The Philippines is a developing and populous country in the world which placed 13th in the latest United Nations Population Division estimation. It is where commerce is rapidly growing even until today. International companies branched their business in the country while some started here and grew globally.
Companies today, such as real estate developers, noticed that the country’s population grew larger in number. So to be able to provide the people’s need for home and office spaces in the city, condos, house and lots, residences and office spaces were built to fit and accommodate their targeted market. However, when real estate and buying your very first unit are new to you, it’s best to have a background of everything that you need to do before that purchase.
1. The Location
Experts say that there are three things that matter most in real estate and that’s location, location, location. But to ask you, is location really important? Yes it is. Everywhere is a good location but it’ll depend on the target market they’re catering their spaces to. It’s important for developers to understand their target market. To appeal with them, they create various living spaces to ease up their lifestyle by constructing their project to the nearest and convenient area possible for the market.
2. You belong to a specific market
A common characteristic you need to know is that projects are built for specific groups of people. This is what we call “target market”. Yes, you belong to a market. This helps the developer build projects that fit according to the targeted markets’ needs or desires.
3. Know the developer
Before deciding, know the developer. Is this important? Yes it is. Know how they’ve managed to maintain or improve their projects and know how they process things from start to finish. Learn how the projects are built and check if legal procedures have been made. As simple as asking about the building specifications to the security made available in the project. You can ask your preferred broker or directly from the representatives of the company.
4. Your Payment/Financing Options
Most condominiums in the Philippines today, especially in the major cities, cost millions of pesos at the very least. But you actually need only a little more than P20,000 to acquire one or even less than that. The usual scenario (and probably the easiest also) for most people who purchase their first condo investment goes like this: Pay ± P20k to reserve a unit. Pay anywhere between 10% to 30% of the total price (depending settled payment scheme) as the down payment (equity).
When they’re done with the equity, they take out a loan from their bank or from HDMF (PAG-IBIG) or from the in-house financing service, to pay the remaining 70% to 90% balance of their unit. Developers are now easing their requirements and they keep lowering their entry points to help get more people to participate in this industry. They’ve also allowed more and more flexible payment terms especially if you opt to use their in-house financing service (most developers have one).
Developers’ in-house financing services usually cost higher but they are also the most convenient and easiest to get approved for. But if you already qualify for real estate or housing loans from your bank, this is usually a smarter choice for investing since you’ll also be building your credit record as you use banks’ services. As you progress and build a good credit record, you will be able to use more money from the banks for more investment resources in the future. Plus, interest rates for bank loans are a lot lower than in-house loans.
5. Develop a Long Term Plan
Buying a condo unit is just the first step yet a great way to keep going forward is following a long term plan. You may already have a short to mid-term plan in mind when you buy your first property. From there, extend and expand your plan. Build on it and make it SMART (Specific, Measurable, Attainable, Realistic and Time-bounded).
A more stable strategy for the long term is building cash flow. That means keep buying more and more properties and rent them out to pay for themselves through regular monthly income. But you can use the previous/existing properties you bought as collateral for taking out more loans. Make use of additional, compounding leverage by borrowing more money to buy more properties, which will in turn generate more cash flow for you. Do this seriously and your investments will have a snowball effect.
6. Keep Yourself Updated
The part of keeping a good long term plan is to update your plan as you go along. Make sure your plan will adapt to the changes in the market. If you want to keep the cash flowing, you have to offer what’s currently being asked by the market. When you hear about some bad news (like unemployment) on a city where you have rental condominiums, you could lower your rates temporarily rather than suffer long periods of vacancy.