House or Condo is a Wise Investment – Owner’s POV

Hi, I am a proud owner of a condo unit. I bought my first condo unit last Y2012 from SMDC – Green Residences. It’s the condo beside DLSU-Manila’s Andrew Bldg. I saw it as a potential renting space for DLSU students or anyone that needs a place to stay along the University belt. Back then, it was pre-selling which is why I locked it for a total contract price of 2.7M PHP (57, 400 USD). Now (Y2016), as it reaches its turnover date, the same floor size (sqm) as mine but located at a different floor is now being sold at 3.5M PHP (74,400 USD). That’s an 800K PHP (17,000 USD) worth of interest in just a span of 4 years. I bet your bank interest can not do that.

Here are my reactions to the people who said, I made the wrong choice:  

Buying a house or condo unit isn’t cheap, BUT…

• …your rent isn’t either.

Imagine you’re renting a condo unit at the center of Makati or BGC, which will probably cost you P20,000 per month. If you’ve been renting it for 15 years now, that’s P3,600,000 or 3.6M PHP worth of money that could have been turned into your OWN property. But nope, you wouldn’t have a place to call your own, because you chose to rent a space 15 years ago.

• …it could be less expensive when bought at its pre-selling rate.

I know the term “expensive” can be subjective, but let’s keep it at an objective POV by comparing it on an apple-to-apple case scenario. As mentioned in my prologue, a 2.7M PHP turned can turn into a 3.5M in a span of 4 years. I agree that 2.7M PHP is not to be treated cheap. But if you think of it, it is still less expensive when compared to its current 3.5M PHP price. Therefore, the longer you wait, the base prices of properties gets higher too. Five (5) years ago, you can buy a decent studio unit for 1.5M PHP. Now, you need to shell out 2-2.5M PHPfor a decent studio unit. That’s a 700k PHP increase of value. Tick tock. Tick tock.

• …on a worst comes to worst basis, bank loans, in-house financing and pag-ibig funds are there to help you.

Now, I would have to agree with you if your believe that resorting to bank loans or financial institution is a little bit tricky because their interest can blew up and you’ll end up paying double of your loanable amount. But, you can think of it this way: the assumption is you want buy a 3.0M PHP house or condo unit today but you don’t have enough money. Scenario #1: You figure that instead of filing for a bank loan, you will just save the money until you have enough. The premise is you can only save P25,000 per month. That’s 10 years of saving! Since the value of properties appreciate over time, your 3.0M house before will then cost 5.0 to 6.0M due to inflation rate or property value appreciation rate. You’re money will never be enough. What will you do now? Scenario #2: You opted for a bank loan or in-house financing, which will surely ask the double of your loanable amount. Assuming they agreed for a 20 years contract, you will still pay P25,000 per month but for 20 years this time just to fulfill their requested interest rate. The only difference is that you get to enjoy your house TODAY, not after 10-20 years. Plus, you get to divert your house rental fees into your very own home investment.

• …but at least, its a tangible investment that appreciates over time. 

I’ve thought it all too well. I want the safest and tangible investment which I could put my money into. My only condition is that it needs to have a potential of becoming an income-generating asset someday. I initially thought of buying a house and lot but that would cost me a lot of money, possibly at least 4M. That’s why I opted into investing on a condo unit instead. Back then, I didn’t expect much if my money will appreciate over time, as I thought only lot does. I went on anyway because I thought that even if it didn’t appreciate, it will still be a good investment for it will become an income-generating asset for me someday. Oh boy, I was so happy when I found out how much big of a value it increased.

 There are hidden costs when buying a house or condo, IF…

• … your seller did not disclose such information before you reserve a unit or sign the contract.

Find a seller who is honest enough to walk you through all the included cost when buying a property. To give you an idea on those additional costs, check out this article taken from Rock to Riches for it seems to be complete. I salute the writer for stating such facts for they are all true. Those are the things a buyer should consider before buying their very own house or condo. But, calm down and hold your horses. I know that article has a discouraging tone in it, but this doesn’t mean that you should be discouraged in buying your own property. My tip is to confront your seller and ask them to state the TOTAL CONTRACT PRICE (inclusive of all the taxes and hidden fees). If after knowing the total amount of money you need to spend so you can buy and maintain the property (monthly dues included), and you think you have enough money to proceed, then go and buy that property now! The key is to know every bit of aspect and cost you’re putting yourself into before buying a house or condo. Know the totality of it. If you think you can, go ahead!

 

When I bought mine, I made sure that I know all of these things that needs to be considered. I carefully weighed the ups and downs. Despite knowing all those additional costs, I am still happy with the decision I made 4 years ago. Come to think of it, if I haven’t invested my money on a condo unit, then the value of my money wouldn’t have increased to 800k today. I’m not even sure if my savings will be that intact, because spending money on out-of-the-country kind of trips can be pretty tempting too. If you know what I mean. **cough cough air fare seat sales**

Four years ago, I decided for my future. How about you? When will you decide?

If you have any questions related to this article, ask me. You can either drop a comment below or send me a message through our Contact Us page. I’ll be looking forward reading your messages.

PS. I’m not here to convince you to buy your own condo too. There are a lot of investment opportunities out there. Choose what suits you best. Remember the clock is ticking… Tick tock tick tock.