Owning a condo is a big commitment, and if you’re a first-time buyer who believes you’re ready to take the step forward to home ownership, keep reading!
It’s every person’s dream to own their own home, and this guide will share some tips about the best time to buy, what you ought to buy, and how to get started on actually buying property. Learn from the insight of experienced buyers and expert Property Advisors on how you can achieve your condo goals this 2023.
When is the best time to purchase a condo?
You’ve done your research, but when is the best time to purchase a condo? Property is always a good investment as it appreciates over time, especially in a desirable location near Central Business Districts. But there’s really no one-size-fits-all answer as to the best time for you to buy, as this ultimately depends on your purpose and financial stability.
Do you plan to live in the condo or rent it out for income?
If you have plans to live in it, make sure you have savings to fall back on if something hinders your ability to earn. But if you’re renting out the condo for income, a rule of thumb is to not rely on the rent to pay your monthly amortization.
Consider if your condo is preselling or RFO
Preselling condos are condos that are still under construction and won’t be turned over to you for a definite time. It might take a year or more before you’re given the keys, so if you’re looking to move in right away or want a means to rent the place out, RFO (ready-for-occupancy) condos might be better for you.
RFO units tend to be more expensive, while preselling ones often come with more discounts and flexible payment terms, up to 36 months, although this varies from developer to developer.
Some developers also offer rent-to-own payment terms, which means paying both your equity (payment to the developer) and financing (loan borrowed from the bank or from the developer — this is called in-house financing) simultaneously for a certain period.
First steps to condo ownership
One of the first things you need to do is look for a condo with a reputable developer, and when you find one that ticks all your boxes, talk to one of their verified real estate brokers to guide you through the process.
What units are available in the project you want? How quick is the turnover? Aside from the down payment, what are the other expenses you should be aware of? How much is the monthly association fee? Are there any closing fees? How much will that end up costing you?
An efficient real estate broker can answer these questions for you and make the buying process easier.
It’s also a good idea to be aware of the recurring charges that come with owning a condo so you can factor them into your budget. Aside from the monthly amortization, here are some other common fees:
Condo association dues: Condo association fees cover the condo’s communal areas, utilities, amenities, and maintenance costs.
Fire insurance: Fire insurance isn’t mandatory for residential properties unless you’re financing through a housing loan. Premiums for fire insurance can go up to P2,000 per year for basic coverage of P1 million.
Real Estate Property Tax (Amilyar): Property taxes are taxes imposed by the local government that owners must pay annually. Parking space is also considered taxable property, so this is something to consider if you’re buying parking space at your condo.
Financing your condo
You can also ask your broker for help with financing. If you’re considering investing in a condo with DMCI Homes, you can go with either bank financing or in-house financing. Interest rates and payment terms vary, so it’s best to do your due diligence to determine what will work best for your budget and ensure your requirements are ready.
But what’s the difference between bank and in-house financing?
Banks are usually stricter with requirements and conduct background checks more thoroughly, while in-house financing may be faster as the buyers receive the decision directly from the seller.
However, banks offer lower interest rates with fixed rates of up to 5 years (10 years for some banks).
A bank loan can be the way to go if you have a good understanding of the housing market and how to refinance your home after your fixed period. You’ll benefit from lower interest rates, though you must know the terms and conditions regarding repayments and the consequences of missing a payment.
There’s a lot of information to process, which can overwhelm a newbie in home ownership. With your DMCI Homes Property Advisor, you can have reliable, credible, and legit expert guidance on the market and help make the best choices as you work toward achieving your dream of owning property.
Talk to your DMCI Homes Property Advisor on the available promos for your target property and go from there, and we wish you the best of luck in your home ownership journey!