BY Wynndee Alejo ON Aug 30, 2021
Paying bills, doing your own laundry, cooking
instead of dining out and choosing to have wine or tea session instead of
Friday night outs, sounds familiar? Yes, you’re passing the bridge towards
While these things are easy to manage, you will realize that you will have to make decisions that could be life-changing – and this includes choosing between renting and buying a luxury condo in Makati.
While it may seem to be a simple task, you’ll become conscious that it isn’t as simple as choosing to cook your own meal or to dine out. As with other life aspects such as choosing your life partners, when you’re making a decision that will have a long-term effect, you need a more serious contemplation. So, should you buy or rent a high end condo in Makati?
Capacity to Pay
First things first. Your first consideration is the cost. Whether buying or renting, it will involve paying and it will take a big part of your budget. Some say it is better to buy a house that to rent because eventually the property will be yours. But, have you computed your monthly expenses? And the money that you will allot will determine the property you can afford. Check the prices first before even looking at property listings at Earthauz.
Do you have an emergency fund? Ideally, you should have an emergency fund which is three to six months’ worth of expenses and that will include your expected monthly amortization. This is to protect you in case you lost your job or anything that gives you income.
If you are still building or planning to have an emergency fund, then renting might be the better choice because monthly rents are usually cheaper that monthly mortgage or even amortizations because you don’t need to pay property taxes. And in most cases, the landlord will shoulder the maintenance costs of the house. However, look carefully on your rental contract as it can indicate an increase every year. Your landlord might also add additional charges like for garbage collection, pest control, aircon cleaning etc. If you decide to rent, you need to prepare the following possible upfront costs:
Usually, young professionals settle on renting given that their income won’t be enough on buying a property. But have you ever made a comparison? Check this out:
· Rental fees versus the monthly down payments on a property. An average rent of P8,000 a month will amount to almost P200,000 in two years – the common duration for staggered down payments of most properties. This amount is commonly 10 to 20 percent of the total contract price of a reasonably priced property for sale.
· Rental fees versus the monthly mortgage payments. In the same way, the amount of monthly rental fee is somewhat close to the monthly payment if you are going to have it on a loan – whether bank or other financial institutions.
Do you ask yourself, where do you see yourself in five years? Well, you often hear this question during job interviews, but it also applies when you are going through adulthood and when making property-related decisions.
· Career or Business. Your career or business would determine your financial capacity to buy or rent a property. If you are certain to stay in a company for several years, then you can budget your income properly without worrying to buy a house. But if you are not sure about your career stability, renting might be the better option.
Another thing is if you have a business that gives you a stable income. If you’re confident that you have a bullet proof business, then go and buy that property! Otherwise, you might want go the option of renting.
· Family. Are you marrying soon? Or married now and planning to have a baby? If you are in these paths, maybe buying a house makes more sense as it will give you the security and stability in the long term.
Now, choosing whether you’re going to live in a condominium or a townhouse is another question, but at least you have to deal with the listed decisions above then you can go to these next levels of choices.
To buy or to rent a home is really a daunting question to begin with but we hope that these guidelines can help you decide the best option for you and if you have a family.
There is no perfect better choice between buying and renting. Eventually, you have to decide what best works for your situation and what suits your needs. A house is not only a necessity; you have to put in mind that where you choose to live will actually influence all the other aspects of your life.