Nowadays, Filipino millennials—people aged between 25 and 34 years old—are the ones shaping the real estate industry. In fact, in a survey commissioned by ZipMatch, about 49% of millennials are ready to buy their first home be it a condo unit or house and lot.
If you are a millennial contemplating whether to buy a condo unit near your workplace or rent still, read on. There are some things you need to know first to see if you are better off renting or purchasing your own place.
While you may think that you can afford to buy a condo unit now, you have to look at your capacity to buy first. Have you already saved for the down payment? Do you have an emergency fund? Can you really afford to buy now?
The costs of ownership don’t stop when you move in finally. No. In reality, you can only move in after you pay the condo association joining fee, advanced monthly dues, building insurance, real property taxes, and utility installation. These are one-time or annual payments. What about the monthly fees?
You need to accommodate all these financial obligations. If it’s not possible at this time, renting is the better option.
Your career outlook is vital. What if you suddenly lose your job? Do you have alternative income streams? If you have an emergency fund, is it enough to cover all the bases until you find new employment?
Bottom-line, if you are currently living from one paycheck to another, now is not the perfect time to even consider buying a unit.
What you should do is build your emergency fund and save up for the down payment. Remember, the down payment is always between 5 and 20 percent of the total price of the unit. For instance, in Amaia Skies Cubao, the down payment for the units ranges from 10 to 20%, depending on the payment option you choose.
Are you on a work assignment? Are you planning to work abroad in two years’ time? Or, marry and start a family in a couple of years? You need to assess your current situation and the likely changes in the future.
Buying is not for those who have a short-term mindset. It’s a high transaction commitment. Thus, if there will be significant changes in your life or you are currently going through a life transition, it would be a wise idea to rent.
Buy if you have the financial capacity to pay for the additional costs of owning a condo unit and plan to stay in it for at least five years. Five years is enough time to generate a return on this hefty investment.