The Philippines Real Estate market has been as active as ever and we haven’t been short of options for developments that are on pre-selling. Here are some tips for buyers when considering to invest in a pre-selling development.
5 Tips on Investing in Pre-Selling Developments
5. Remember that the payment term matters more than the absolute price.
Pre-selling investments are popular investment vehicles mainly because of their financing options. Developers are always offering stretched schemes with no interest, minimal to no down payment and light monthly payments, the payment term usually ends with a balloon payment at the end which usually ends when the property is finished. By then, you can still extend the installment scheme via bank financing – this time with interest.
4. Always buy parking.
With the rising cost of real estate, both developers and buyers are always trying to find ways to cut down costs to minimize the purchase price. In an effort to cut costs, buyers always opt to not buy parking. The amount of cars in the streets of the Philippines is rising more and more each day.
In a recent article of AUTOINDUSTRIYA , car sales have reached 34,528 from January to July 2019 alone. As such, having parking slot/s will give significant value to a condominium unit. In One Shangrila Place, parking slots are already going for Php4,500,000 per slot and its still pretty challenging to get one. Time Magazine recently had an article that a parking space in Hong Kong got sold for around 50 milllion pesos!
3. Invest in a unit that you can see yourself using.
Getting a property with an option investment for own use will always give you an upper hand. After all, a lot can happen between the time you buy it and the construction period of the property. A property that would be interesting for you would also have a higher likelihood of it being interesting to your immediate network (friends, family, colleagues) which will help you market the property better.
2. Get a unit bigger than your current requirement.
This is easier said than done, especially if you’re on a budget; but if you’re buying a pre-selling development that won’t be finished in five years, chances are the space you’re getting today will be too small for your needs by completion. Also, make sure you check the developer’s track record. Knowing the track record of the developer will give you a preview of what to expect from what you’re buying. The previous development will not be far off from their next development.
1. Manage your expectations.
Developers design their model units to be as perfect as it can be. Most of them are a reflection of what the unit will look like after you upgrade it. Renovation will cost you anywhere around 20,000-30,000/sqm.
Marcus Chu is the resident WhenInManila.com property investment adviser. He has been a full time realtor since 2007, specializing in properties and office spaces around the business hubs that have proven to grow tremendously in value. His insights into the real estate industry have proven to be invaluable and has earned millions for his clients and partners. You can find Marcus’ regular columns coming soon on WhenInManila.com. For consultation and more information on your next investment, you may contact him at wheninmanila.properties@gmail.