Buying A Condo In Manila - Advice Needed

[afathertobe]

Put this in a new thread as it's slightly off-topic: (rent vs buy considerations)

 

I am currently pondering the same. I have to pay for an apartment for my kid (and his mother) longer-term, so after a year of doing so I am considering buying a condo, though taking my time.  

 

I'll be frank here so that you have an idea of my thoughts, finances. I currently pay rent for an older residential unit with a nice common play ground, a pool, friendly property management and security so quite ideal for a family. Location is not perfect but pretty good all in all, not too far from the airport which is important for me. Monthly rent is 25'000 (roughly 5k of which for utilities, internet). It's a smaller, somewhat rundown 2BR, though again a good community and some of the other units are nicer. 

 

I found after a bit or research that I could buy a 2 BR condo unit from anywhere between 3M-15M (and more for really luxurious places), though I will go for the lower end of that range. Taking the above stated 25 years rule into account it would justify a price of up to 6M PHP, not taking into account any maintenance fees, taxes, replacement of furniture etc. which would not occur with rentals. 

 

Calculation: 20k x 12 months x 25 years = 6M PHP. 

 

I'd prefer a payment option over 2-3 years and move in by the end of next year to early 2017. I will search over olx.ph or the property developer websites and close in on a few interesting developments in my target areas of BGC, McKinley and perhaps Makati - rather pricey areas. 

 

My very initial research says condo purchases are open to foreigners without limitations, and there is no yearly property tax(?) or otherwise prohibitive fees and regulations. Am I missing something here? Other financial risks to consider?

 

From my understanding the big price appreciations have already happened, and there is a bit of oversupply of mid- to high range condos in metro Manila. Prices may not rise too much anymore, but probably also not fall. So timing isn't all that important and there is no rush. 

 

Comments? Bit of a long article, just a summary of my current knowledge. 

[Kiwi-Alan]

Keep renting.

[mogo51]

Keep renting.

 

Can you expand your answer with reasons for what may well turn out to be the right advice, that might assist the poster?

[Dave Hounddriver]

Here is what I would be thinking:

 

A foreigner can own a condo if you can pay for it or find some way to finance it.  You would then be responsible for all expenses of the condo whether it was empty or lived in so you need to be sure it is what you want.

 

The expenses are utilities, maintenance, homeowners fees and taxes.  (You said you heard you did not have to pay taxes on a condo?  I never heard that so you may want to seriously look into it.)

 

So if it serves your needs for at least 5 years I would be thinking that you could sell it at that time to get back most of what you put into it.  I'm saying 5 years would probably be the break even point where it makes more sense to own the condo that to keep renting.  So are you SURE thats what you want to do for at least the next 5 years then go for it.

[bootleultras]

you have property taxes on top of your monthly dues and building taxes, believe me,they all add up for the owner 

[afathertobe]

Perhaps I should expand on my needs: I will have to either pay for an apartment long-term (over the next 10, 15 years) or buy one. Hence my reason for looking into buying a condo. 

 

But keep your views coming. 

[Crocodile]

But keep your views coming.

 

Adding to the poster that said: Keep renting

.....

 

I would never recommend to anyone to buy a house or apartment for a SO or friend (or even family) to live in rent free, whether in the Philippines or my own country.  This would apply doubly so in a country you are not a citizen and are not living in permanently.  I am assuming that you will not be living there full time and are not moving to Manila in the near future.

 

The reasons for this is simple: People do no respect anything that is given to them.  No, you are not giving the apartment to anyone, but someone is living there rent free.  What happens when they complain that it is too far from family/work/friend, or neighbours are noisy or sister/friend moves in "temporarily" or they don't like the pool.  I am not even thinking of the worst things that could happen. 

 

Currently, you are paying rent so if, for whatever reason, things go a bit pear shaped, you can stop paying rent.  If you own the apartment, you really have zero cards in your hand to play - if things go a little bad, they will go very bad very quickly and you will be left frustrated and with few options.

 

If you will be moving into the apartment as soon as you buy it, disregard the above.  But, if you are not moving into the apartment, just step back and think about all the things that can go wrong.  I have seen things go bad and when they go bad, they go very bad.  Are you willing to bet $200k on this?  I know I wouild not be.  Continue renting, please.

[mogo51]

 

But keep your views coming.

 

Adding to the poster that said: Keep renting

.....

 

I would never recommend to anyone to buy a house or apartment for a SO or friend (or even family) to live in rent free, whether in the Philippines or my own country.  This would apply doubly so in a country you are not a citizen and are not living in permanently.  I am assuming that you will not be living there full time and are not moving to Manila in the near future.

 

The reasons for this is simple: People do no respect anything that is given to them.  No, you are not giving the apartment to anyone, but someone is living there rent free.  What happens when they complain that it is too far from family/work/friend, or neighbours are noisy or sister/friend moves in "temporarily" or they don't like the pool.  I am not even thinking of the worst things that could happen. 

 

Currently, you are paying rent so if, for whatever reason, things go a bit pear shaped, you can stop paying rent.  If you own the apartment, you really have zero cards in your hand to play - if things go a little bad, they will go very bad very quickly and you will be left frustrated and with few options.

 

If you will be moving into the apartment as soon as you buy it, disregard the above.  But, if you are not moving into the apartment, just step back and think about all the things that can go wrong.  I have seen things go bad and when they go bad, they go very bad.  Are you willing to bet $200k on this?  I know I wouild not be.  Continue renting, please.

 

 

OP please read this post carefully, it is very sound reasoning and good advice.  

[Jake]

you have property taxes on top of your monthly dues and building taxes, believe me,they all add up for the owner 

Some condo highrise offer a carport, which you have to pay on top of everything else.  Welcome back Bootle, long time no hear!

[afathertobe]

Some good points here. I get the point about ownership of a property and all the responsibilities, upkeep this includes. But since I have to pay rent longer-term buying makes financial sense for me. All the while I am trying to get a better sense of everything this entails, and some of the potential pitfalls I hadn't thought of. 

 

I will do a precise calculation when I close in on a specific unit/property, but what are your experiences/estimates on the total cost of maintenance fees, property management, taxes etc. ? Either as a percentage of the value or in absolute terms.