Investing in any kind of real estate property is never cheap, but buying a condo can be especially costly. That doesn’t mean you can’t save some money in the process though! If you’re sure about making your condo dream come true, here are five best ways you can financially prepare and reduce your expenses when buying a condo property.
1. Set your budget.
When making a huge purchase such as a condo unit, the first step should always be setting a budget. This will not only help you set a goal, but it will also allow you to narrow down your options for which unit to ultimately buy.
To set a budget, determine how much of your monthly income is disposable and the amount you can actually save for your condo budget. To give you an idea, it’s recommended that at least a third of your income goes towards your monthly payments, so you can still afford to fund your lifestyle.
2. Make sure you’re debt-free.
Buying a condo unit usually requires a 20% down payment. If you’re free of any debts, like credit card payments, loans, or other mortgages, it will be easier for you to get the initial amount ready. You will be able to save on interest payments in the long run as well.
3. Go for foreclosed condo units.
Foreclosures are former loan collaterals repossessed by banks to recover expenses. Buying foreclosed properties is actually a good deal if you’re on a strict budget, as you can get them at a bargain. Because they’re regarded as “distressed” assets, they’re sold at a much lower price, but that doesn’t mean there’s anything wrong with these properties. They may also come with more flexible financing options since banks are more motivated to sell them.
4. Consider investing in pre-selling condos.
If you’re not in a rush to move in, you may want to opt for pre-selling condos. Aside from generous payment terms and a low monthly down payment on these properties, you can secure one just by paying the reservation fee, which usually costs anywhere from P10,000.00 to P50,000.00. And since the condo is still under construction, you may pay off the down payment in installments.
5. Look into the developer’s payment terms.
Most developers offer various flexible payment terms, and some even come with discounts. Let’s take the 10-40-50 payment term as an example. In this arrangement, you will have to pay a 10% spot payment, 40% over the next 59 months, and 50% in cash payment or bank financing. Make sure to discuss the different terms with the condo developer and choose the one that will fit your financial situation the best.