Last 2009, bumili ako ng condo as investment. It’s a 28sqm 1BR unit worth PHP 2.27M. Since nasa Singapore ako, I asked my friend to help me look for a good one. Luckily, he found one and katabi lang ng isang malaking university sa Manila. I contacted the agent and close the deal in a month after sending all the documents required. It was a 1BR unit located on the 20th floor of the building, facing the school. In fact, pag dungaw ko pa lang sa maliit na balcony, kitang kita ko ang malawak na ground ng katabing university. Kumpleto ang amenities, wala ka nang hahanapin pa. I’m sure I can find tenant and get passive income. Yon naman main reason ko kaya bumili, para parentahan.
Unfortunately, I was financially ignorant during that time. I do not know assets and liabilities, I do not know financial literacy and I do not know what are the available investments that I can grab for investments. Typical OFW, real estate property agad ang naiisip na investement.
Then came 2012, turn-over na ng unit ko. That’s where the start of long lessons that I learned on this journey.
Turn Over Date
Do not expect much on the delivery date. Sabi ng nakausap kong agent, most of the time delayed daw yong delivery due to various reasons. My unit was supposed to be delivered end of 2011, but end up delivered May 2012. Nagalit pa ko sa agent ko noon, but she cannot do anything as well. In law, they are allowed daw up to 6 months from the target completion date to deliver the units. Don ka pa lang pwedeng mag lodge ng complain after.
Expenses and Charges
During sales talk, hindi lahat ng fees sasabihin sayo. Kung hindi mo rin naman kase itatanong, hindi nila sasabihin. But kung first time buyer ka, di mo rin naman kase alam kung anong mga itatanong. You are relying on your agent to feed you all the information you need to know. I thought yung monthly mortgate ko lang yong babayaran till the end plus some fees. Kaya nung turn over na, I was asked to settle all the payment dues before they can give me the key to the unit. And here’s some dues that I need to pay:
- Association Joining Fee (PHP 10,000)
- Building Insurance for 1 Year (PHP 2,520, depende sa size ng unit and this is yearly)
- Advance Association Monthly dues (PHP 8,400 for 6 months advance, depende sa size ng unit and this is monthly)
- Real Property Tax for Common Area per Year (PHP 2,240 per year)
- Real Property Tax for the unit (around PHP 5,000, which I paid yearly sa city hall)
- Utility Installation for Meralco and MWSS (PHP 19,485)
- Transfer of Title (PHP 108,000)
As you see, medyo mabigat din to sa bulsa. Sino nga namang agent ang magsasabi nito sayo kung hindi mo itatanong.
Since OFW ako, ang main concern ko nung bumili ako is how am I get a tenant. Wala rin naman akong family member na makaka-asikaso nito so not a good idea for OFW’s. But my agent told me that it comes with a condo administrator which will help us find tenant for the property. We do not need to be worried, kase sila na hahanap ng tenant and ipapadala na nila yong kita sa bank account ko.
Sounds a very good deal di ba? Kaya lang, hindi na explain ng agent ko na I have to pay for the service. In 12 months, they will get 1 month rental or around 8% of the revenue. Malaking part din yon, but you cannot say no kung wala ka rin namang magagawa. So for me, I will accept that offer.
Kaya lang, when I inquire about this and asked how much they will rent out the unit, they told me it’s only PHP 13K minus monthly association dues pa which is around PHP1,500. Way too low than what I expected rental price. Added to that, maraming unit ang naka enrolled sa kanila for management and hindi naman guaranteed na may makukuha nga silang tenant. Imagine kung may 100 units na minamanage sila, kaninong unit kaya ang pipiliin nila? Mapili kaya nila yong unit mo agad? Did you see my point? So kahit pa sabihin ng agent sayo na mag magma-manage, wala pa ring assurance na marerentahan ang unit mo.
In the end dahil frustrated ako sa condo management scheme nila, I decided to look for my own tenant. Luckily I found and rented the place for PHP 21,500 including the monthly association dues. Layo ng difference sa admin offer to manage the place, wala pang kasiguruhan. May na meet akong agent na pumayag to look out for my property and assist future tenants kung meron man. Syempre, for a small commission. Luckily, I was able to find tenants thru online marketing and they rented the place way higher than the condo management can offer. In fact, baka nga sinadya nilang babaan yong rental fee ng unit mo so they can add more in the end.
Sales agent receives commission when they close the deal. In fact in real estate, malaki commission nila. And that is their mission, to get commission and hit their quota. Sadly, some of these so called agents eh hindi man lang naiisip ang kapakanan ng bumibili. May enough na pera ba sila? Kaya ba nilang bayaran yong unit in few years? Stable ba yong trabaho nila?
I know there are some na hina-hype din nila yong sales talk nila, giving figures which are not accurate are purely on theory lang. Kaya naman yong audience, napapaniwala nila na good investment ngang talaga. But then, these so called sales agent do not even own units on this area. Binebenta lang nila yan most of the time. In the end, nasa atin pa rin ang last say kung bibili o hindi. Aralin muna bago mag invest sa condo property. Do not get condo after the talk, pag-isipan mo munang maige. I research mo muna kung tama ba lahat ng sinabi sa sales talk. Kung pinapirma ka na agad at pinapabayad ng downpayment at that day, mag-isip-isip ka muna. Good investment nga ba ito? It may be too late to realize your mistake.
In a rental property, napaka-importante ng location. You need to make sure may demand ng rental property, otherwise di ka makakahanap or mahihirapan kang ng tenant.
Around the university, maraming small boarding houses. Plus may existing 2 condo units from different developer ang nauna ng mag turnover kesa sa condo building ko. And since the turn-over, hindi ako nawalan ng tenant. As a matter of fact, tenants are emailing me for inquiries.
However, my agent updated me last year that there are another 4 condo units from different developers na itatayo around the area. In fact yung isa katapat lang ng location ng condo ko ngyaon. All of them matatapos around 2016 onwards, not sure on them all but mostly matatapos sabay sabay.
Nakita nyo yung magiging problema ko in the future? Magkakaroon ng over supply in the future while the demand remains the same. While I am happy na hindi ako nawawalan ng tenant sa current market competition, I know for sure na yong iba kong condo neighbors ay hindi makahanap ng tenant nila. Siguro maswerte lang ako and I look for tenant in the right place. But now my worry is, after 2016, makahanap pa kaya ako ng tenant?
Due to competition and over supply of units, 2 scenario lang yan. Either magbabaan ang rental prices or hindi na ako makahanap ng tenant at all kase by that time, mas luma na yong unit ko compare sa mga bago. But then, kung dumating yong time na yon, na recover ko na yung malaking part ng investment ko. Ang worry ko ngayon, papano na lang yong mga OFW na kumuha ng mga bagong unit believing it’s a good investment decision? Makakita rin kaya sila ng tenant along the way to at least break even man lang yong mga monthly at yearly expenses ng condo.
As you can see, my location is perfect. Wala akong mali dito. It’s a prime location ika nga. Kaya lang, hindi ko na anticipate ang future. Hindi ko inasahan na in future, maraming magsusulputang units around the area. Sino nga namang makakaalam nito? Baka kahit agent mo hindi ka masagot. So, having a good location is not a guarantee na magandang investment ang nakuha mo. Given the fact sa Pilipinas, kung nakitang maganda ang negosyo ng isa, kukumpetensyahin agad till such time all business suffers. Remember the internet cafe boom? Halos lahat ata ng kanto noon sa Cebu meron till dumating ang time isa isa na silang nagsara due to over supply.
It’s already late for me to realize these mistakes during that time. But then, it turns out to be one of the best investment deal that I have. I do not discourage anyone to buy condominium, but at least have the knowledge to become financially literate first before deciding to get one. Kung ang nais mo ay mag invest, there are lots of ways to invest your money na hindi kelangangan na real estate agad: mutual funds, UITF, stocks, etc. I love real estate investment and I’m still looking for one. But for now, pass muna siguro ako sa condo. There are other real estate investments naman na pwede pasukin like condotel, apartment, rental houses, farm, etc. I just need to get the best that suits my financial means and objectives.
May this serve as a guide sa mga new buyers. Again, this is my story with a twist of some friendly advice. It doesn’t mean that you’ll have same story as mine. I wrote base on my experience. I do not blame my agent, I blame myself for not having the right financial knowledge before investing. If you have other condo stories, feel free to share as well.
If you are in Singapore, join us in our regular Financial Literacy talk and seminar to be guided financially. UNLIKE other groups, we do not sell you condos or offer you to join MLM groups. Our group TGFI’s mission is to spread financial literacy to all Filipinos… Hope to see you on our next event!