If you are running a social media group like our OFW UsapangPiso Forum, one of the most moderated posts are those ads of houses and condo units that local real estate brokers and agents are selling. The problem is that they don’t read our posting guidelines/rules first before flooding our walls. Nothing against selling of properties as I myself do sell some passively. (Yes, I don’t like competition). 😛
Seriously, agents and brokers target OFWs and OFW communities in selling their units, boasting of easy installment plans and low interests. There are also a lot to choose from. Pretty tempting for most OFW’s whose goals include owning a house or run a house-for-rent business.
However, people need to examine their situation first whether it’s already the right time for them to buy their first house. Just because everybody’s buying and news of a good economy keeps on popping up your TV screen, doesn’t mean you have to buy now also.
Ask yourself the following questions to know if you are really ready to make that once so elusive dream of owning a house come true.
1. Do You Have Your Downpayment Cash?
Most real estate agents offer very low downpayment packages for houses in villages that always advertise as 15 to 20 minutes away from the nearest city, with full amenities, and gorgeous designs.
If you are really decided to buy that house, where will you get the money to pay for the downpayment? Will it be from a loan? Or have you saved up for it?
I’ve met several agents who are helpful in making you decide whether to take the loan from the bank, from the government’s housing development program, or in-house. But then there are those agents who don’t really care as long as you sign up and place that downpayment soon.
2. Are you aware of the other costs of owning a house?
In my previous article about buying a house, I mentioned the many other taxes, fees, charges, and recurring costs in buying or investing in a house or condo.
While these are numbers that may haunt you during your first months of paying your amortization, there are intangible costs that no one else can determine later on but you. I’m talking about things like uncomfortable neighborhood (you’re living in a house that’s standing alone in the middle of a village because the neighbors are not yet living in their purchased units.), you don’t own a car to bring you in and out of your village, sometimes there are no plumbers or electrician available right away when you need them, among others.
But then I know, these can always be addressed. There are solutions, definitely. But I’m just giving you examples of annoying situations.
3. Are you going to live in that house soon?
If the purpose of buying the house is to rent it out, then it’s okay to buy it now even if you are working overseas or away from that village. I know several OFW’s and friends who decided to purchase a house while they are working overseas but nobody’s living in it. Some have stopped paying for the houses and are now foreclosed. Some have continued paying for it even if the village has been considered to be sitting on top of a major faultline.
So if you don’t have any plans to live in your house within the next 5 years, then I don’t see no reason to buy it now. But if it’s a foreclosed unit in a fantastic location and you’re planning to rent it out with , then by all means buy it now.
4. Do you have a stable cashflow?
Are you a worker based overseas (OFW)? Are you working on a contractual basis? Do you have other sources of income aside from your employment or business? If you lose your job today, will you be able to continue paying for the monthly amortization until you find a new job? Make sure that your emergency fund is equal to at least 12 months of your monthly household/living expenses to cover even the monthly amortization of your house.
Have you ascertained the financial condition of your company lately? How is their bottomline performing in the recent years? It might be good to look for other income streams while you are currently employed.
5. Are you buying or are you investing?
If a real estate broker/agent offer you to “invest” in their beautiful 3-room bungalow or even in a low-cost house, ask yourself if you are really “investing” or just simply “purchasing”.
Investing means you will buy that house as a source of your passive income. You will either rent it out or pay for it at a lower price and sell it later on. However, don’t jump into it unless you’ve already learned how to do it from the experts. There are trainings on making money in foreclosures that you can attend on how to do this.
Buying a house to call your own will greatly affect your family’s finances as well as your lifestyle. If you are really ready emotionally and of course, financially, then go ahead buy your dream house now. Don’t let anybody discourage you from grabbing that chance to own one soon.
Remember to always be clear with your objectives. That applies even when deciding to purchase a house whether for ownership or as a source of passive income.
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