Monday, November 2, 2015
10 Surefire Signs You’re Ready To Buy A Condo
Dreaming about owning a condo someday is one thing, but have your musings become a bit more specific (which city you want to live in, what kind of unit you want to get, what color theme to use in the living room, etc.) than before? And do you find yourself constantly calculating your expenses and thinking, “I can actually save up for a property now”? Real estate website MyProperty.ph has formulated these 10 questions you should ask yourself to be certain that now’s the time to upgrade from renting to owning a condo.
1. Do you have a stable source of income?
Buying a property through a home loan means taking on the responsibility of making monthly amortizations. This means you need to have a job that not just earns you enough to make regular payments on time, but also one you’re confident you’ll keep for a long time. If you’re in a career or industry that’s known to be unstable, or if you just started working for a new company, there’s a pretty high risk you might lose your source of income and miss monthly loan payments.
2. Have you saved up for a down payment…
The down payment for a property doesn’t come easy for everyone. In most cases, it’s 20%—an amount that can either be small or large depending on the price of the property and your monthly income. If your income allows you to comfortably set aside a certain amount, then good for you. If not, there’s nothing wrong with waiting a little longer to save; what’s important is that you’re able to put together the amount without it making a sudden huge dent in your current budget.
3. …and still have enough left over?
You don’t want every single centavo going to condo payments. What if someone ends up in the hospital and you have no other resources to tap? You also need to think about the other costs involved in keeping your new home up and running (utilities, maintenance fees, and association dues). Remember that you have to eat, too. You can only truly say you’re financially prepared when you’ve factored in all of these and the payments toward the condo, and you still have some money for a nice emergency fund (worth at least six months).
4. Do you have your priorities straight?
Being realistic about your wants and needs for your dream home helps you narrow down your options, so budgeting your finances should be easier, too. You may want a spacious condo, but a few months down the road, can you spare the time, money, and effort to maintain it? Your smile might be fading at the idea right now, but it’s better to consider these factors now than feel stuck later.
5. Do you have a firm grip on your debts?
We all incur some sort of debt, but not everyone does a good job of keeping them from blowing up. Ideally, you will have been able to eliminate all your consumer debt, but as long as you’re able to stay on top of your credit cards, car loan, and any other things you need to pay regularly, then you’re doing OK.
6. Can you think like an investor?
Your priority might be having a unit to live in now, but should things change a few years down the road, it would be nice to know that the unit you’ve purchased has the potential to earn you a sizeable profit should you lease it out or put it up for sale.
7. Have you suppressed your inner Martha Stewart long enough?
Renting a home means giving up a lot of things, such as your absolute freedom to decorate. Sure, you can probably talk your landlord into drilling a few holes in the wall for your precious photos, but what if your desire to be creative can’t be limited to that? Having your own condo means you can personalize it as much as you want without worrying about security deposits.
8. Do you know how to fix a leaky faucet?
… or unclog a drain, or repair a door lock? When you were just leasing a unit, you were comforted by the fact that you could count on the landlord to take care of things should anything need repairing. Once you’ve made the switch from renter to owner, you’ve only got yourself to rely on. How ready are you to fix signs of wear and tear? Or are you willing to shell out money to pay someone to do them for you?
9. Are you getting ready to settle down?
Did you and your significant other recently tie the knot? Or are you about to have your first child? If you’re starting a family soon, chances are you’d want a stable form of residence, something that a rental may not offer. Belonging to a two-income family means you’re even more assured that you’ll be able to make your monthly payments should one lose their job. Also, with a child on the way, you’re most likely thinking about leaving them with something (like a property) when they’re older.
10. Do you relish living in the same place for a long time?
To those who find themselves jumping from one city to another, renting is the most sensible option, but if you’ve been renting in the same neighborhood for quite some time, there’s a reason for it. It could be that it’s close to everything that matters to you, it’s safe, or it’s generally comfortable. In any case, it would be smarter to start putting your rent money toward your own condo from here on out, especially if you see yourself living in the same place for another five years or more.