All couples dream of buying their home. However, they struggle with this question: “Do we buy a starter home now — a first property that fits within our budget — or do we just save and wait until we are in the financial position to purchase our ‘forever’ home?”Financial experts say that there is no better time for Filipino couples to buy a home.
What is a starter home?
A starter home is a house that you can see yourself living in for five to ten years. For example, Tony and Rica L. bought a condo unit soon after they got married. While they know they eventually want to retire in the province, and hope to buy property there when they are older, they see their Megaworld condo as a “perfect fit” for their current lifestyle.
“We love the convenient location–it is near our offices, our favorite restaurants, the best clinics, and our choice retail stores,” they said. “The atmosphere is surprisingly peaceful for a community that’s in the heart of Metro Manila. The condo amenities, like the pool and gym, are also important to us because we are a very young, active family.”
Tony sees himself staying in the condo while the kids grow up, and then renting it out when they are ready to retire. “The property can also serve as a source of income for me when I am no longer working,” he says.
Why does it make sense to invest in a starter home?
Financial experts say that there is no better time for Filipino couples to buy a home. The economy is very strong and interest rates are low. If you wait out the next 10, 15 years you could lose out on a golden opportunity to buy a very good property with a bank loan that has very friendly terms.
What do I look for in a starter home?
As a general rule, a starter home should still be a good property that will appreciate in value (or at least hold its value) in the next years. This means that in the future, you have the option to either sell it so you have equity to put into your next house, or rent it out at a good rate so it can be a steady source of income in your retirement years.
One way to approach this is to look at the general location. Within Taguig, areas like The Fort will have a higher appreciation in value because of developments being made in the area. It is already being touted as “the next business district” and has attracted multinationals, embassies, and hotels. Megaworld Corporation, the Philippines’ largest residential condominium developer and BPO office landlord, is also building several townships there. Considering the company’s success stories — Eastwood, McKinley Hill, and Newport City, just to name a few — buyers can be confident that their investment will pay off.Within Taguig, areas like The Fort will have a higher appreciation in value because of developments being made in the area.
Another way to assess if a property is a good starter home is to think about how easy it will be to sell it when you are ready to invest in your permanent home. Again, look at location. Any area that is near a business, shopping, or entertainment hub will be easier to sell, since you have a wider market: yuppies, young couples, expatriates, OFWs.
Studies show that condos are also easier to sell even in “more challenging” housing markets since they will always be more affordable than single detached homes in the area. In more robust real estate or economic conditions, luxury condos that have world-class design and maintenance, and offer more lifestyle options, will sell just as fast even faster than family homes–primarily because it appeals to a more affluent middle class.
How do I increase the value of a starter home?
Let’s say you are ready to sell. Invest in home improvements that can improve the appearance or comfort of your home. Better fixtures, a new paint job, and design details like the quality of the kitchen tiles or additional wall shelving will all help “sell” the unit to new homeowners.
This is another reason why condos make excellent starter homes. It costs far less to decorate or upgrade the fixtures of condos than a full-sized house. You need less materials, less labor, and less time to complete the improvements.Studies show that condos are also easier to sell even in “more challenging” housing markets since they will always be more affordable than single detached homes in the area.
And if you buy a condo from a reputable developer, you don’t even need to make that many changes: the reputation alone will already attract buyers. Plus, reputable companies will invest in maintaining the property’s facade, landscaping, and “curb appeal.”
How do I start shopping for a starter home?
First, do research on the developments, and more importantly, the reputation of the developer. Choose a company that has a solid portfolio of successful projects. Then, research on the particular development that you’re interested in. Go beyond the brochure and prices; find out how much the company is infusing into the project, its long term plans, and its vision for the area. For example, Megaworld Corporation is investing P65 billion into the 15-hectare Fort Bonifacio project in Taguig City — clearly an indication of the company’s commitment to the area, and ultimately, its homeowners.