man opening the door to his dmci homes condo unit

‘No Spot DP! No Reservation Fees! Own a home today for as low as P3k per month! Only 5K to move in!’

Does this seem familiar? It’s a common enough advertising pitch employed by many sales agents eager to entice first-time buyers who are hurrying to secure their own piece of real estate. The offer can be compelling, promising the dream of homeownership without the immediate financial burdens.

But as the saying goes, if it’s too good to be true, it probably is. In the world of real estate, there’s often more to the story than meets the eye. Behind the catchy and colorful advertising and seemingly irresistible deals, complex costs can catch even the savviest of buyers off guard.

In this article, we’ll talk about the ‘hidden’ costs of property ownership that aren’t always disclosed by agents but are crucial for potential buyers to comprehend. Once that’s all said and done, we’ll let you know how property is done properly.

The expenses that you know about

Ask anyone with zero experience in real estate about what they can expect to pay when they buy a home, whether it’s a house or a condo, and they’ll all likely give you just two answers: the down payment and the monthly amortization.

These are the two most obvious upfront costs, and they can seem manageable when presented with catchy slogans, minimal down payments, and affordable monthly installments. But these familiar expenses are only the tip of the iceberg when it comes to the financial commitments of condo ownership.

Some homeowners call this their ‘second mortgage’

It’s important that when you’re diving into real estate investments, the first step you make is looking at condos with a reputable developer. An efficient broker will be able to tell you the expenses you should be aware of and make the buying process much easier.

Other buyers aren’t so lucky and only find out about the costs once they’ve agreed to sign on the dotted line. Here are some of the one-time and recurring expenses that can make up your ‘second mortgage.’

Reservation Fee

As the name suggests, the reservation fee is the initial payment required to secure the unit you intend to purchase. It’s a non-refundable cost you must pay upfront, even before finalizing the down payment. Some agents might promote ‘no reservation fees’ in their advertisements, but this isn’t always the case, and it’s essential to clarify this detail early in the buying process.

Move-in or Closing Fees

Closing fees cover various administrative and legal costs incurred in the final stages of the property purchase. Closing costs commonly include title transfer fees, notary fees, attorney’s fees, documentation preparation fees, appraisal and inspection fees, and utility line connection charges.

Closing fees can vary widely depending on the condo development and your unit. Some developers can charge a fixed amount, while others will base the amount on a percentage of your condo’s total contract price (TCP).

Real Property Taxes (RPT)

Property taxes are a recurring expense for any homeowner. These are imposed by the local government unit (LGU) and are typically based on the assessed value of your property. While you only pay taxes once a year, remember that different areas have different tax rates that can change over time. Yours can increase, potentially leading to higher annual expenses.

Monthly Condo Dues

Condo living in developments like DMCI Homes comes with the benefit of resort-inspired amenities and services, which are conveniences that come with a cost. Your monthly condo dues cover these. Fees vary widely and depend on your unit’s size and the amenities offered. It’s important that you budget these expenses, as they can increase over time due to inflation and maintenance requirements.

Can you avoid paying these extra charges?

Short answer: no. Condo living is a lifestyle that you have to be willing to pay for, more so if you want to own property in your ideal project. However, you can employ several strategies and approaches to manage these expenses.

Do your due diligence

Before you commit to a condo purchase, conduct extensive research on the property and the associated costs. Look for reviews and feedback from current residents or new buyers to gain insights into the developer, maintenance, and any hidden fees they may have encountered in the buying stages.

Budget your expenses

Create a comprehensive budget for all foreseeable expenses, including your monthly amortization payments, association dues, property taxes, and insurance. Setting aside funds in advance can help you avoid financial surprises.

Build an emergency fund

Maintain an emergency fund to cover unexpected expenses, like repairs or renovation costs.

Do #PropertyDoneProperly with a Property Advisor

A reputable advisor can help you understand the full scope of condo ownership costs and guide you toward making sound financial decisions. With the right knowledge and approach, you can achieve the dream of condo ownership.

Get in touch with our property pros here and secure your piece of real estate at DMCI Homes with confidence.

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