The past few days, I’ve been thinking of investing in a pre-selling condo in somewhere in Makati/Manila or even outside the city. I have talked to 3 people already and the units are pretty expensive. Although I could afford the deposit and the monthly ammortization during the pre-selling period, I am not sure how it would be once I would be in the bank financing stage.
I have already tried to invest in a pre-selling condo unit about 8 years ago while I was still working in Manila. Needless to say, I received nothing back of all my deposits. (Well, I was able to get the full refund minus the reservation fee but the money never came back to my pockets, I meant). But a loss is a loss anyway.
This time though, I would like to do it again. This investment is quite reasonable. There would be a subway that will be built along strategic parts of Manila and so this would be the time to invest. Once the new infrastractures are in place, the value of these places will rise. I call this growing with the economy and considering that Philippines is a young population, new generation of workers will need places to rent and so why not invest when things are still ‘quite’ cheap?
But here goes my predicaments.
First, the condo unit turnovers are usually / always delayed. This means that although I still do not have my finished unit, developers will already charge me the ammortization amount after the deposit stage payments. Meaning, higher amounts and I would need to be forking it out of my own pocket.
Second is the insecurity of finding a good renter.
Third is that how could I possibly manage this investment while I am outside the country?
So, I made a mental list of ways I could provide an answer to my problems.
My first problem would be the delayed turnover. I would like to make sure that the ammortization payments is something that I could handle from the beginning to the end.
This means that the pre-selling condo should not be too expensive. I do not really care if the investment is all pretty and jazzy like the glitzy high rise condos with great amenities. I will most probably not live in them but will rent them out anyway.
So I have to make sure that I could also give a reasonable rent so that I could find a renter right? For what is the use of having a really good condo when you cannot find a renter?
I figure that the amount of bank financing ammoritization amount that I could handle (in case the unit would be vacant for a while) is probably 18-24k for the next 15 years on the safe side. This amount would be easy even if I would become jobless or have a baby in the coming years.
So it is important that I get an investment that is in the early stage of pre-selling and is really cheap.
My number 2 problem is finding a renter. This could be solved easily if I got a good price from the very beginning. In other words, really cheap unit.
My number 3 problem would be a bit difficult to solve. I do not want to give this to someone who does not know the value of money. My eyes are already open when it comes to trusting so this would be my predicament. However, lots of things can be done online already so there might be a way.
I just really cannot decide. It would be easy if I live in Manila with a Swiss income but since that is not the case, I would need to really have solutions handy to all possible problems that may arise.
I do not want to be in a position when after some 3-4 years, I ran out of money and have to sell at a loss.