How can you tell if you are ready to purchase your first condo unit? These questions can help you find out.
Deciding when is the best time to buy a condo has always been a never-ending debate especially for millennials, whose worlds are going at a much faster pace. Balancing the thought of snapping up a unit as a long-term investment and the responsibility of emptying one’s pockets for the monthly dues could be overwhelming for some. This could lead to indecisiveness, which ups the risks of making the wrong decisions in the end. This is could be a big step, particularly for those who could only stretch so much to make ends meet. And just like purchasing a house, the most important thing is knowing that you are financially and emotionally prepared for what is to come.
Below are questions you should ask yourself to determine if it’s the time is right for you.
1. Do I have a healthy financial standing?
You would not want go to war unequipped, just like you would not ever plan to buy a condo if you do not have the enough resources. First things first, do you have a stable source of income? How about savings? These would determine your capacity to settle a sizable downpayment and the monthly mortgages.
There are options that can partially ease the burden on your pockets, such as going for rent-to-own units, home loans, and other financing options. Still, these demand buyers to have an actual savings and be more or less free of other loans like credit card debts. This is why it is important to make sure you have enough financial headroom once the bills start piling up at your doorstep. Remember, snapping up a unit takes more than just willingness, it requires commitment and discipline.
2.Have I done my research?
Dan Barnabic of Market Watch said there is no one way to predict with any degree of certainty when the right time to buy is. However, he noted that it pays to check official government statistics and findings regarding interest rates and surplus of unsold real estate to give you a background on the real estate market. In this case, he stressed that the right period to buy is when condo prices require no more than one-third of your annual income to cover mortgage payments, maintenance fees, and real estate taxes. It could also be a go-signal when you are able to obtain a mortgage at an affordably convenient interest rate.
Meanwhile, if for instance you already know which condominium to buy a unit from, you should review the payment terms your developer may impose. Some real estate developers may offer flexible payment terms for their ready-for-occupancy (RFO) condo units, which may include discounts in upfront down-payment or spread-out down-payment. For instance, a developer may offer a ready-to-move-in condo unit for just an upfront payment of equivalent to 5% of the property’s selling price, with 15% payable within the next two years and the remaining 80% to be loaned from a bank after the period. Other developers may require you to make a 20% initial deposit. If you are in luck’s way, you might just find developers with flexible payment options.
Be sure to also check and ask for other “hidden” costs, as others may call such fees. Financial adviser Salve Duplito was attributed in a report saying that these costs are often overlooked by most buyers.
Then there’s also the matter of condominium fees to think about, which is dependent on the size of the unit you will purchase. In Metro Manila, condominium fees range from Php60 to Php100 per square meter per month, so if you own a 36-square-meter condo unit, expect to pay between Php2,160 and Php3,600 per month.
3.Have I found the right location?
While condominiums are usually placed in ideal places, it is still up for the buyers to pick the best location for their convenience. If you are planning to live in the unit you are eyeing to purchase, then you should consider the proximity of the condominium to the places you commonly need to go such as your workplace, business establishments, and schools.
However, there is one thing to consider also in finding the right location: some parts of Metro Manila, especially in the business districts of Makati, Taguig, Pasay, and Quezon City, have some of the most expensive condominiums, according to a study by Lamudi. Thus, for those with tight purse strings, the best place to get a condo is in outer fringes of the metropolis, such as Parañaque, Las Piñas, and Marikina, which have the most reasonably priced condo units.
4.Is it the best option for me?
For some, the sky-high lifestyle in a condominium just wouldn’t feel right. This is a concern that demands careful analyzing, especially if you think about the disadvantages of buying a condo. Would condo be a better choice for you or should you go for a house and lot? If you are looking to have a place to call home that you can pass on to your children, then purchasing a unit should not be looked at as a financial investment but rather a life goal. In this regard, you should invest instead in a landed house. However, if you are looking to get a property for the purpose of financial gain, then investing in a condo would undeniably be the better option given its lower upkeep cost.
After analyzing your financial capabilities and sorting your priorities, you can already determine if it’s really the right time for you to buy a condo. Just remember to never rush things. Don’t be fooled by the supposed great deals thrown at you, the same way you don’t pounce on the first viable option laid on the table. Be patient, and review your options. After all, every bit of planning to finally moving in to your new condo will be at your own pace, as time will always be on your side.