Buying a condo or any other property is a long-term commitment you must be sure of before taking the plunge. Like marriage, it’s not something you can jump into and simply walk away from if you decide it’s not for you.
Investing in property, especially one with a high price tag, can be an overwhelming experience both financially and emotionally — and this is something that we’ve all seen firsthand in the initial lockdowns of 2020 that tested just how financially prepared we should be when it came down to condo ownership, and property ownership in general.
A stable job with a sizable income is one factor to consider when getting ready to own property. In this article, we’ll discuss what you need to secure before taking on property ownership.
Set your long-term goals first
Some people buy a condo because they’re tired of renting and want a place to call their own — that’s an entirely valid reason.
It’s the Filipino dream to own property, and a condo can be the ideal space for someone who’s independent or couples who wish to be child-free, or even small families that want the security, amenities, and community that a condo has to offer.
But others jump into their desire to own their own space and lose sight of the goals they have for themselves, such as a professional who purchased a house and lot in the province but decided they wanted a life in the big city or someone who invested in property to rent out for additional income but realized they wanted to live the rest of their lives abroad.
Of course, there’s always the option to rent out the property for extra income, but the downsides that come with managing it (like unruly tenants, maintenance work, and filing taxes) aren’t worth it to some people — and again, that’s okay.
But this is why it’s important that before you jump into buying a condo, you need to set long-term goals for yourself.
Ask yourself these questions:
- What’s my end goal in buying a condo? Is it to rent out, or will I eventually live in it?
- Can I afford the monthly amortization with my current income?
- Will I be able to increase my income in x years?
- Do I have enough savings to cover the amortization for a period of time if I lose my current income?
What are the things you need to do or consider?
Setting your long-term goals will allow you to put things into perspective and set your priorities regarding financial planning.
If your long-term goal is to keep living in the city, then buying a condo near the Central Business Districts might benefit you. But if you have plans to settle down and start a family, you may want to consider a 2-BR or 3-BR condo near good schools.
But of course, before you decide to fork out the cash for your condo reservation, there are a few things that you need to take into consideration.
Build your income
Some properties will require you to earn a certain income per month in order to qualify for a bank loan. So unless you’re paying in cash, it’s important to choose a condo that’s within your salary range or keep increasing your income, either through looking for multiple income streams or getting a job that will pay you more.
Consider the costs
It’s especially important to cover your financial bases, as many first-time condo owners only know of the reservation, down payment, and monthly amortization from the bank or other financing options and don’t realize that owning a condo also comes with other expenses.
Aside from renovation costs, you’ll also be paying monthly association dues, annual property taxes, and other fees, which can vary from developer to developer.
New owners who haven’t done their due diligence end up with ruined budgets, as they didn’t account for these additional costs.
Save for the rainy days
Before you invest in a condo, prioritize building an emergency fund. A lot of people ended up having to foreclose on their properties because of the 2020 lockdowns, and unforeseen circumstances like the pandemic is a prime example of how tucking away some savings goes a long way. The general rule is that emergency funds should cover at least 3 to 6 months of your living expenses.
Be secured with insurance
If you’re the primary provider in your household and will shoulder the monthly condo payments, life insurance is also something you need to have before even considering buying a condo.
Insurance protects your loved ones in case something happens to you and can help make sure the condo you leave behind for them doesn’t end up getting pulled under from them.
Location matters, and so does mobility
Do you work from home, or is your company under a hybrid setup? Are you 100% return-to-office (RTO), or are you a digital nomad that prefers to work in different locations? If you go to the office, do you own a car or commute? How close do you want to be to your office or your kids’ schools? How accessible do you need public transportation to be for you and your family?
These are just a few questions you’ll need to consider, and your work setup will likely play a big part in your decision to own a condo — and where to own a condo.
Choose a broker you can trust
Your real estate broker can make or break your condo buying experience.
Many new property owners wished they didn’t fall under the pressure of missing out on a promo, as they ended up with more headaches from unanswered questions, unexpected costs, and delayed turnovers — all of which should have been addressed by their broker but weren’t. So, it’s essential that you talk to a reliable sales agent; ensure it’s someone you can trust and who works for a credible developer.
DMCI Homes Property Advisors are real estate experts that can give you all the information you need for your chosen property — you won’t have to talk to different people when you can talk to one specialist and get all the answers you need.
Have you ticked all the boxes?
Due diligence is important to make sure you get the most out of your condo living experience. If you think you’re financially and mentally prepared for condo ownership, chat with a DMCI Homes Property Advisor or set an appointment to see what options are available.
Check out our DMCI Homes deals for February 2023 to get the best value for your new condo!