Real Estate Investing 101: Reminders before Buying Condos in the Philippines
Many businessmen prefer grabbing opportunities which will not make them involved in the actual process of the business. However, there are also times which could be the start of a long-term quest to financial freedom, no matter how hard.
Then there's real estate; particularly, condominiums which as we can observe, is a reason for a major craze nowadays. There must be good money in there.
The first challenge that one must overcome is the lack of knowledge. So, before doing anything else, it is a must to supply yourself with enough information. Aside from these, there are also things that must be kept in mind. Here are some:
Everyone in the real estate industry has been told this for many believes that this is one of the first things they learn. Some also say that there are only 3 things that matter most in this business which, according to them refers location, location and location.
However, this is not entirely true because if you are looking to buy a condo for investment, your choice should also depend on who your target market is. And that brings us to the next thing to keep in mind.
The Target Market
Here in the Philippines, it is commonly observable with condominium developers that they usually build projects for specific groups of people. This means they already have specific targets even before they launch their projects.
Some condo developments may offer units that cost higher than units in other projects while some offer units that are priced a lot lower than the others. But, just because some projects are located next to each other, doesn’t mean you can already compare them fairly based on price alone.
This is because some condominium projects are built for the average peole while some are built for those who got ahead in life. In short, they are not built equal.
So if you are being wise in your real estate investing, it is necessary for you to do your research and find out about the trends in the industry and the market. Do this carefully so that you will be able to target the right market.
Timing is one of the key elements in real estate investing. It is so important that it could potentially end up stuck with a useless property when not handled proprly. One that will never produce a return on your investment for the next decade.
Part of getting the perfect timing is making sure that the condo property you buy will be available for your target market at the right time they are expected to need it.
Now, you have to be really serious about time frames. This just means you’re gonna have to make sure you only deal with a reliable developer. One that is already known to deliver their promises on time.
The Project Developer
When it comes to investment, time is our single most valuable resource. Unlike money, we don’t get to generate more time. That is why it is really important to be mindful when spending this very valuable resource.
So, when buying a condo unit in the pre-selling phase, (meaning while the building/s are still being constructed) you need to make sure that your developer can deliver your unit at the exact time they promised. Be careful because even though there are many developers in the Philippines with good track records in hitting their deadlines, still, there are also lots of them who will just cause you terrible headaches. So, choose wisely.
Aside from delivering on time, also ask around and check for yourself the quality of work different developers deliver. It’s a given that some projects are priced lower, but that doesn’t mean your developer can just take shortcuts and compromise the quality of the buildings they make in order to save costs.
It’s one of your tasks as an investor to check on these things to make sure you get the most value for your money… Especially when the money you’ll be using for your investment is not free. By that, I mean money that bears interests and other charges, like a loan from the bank.
The Payment/Financing Options
When speaking about serious money investing in condo properties, it is important to learn about the word “leverage“.
Leveraging is about using as much of other people’s money and as little of your own money as you can, to buy your real estate investments. So, when you leverage wisely, you’ll be able to buy more or bigger properties even with the limited funds you have on your own.
Contrary to what most Filipino believe in, it is never required to be a millionaire first before you can start investing in real estate. In fact, most condominiums in the Philippines today especially in the major cities, cost millions of pesos at the very least.