Most common questions about investing in a condominium will it be a safe investment? Plenty of Condominium Buildings will rise soon & Common selling point are locations and good investment. What is the life and ownership of a Condominium? At present situation will it be smart to invest in pre-selling Condos in Cebu? Will Condo unit value appreciate over time?
Here are 6 Tips before investing in Condominium
1. Location: Property or any structure can be demolish & Modified but location can’t be transferred or move to other place. According to them much better to buy bad property in a good location than a good property in bad location like for example: No right of way, too far from Business Centers, Schools, Church and Hospitals & Malls great Location includes convenience, neighborhood and security.
2. Reputation and track records of the Developer: Beware of fly by night developers, no track records, delivered Projects, do research get the “Best Realtor that will help you along the way”. 3. Affordability: Your ability to maintain all amortization and maintenance (association, repair, taxes) payments.
4. Know Your Target Market: if the purpose is for investment, your target Market is the key factor. The Good thing because most developers do a series of feasibility studies before they have to invest in Billions of money. Location Neighborhood & Future Development Plan of the Area is carefully considered and they already have specific targets before they launch their projects, that’s a Big Plus for Condo Investors.
4. Know Your Payment & Financing Options: If you want to make serious money investing in condominium properties, you should learn about the word “leverage“. Leveraging is about using as much of other people’s money and as little of your own money as you can, to buy your real estate investments. When you leverage wisely, you’ll be able to buy more properties (or bigger ones) with what limited funds you have on your own.
5. Rentals Projection: Renting out your condominium unit you need to project your income and costs and anticipate that there will be times when the unit will be vacant and will need repair. Monthly rental rates normally over around 1% to 1.5% of acquired cost or value of the condo unit.This would come up with a yield of 8% to 10% net yield. Rental income is constant throughout the 12 months in a year. Vacancy rates have a very strong impact on the effective return on the rental property. In considering buying a condo unit for rental purposes, you must assume at least a 20% to 30% vacancy rate over the life of the property.
6. Secured Investment: Owning a Condo investment gives you better security. Most of the condos has multi-level security features. From 24/7 security, with CCTV Cameras, concierge, restricted keyless access, and some even have perimeter fences.
It is all a matter of personal preference. Condo Investors who have cash, likes to buy condominiums because of those six reasons above, indeed a wise investment that they could pass on to their children as their value appreciates over the years.