Real estate has always been a lucrative investment. While a lot of Filipinos are interested in tapping both investment and home ownership opportunities in this sector, it may seem daunting for those who are doing it for the first time. Fortunately, there are steps that you can take to help you make informed choices as you seek your first property purchase or investment.
Educate yourself on the market
“I believe the most crucial step is education. I always tell my clients to research the market thoroughly. Understanding current trends and neighborhood dynamics is vital,” Canada-based realtor Kyle Bazylo said.
“I think starting with local market reports and attending open houses can provide a good sense of what’s available and at what price points,” he added.
As not all property seekers may be well-versed on trends and concepts in the real estate market, educating themselves on the matter would be a wise choice to make before entering the investment process, according to Martin Boonzaayer, CEO of US-based The Trusted HomeBuyer.
“The market can be overwhelming. Read books, listen to podcasts [real estate podcasts for beginners], and talk to experienced buyers and real estate professionals. Understand key terms like amortization, escrow, and capital appreciation,” he said.
Understand your budget and financial capability
Investing in any kind of real estate requires financial commitments. It is vital to ensure that you have the financial capability to do so before making any investment.
“Before diving into the real estate market, it is essential to have a clear understanding of your budget and financial situation. This includes determining how much you can afford for a down payment, monthly mortgage payments, and other associated costs such as property taxes and insurance. It is important to be realistic about your budget and not stretch yourself too thin, as this can lead to financial strain in the long term,” said Alex Capozzolo, Co-Founder of Philadelphia-based Brotherly Love Real Estate.
Aside from the purchase price of a property, Capozzolo said property investors should also understand that there are various other costs involved in buying real estate, such as closing costs, legal fees, and home insurance.
“It is vital to have a thorough understanding of these expenses and factor them into your budget when making decisions,” he said.
Moreover, Capozzolo emphasized that it is crucial to consider your long term goals before purchasing a piece of property.
“Are you planning on living in this property for an extended period or using it as an investment? Understanding your intentions can help guide your decisions and ensure that the property aligns with your future plans,” he said.
Location is key
Buying a property in the right location is always key, according to Colliers Philippines Director for Research Joey Roi Bondoc. He stressed that property investors should look for a property that is situated in or near a location with good rental and price appreciation potential.
“While being in a masterplanned community has become a popular option, it is also important to choose a location that is near public transportation and infrastructure projects. These are important especially if you decide to flip or resell your property in the future,” Bondoc said.
He also suggested locations that offer greener and more open spaces, noting that this is a rising trend, according to results of previous Colliers Philippines surveys.
“Look for projects with strong rental and high occupancy prospects once completed. It is crucial for investors and end-users to scout for residential projects that can be leased out to employees, students, and young families once turned over,” Bondoc added.
Choose a reputable developer
Just as important as the location of a property is choosing a property developer that can deliver a quality product.
“Buy from a developer that will produce a quality product on time. If they say they can turn over a unit in four years, they should be able to do so without questions. Developers should be able to deliver based on what they promised, including finish of the residential unit as well as amenities,” Bondoc said.
Bondoc also suggests that property buyers should be on the look out for attractive promos offered by developers.
“Developers are offering attractive and innovative promos right now, whether in the pre-selling or secondary markets. Make sure you look around for the best promo that developers offer – especially for ready for occupancy (RFO) units,” Bondoc said.
“Look for extended down payment terms, early move in, heavily discounted downpayment, etc. Some developers and banks are also offering free appliances and discounts for parking spaces. Search also for the bank that offers the most attractive mortgage rates and discounts,” he added.
