt, be sure to verify with the property developer and the bank issuing your property loan for more details and any discrepancies regarding your loan agreement terms.

The views and opinions expressed in this article are those of the authors and not intended to malign any company, individual or necessarily reflect the official policy or position of any agency or organization. Focal Times is a subsidiary of Maxworld Consulting Sdn Bhd, a regional organization founded by a mixture of agile and experienced corporate finance, venture capital and industrial experts. This establishment focuses on sharing current banking affairs, latest property developments and updates and more.

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