Renting a condo is a cost-efficient housing option. Although the condo deposit can cost you a significant amount, you’d be saving a lot in the long-term. How is this so? There are condo communities that use eco-efficient technologies that cut down utility costs in common areas and individual units.
Moreover, security facilities in the entrance gates and buildings are provided for, saving tenants home security expenses. Furthermore, tenants are offered access to a wide range of lifestyle amenities such as swimming pools, fitness gym, and function rooms. No need for gym memberships or costly parties in restaurants.
The next question you should be asking yourself is, “Can I afford a condo for rent?” The convenience of condo living can come with a price—one that is a bit higher than renting houses or apartments. A semi-furnished studio condo for rent in Mandaluyong City can be leased for about Php18,000/per month while a fully-furnished one-bedroom unit is available for a monthly rent of Php26,000. If you deduct the ordinary expenses you incur in your apartment for alarm system installation, sports and leisure, and maintenance, you’d even be saving more in a condo. Plus, you can relax in a resort-style community in the middle of the city? Now, that’s priceless!
Let us look into ways on how to save for a downpayment on a condo for rent.
Why Mandaluyong City?
If you’re a genuine Metro Manila folk, you know that rent in most parts of Quezon City is more affordable than those in San Juan, Mandaluyong, and Makati. Most business districts are in the south, as well as malls, high-end establishments, and entertainment centers. The nearer the place to the center of commerce and trade, the higher the value of real estate properties (well, generally). Mandaluyong conjoins several cities: Makati, Manila, Pasig and San Juan. It’s at the heart of the National Capital Region, thus it’s a top choice for families, students, and professionals.
Can you afford the rental fees?
Our main concern here is finding the best way to save for a condo down payment. Under Republic Act No. 9653, otherwise known as The Rent Control Act of 2009, as amended, an owner/lessor cannot ask for more than one month advance rent and more than two months deposit from a tenant. The most condo down payment you should prepare for is equivalent to three months’ worth of rent. If you’re aiming for a bare studio unit at DMCI Homes’ Flair Towers, you should save at least Php45,000, excluding other minimal expenses.
Revisit your bank account
Before going to the bank for a loan or withdrawing the cash benefit from your life insurance policy, let’s first check the available cash. Why is cash ALWAYS better than credit? Using available resources means that you don’t have to pay anything back. Loans involve interests, and these, especially on payday loans, can hurt your pocket.
Making saving a habit
Let’s say you don’t have enough money in your bank. Our next task now is to find ways on how to come up with the balance (which, hopefully is not that much). It’s a rule of thumb in personal finance that at least 20% of our disposable income goes to a savings pot. This amount, however, isn’t supposed to sit in the bank. It must be invested to let it grow on its own, or in other words, be turned into a passive income. If you haven’t started saving yet, now is the right time.
Visit your cooperative
The bank is not your only option in borrowing cash. If you’re a member of a cooperative, inquire about bridge financing programs. In contrast to banks, your cooperative, where you’re a cooperator (or member), will generally ask for less documentary requirements. The interests, however, may be equal or higher than those offered by banks.
Explore loans from your social security funds
You can also check your social security fund (SSS or Pag-IBIG) for loan programs. These government-run funds charge low interests (typically below 10% per annum) and only require a proof of income. You can borrow as much as 80% of your total contributions, subject to conditions.
Don’t just save. Invest!
Even if you don’t have savings, not a member of a cooperative and neither have enough contributions in social security funds, you can still be a condo renter—just not today or next month. The good thing is, you can save for the entire cost of downpayment, furniture and other moving in-related costs from your passive income. Save 20% of your monthly income, but invest 50% of such amount.
Say hello to retail bonds
Although Philippine capital markets are not as mature as those in more advanced economies, there’s already a wide range of investment vehicles that retail investors can take advantage of. One of these investment tools are retail treasury bonds (RTBs), which are securities issued by the government. These are zero-risk products, as they are backed by the state, and offer higher-than-bank rates. You can start investing in RTBs for as low as Php5,000. You can check the official website of the Philippine Treasury for offerings.
Boost your mutual fund investment
If you have Php5,000, you can either buy an RTB, open your stock portfolio, or both. A mutual fund is an investment intermediary where monies of investors are pooled together and invested in a basket of stocks and/or bonds. For a minimal amount, you access stocks of large corporations with the help of professional fund managers. An equity mutual fund, which is 80% to 90% invested in stocks, can earn you an average of 20% per annum.
Stock investments, anyone?
A condo for lease is within the reach of many working-class Filipinos if only they know how to manage their finances and augment their income. You can start investing in the Philippine stock market for a minimum amount of Php5,000 via an online stockbroker. You should be warned that the stock market is erratic—you can earn as much as 300% today but lose everything tomorrow. Unlike in mutual funds where your money is managed by fund managers, you’re on your own in managing your portfolio. One tip is to go for large corporations with strong fundamentals. You’d just need to increase your placement above the minimum.
Downgrade your lifestyle
No investment tool in the world will work out for you if you neglect basic saving tips. Set a goal and get a calculator. How much are you spending in a month, a week, and a day? Do you really need to splurge on a trip to that expensive coffeeshop your coworkers always hang out in? Is postponing your plans of buying a new gadget possible? Surely your smartphone still works! Downgrading your lifestyle doesn’t mean you’re depriving yourself. You’re only prioritizing expenses and putting your finances in order—that’s called growing up!
Sell what you don’t need
We’re fortunate to live in the age of convenience. Making a few cash is easier with the help of technology. Raid your closet, check out items you don’t need anymore and put them on sale. You can also call this task “decluttering.” Anyway, you’d only need to take the essentials when you move into your condo home. You can create an account in an online marketplace, but be careful of scammers.
Get a second, or third, job
Have you ever tried monitoring the number of hours you spend everyday browsing social media or watching funny Japanese prank videos? If you’re a tech-savvy millennial, you’re likely burning at least four hours of your waking hours online. Why not find freelance work on the Internet instead? Jobmarket platforms have tons of part-time writing, researching, and tutoring jobs you can attend to after work or during weekends.
If you’re still living with your parents years after graduating from college, this is the perfect time for you to expand your horizons and get your own place. Explore condo leasing, its costs, and benefits, and why it’s the best home for you.