4 Things to Consider Before You Buy A Condo For Investment
A lot of condo buyers are getting into property acquisition for a common purpose: to have supplementary income by renting out the unit. And as much as the cliché bigger is better goes, more discerning condo buyers are raking in more returns by investing small.
Here are 4 things to consider if you are contemplating about rental condo investing.
1 Exactly How Big Is The Price Tag?
For condo buyers who are thinking about property investing, be wise to assess the pros and cons before shelling out the funds to buy.
Look at the price per square meter. Larger units are more expensive and will require you to pay VAT and top of the condos’s contract price. In assessing the condo’s price tag, determine how you intend to pay for the unit: cash, bank loan, or in-house financing.
If the goal is a healthy investment return then paying for it in full sooner than later is the scenario you should be looking at. If you’re paying via bank loan, keep in mind that the higher the amount you loan, the longer the loan term which leads to higher interest payments.
2 Check Fixed Expenses
Once you have the unit, after assessing the major costs and payment schemes, consider the expenses that go with owning a condo such as association dues (which is based on unit size and is paid monthly). The advantage of owning smaller units is that these fees are more manageable.
3 Calculate Your Costs For Improvement
Make your rental condo stand out by investing in its interiors. Smaller units also have an advantage here because the quantity of materials needed to enhance your space is much less than for a larger unit. This gives you the opportunity to choose better quality materials as well. Tiling a one bedroom unit with travertine tiles would be cheaper as opposed to a two or three-bedroom unit.
4 Small Units Mean More Room To Play
If you have funds to buy several condos, do so. Do not put all your eggs in one basket. Say you had P10M to buy a property, you can use that to buy one big cut condo in a prime location like Makati or BGC, OR you can opt to buy four smaller units at P2.5M each in areas that still have a healthy rental market. The likelihood of you getting a renter is higher since you have more units to play with. Having multiple smaller units give you greater flexibility to maneuver your assets in the condo rental market.
This story first appeared on CondoLiving 2015 Vol. 10.5. Edits have been made for CondoLiving.OneMega.com.