For sure, you want to get that New Manila townhouse that you’ve been eyeing for a long time. But hold up for a second! There are so much more things you need to know about real estate in the Philippines other than saving up and paying for the townhouse. Read all about them below.
Evaluation is Everything
Buying a home is much like purchasing any product off the shelf. You have to check their quality in order to know if they’re worth the price. When it comes to real estate and property investment, you could use this checklist as a basis for evaluation:
- Check the Surrounding Area: Try to see if it’s a neighborhood that you want to live in. It could be because your favorite mall is nearby, the village has a relaxing ambiance, or it’s near your office area.
- Time: Time is another factor you must consider. Properties won’t always be available for your taking. This means that you have to allot a time period that you for you to check out the property and decide whether you want to sign the deal or not.
- Comparative Marketing Analyses (CMA): CMA is what home sellersuse to put a price on a property. You need to look at CMAs to know if a home is worth the money.
Finding the Perfect Broker
This is often compared to getting into a relationship. Being able to find the right broker is just like finding “the right person.” While it may take time to do so, the wait should be worth it if this person can help you get your dream home.
Investing in a High End Townhouse in New Manila
To get the best bang-for-your-buck, you may want to invest in a high end townhouse or even a house and lot. For these properties, the max period for the payment plan is 1 year with 0% interest. Also, most of the payments are done through cash and/or bank financing.
Types of Home Loan in the Philippines
Most people get loans from the bank so that they can purchase and/or renovate a home. Here are the two types of loans you can get in the Philippines:
– Conventional: This is the “predictable” type of home loan. Basically, there’s an amount that you have to pay monthly for a set period of time. By getting a conventional home loan, managing finances will be a breeze.
– Flexible: This is a type of loan that is linked to a current account. Every time that a borrower will deposit a payment into this account, the interest could drop. You could also make excess deposits with this loan. The excess will go to your next payment, or you can withdraw it anytime you need it.
Whichever you choose, you have to know that not all banks will shoulder the rest of the cost of the property once you make a down payment. This will depend on the appraised value of the property along with how much you make in a month. Ask how much you can loan from the bank based on the home’s price evaluation.
Closing Costs and Other Fees
This is something that many buyers overlook. Fees such as closing costs, reservations fees, bank charges, among others, tend to surprise buyers. To avoid being caught off guard with these problems, it’s best to set aside 20% of the overall cost of your home to take care of these miscellaneous fees, along with 3-months’ worth of rent. The big advantage of this is that you get to save up for your 4th payment and so on.
To help you understand this better, here are other concepts you may want to know about additional fees:
Real Property Tax (RPT)
Get familiar with the RPT laws of San Juan to make the whole process of buying your New Manila townhouse easier. If you do so, you can learn about the discounts you could get if you get to pay early!
Mortgage Redemption Insurance (MRI)
This is part of what you pay for in a bank loan. Basically, it’s a life insurance that puts the bank as a beneficiary.
Get the Documents You Need
When you acquire a real estate, you would need to undergo verification. You wouldn’t want to get slapped with penalties here and there once you do own the property. To avoid this, look for the following:
– Transfer Certificate Title: Get a “Certified True Copy” of this from the Register of Deeds from the city hall of the property. This is to make sure that it’s authentic and not tied to another possessor (mortgaged).
To do the latter, you can look at the back of the title for the section called “encumbrances.” If this part has no negative remarks, then the property is clean.
Lastly, you can use this to make sure that the land on the title is the property you want to buy. You can do this by hiring a private land surveyor. If it doesn’t match, then you have to confirm and validate it with the Register of Deeds.
– Owner Identification: You don’t need a copy of this, but you have to ensure the sellers of the home are its true owners. Just ask for things like a passport or a driver’s license and check whether they match with the Transfer Certificate Title.
– Tax Declaration and Tax Receipts: This is needed to make sure that the yearly real estate taxes are paid and up to date.
Ways One Can Profit from Real Estate Investments
There are more ways you can use a beautiful townhouse in New Manila other than living in it. You can earn from it by renting it out or by “flipping” it.
Flipping is when a buyer gets a property and fixes it up (furnishing, renovation, repairs, etc.) so that he can sell it after. Flipped homes are more attractive for renters and buyers; this is particularly true for the areas of San Juan and New Manila due to them being prime central locations.
No matter which one you choose to do, you will earn money from the monthly payments of your tenants. You can use this to maintain the property while it’s being rented out. This means that there’s no need to bring much cash out from your end. Just imagine making so much money by renting out a New Manila townhouse, while you’re just sitting comfortably in your own San Juan home – that’s what you call an awesome investment.
You Need Landlord Skills
If you decide to be a landlord, then you need to be responsible. This means you have to do the following:
– Make sure all your properties are always being rented out to have a steady flow of cash.
– You have to be available 24/7 in case your tenants will experience any problems that you need to solve quickly. This will make them trust you and you will have a healthy tenant-landlord relationship.
Work hard to do these things and, as mentioned above, you will be able to, eventually, chill at home while the money comes in. However, if you can afford it, you could consider hiring a property manager to do these things for you! You may want to hire two so that no one is overworked.
Essentially, it’s a lot to take in, but learning all these concepts and adapting them is worth it. Doing so will make you into a great real estate investor.