7 Signs that you should not buy a Property Now
The Philippines property market is at high right now. With the build build build program of the government, good governance and good credit ratings of the country, many were encouraged to invest. And that means investing in the Philippines. More investments came in thus more jobs are being offered and more people are getting their lives better.
As the country slowly aligns all the projects and programs in the government, more and more people are hyped to invest and purchase real estate properties most especially houses to live in. Although investing is highly recommended there are instances or situations in life that you should consider, and why you should not buy a property today.
1. You can’t afford it (yet).
Buying a house or a property simply because you like it is not a wise decision. If you are earning 30,000 per month you may buy a property with a monthly amortization of 9,000 pesos per month or less. Yup, that’s a fact. Fit your desire to your budget. It’s never wrong to dream big, and your dream house may be too pricey for you now. It’s never wrong to aim for that in the future. But if you want to buy now, check your budget. Because in reality, banks and financing institution will look into your monthly income and approve your loans according to what they think you can afford. And that’s mostly 30-40% of your monthly income.
2. You have more expenses than your savings
- Minimize your expenses
- Check the expense that consumes most of your income
Or simply live within your means. From your income, the 30% of it should be non-negotiable for tithes and savings. It shouldn’t be touched or spend for something else. Then the remaining 70% should cover your expenses, which includes travel, food, clothing and more. More importantly, from your 70%, 50% of your 70% should cover your house amortization.
Many developers today offer financial literacy before they allow buyers to reserve their property. This is to make sure that they do understand that buying a house is a big responsibility and probably a big cut from their monthly income. As a responsible developer, they have to make sure that once you start your investment you won’t put it to waste by discontinuing in the middle of the journey.
3. It’s complicated. If you are not legally separated do not buy a property (yet)
Be honest about your current civil status. Buying a property is not like buying a cell phone where you have an absolute ownership of the product as long as you have your name on the receipt. If you are single, you have an absolute ownership of the house if the property title is under your name alone.
However, if you are married all properties purchased before and after marriage are conjugal property. The properties purchased before marriage are considered conjugal if the couple got married after 1987 (See Family Code 1987.IV- PROPERTY RELATIONS BETWEEN HUSBAND AND WIFE Chapter 1 Art76). Buying one secretly under your name gives the other half a right to claim their share when you die (or if he dies) and that also includes rights for the children outside marriage.
4. If you don’t need it now or you don’t know your purpose why you are buying one.
Whenever someone asks me about buying a property, I always ask them why in the first place. Validating the reason why they wanted to spend so much on a property for investment is one of the responsibilities of an Investment Property Endorser.
What makes it not valid? Buying a property is a long-term commitment, if you wanted to buy now just because it’s what other people are saying then you should not buy. Because a half-hearted homebuyer may just waste his/her money in the middle of the journey. [Learn more about refund requests]
5. The economy is not doing good.
When the economy is doing good, bank loan interests are low. But when it’s bad, Bank interest is too high. When the economy is good, banks offer the lowest possible interest rates in the market. When the bank rates are low, banks encourage people to loan out to keep the bank cash flow healthy. Too much money stored in banks are not good that’s why they encourage people to apply for a loan by lowering the interest rates. That way, they’ll gain more as profit.
And since the economy is really doing good now, you should take advantage! [Read about the The 20 best countries around the world to invest in now]
6. When you are peer pressured
Buying properties because your friends are buying or your parents and relatives pressured you to do so is absolutely wrong. It’s true, prices of the properties change from time to time. The property you have been eyeing for today may increase in price in the few hours or so. But deciding to buy because of peer pressure is not a good attitude in owning a property.
Buying properties is a major life commitment that you have to be responsible for. It’s like getting married, the commitment is real and could probably last a lifetime. Buying with half-baked decisions might lead to waste of money, waste of time and waste of other resources.
Remember, if you chose to discontinue the purchase in the middle of the contract, may cost you much. Other than that the money paid in equity and/or downpayment are absolutely non-refundable and non-transferrable. The only time they can do the refund is if it’s the developer’s fault. [Read more about Requesting a Refund here]
7. You haven’t done your research.
Not doing research on the project and property that you are about to purchase is like playing the lottery. Getting the jackpot is merely out of luck. It is best to always seek assistance from Property Endorsers and real estate practitioners to guide you in choosing a property to invest in and help you assess on whether or not you are ready to purchase a property or not.
If you are in this situation right now, I would highly recommend to sit back, think about and relax. Buying properties or owning one is not a race. It’s a commitment that will surely change your lifestyle and way of living completely. If you don’t want to waste resources, fix your issues first (most especially legal separations) before choosing to purchase or own a property.
Thank you to all brokers and agents who participated in this collaboration. Feel free to check them out in their Filipino Homes profile and social media accounts.
If you need some advice, contact any Filipino Homes Property Investment Advisers/Endorsers today!
Charmaine Xy-Za Yape is a founding member and a blogger of Filipino Homes. She is also a PRC and HLURB Registered Real Estate Professional and a Licensed Financial and Investment Advisor. She is an International Realtor member and a Hubspot certified in Inbound Marketing. She is also the co-founder of Iligan Bloggers Society, Inc.