AFTER years of working since graduation, it is quite understandable to have difficulties parting with your hard-earned money and savings. In our 20s, we sometimes find ourselves saving in the bank without knowing exactly what the money would be for. Perhaps an emergency fund, that’s good. But eventually, we will find the urge to invest in something tangible like a real estate property that we can afford.
Deciding to buy a real estate property may be one of the bravest decisions you may ever do in your 20s as far as money is concerned. On top of that, it requires thorough understanding and meticulous inspection so your hard-earned money doesn’t go to waste.
As I am no expert in this field, I decided to interview real estate professionals who were honest and straightforward about the things one must look for when buying a lot, a house, or both. Interestingly, finances may be on top of this list but it’s not the only thing worth considering. There are a lot of things that must be weighed. Here’s what I found out:
1. Prepare what you need to prepare first
Arthur Gonzales has been a real estate broker for nine years now. He strongly advocates for early knowledge management for 20s when it comes to investing and preparing one’s self in buying real estate properties as he believes that being in your 20s is a golden opportunity for investments.
“You need to know your cash position with respect to the non-negotiables before even thinking about investments.Business debts are acceptable but if you have other debts especially high interest loans like credit cards, you need to zero it out first. After making sure you hold only the 'productive' debts, you first must build your emergency fund (at least 3 months salary) and then a savings fund of at least 3 to 6 months salary. Among the last hurdles is getting insurance, particularly health. After these, then you can plan to invest in getting a property. Rule of thumb is that the monthly payments for the property you'll be getting must not be more than 30% of your salary/income. In fact if you can keep it below 20%, better” (Arthur Gonzales, REB 7081, Jaz Mendros, partner broker, REB 20643)
2. Consider the location and quality of the property
After making sure that you are indeed financially capable of paying for a real estate responsibility, broker Diocy Guilabtan said it is important to assess the location and the quality of the property that you eye to purchase so you know you get the worth of the money you will be paying.
“You must check and decide which place you would really love to settle down for good or which place you would want to see your business prosper over time. Choose a location that really suits your preference. Look for several options available. You may visit the place regularly, assess the location by checking fault-lines, elevation, flood zones, etc., Ask questions to people living around and feel the vibrations if it is really for you or not. Always look on the house/unit features if the property you are buying is with a structure. Check the quality of construction materials being used. If you are buying from a developer, choose the one who has enough experience in building homes and do background checking. Check on their model houses and other completed housing projects. You may ask for the layout and checklist of their construction materials to assess its overall quality. This is crucial especially in the present times when earthquakes and natural calamities are common. It is important to ensure the resilience of the properties that we invest in”.
Guilabtan also said how important it is to familiarize with the documents that you must be looking for from the developer or the broker you are transacting with to verify authenticity. This includes the (1) clean and authentic title certified by Registry of Deeds; (2) updated real property taxes; and (3) license to sell of the developer from the Housing and Land Use Regulatory Board (HLURB). (Diocy Guilabtan, REB 0025262)
3. Know who you transact with
With the movement restrictions and almost everything going online, it’s easier to also encounter scammers on the internet. Salesperson Gerald Luardo warns investors in their 20s to be more careful and to only negotiate with registered brokers and agents.
“Transact with licensed brokers, licensed real estate salesperson, or buy directly from the developer’s office only. Due to accessibility of online transactions, it is also easy for scammers to do their job so better check the background of whom you are transacting. Common red flags include lack of license to show you, does not bring you to developer’s office for more information, and payment transactions are made through his or her personal bank accounts” (Gerald Luardo, Real Estate Salesperson)
4. Face the calculated risk
Real estate agent Jermafe Kae Prias, on the other hand, believes that when investing for a real estate property one must not wait too long as the value of real estate appreciates over time.
“The best time to buy a property was five years ago. If you haven't had the chance then, you still have now. In real estate buying later will cost you much. If for investment purposes, pre-selling projects are the best options since you are paying for the lowest equity payment in longer terms just in time for the place to develop. Take note that developments are fast and so the value of such property is also increasing”. (Jermafe Kae Prias, Unit Manager, Jocelyn Pasigna, broker, 2202 Athensland 0030241)