Tips On Buying Real Estate in the Philippines

Because of some personal reasons, I decided to ask my Sunlife Financial Advisor Sasha So Seng Yu about how I would go about buying real estate in the Philippines, specifically in Manila. Sasha is not just a Financial Advisor - she is also a licensed real estate broker. Her niche is selling condominiums to the A-B market. I asked her specifically about how I would go about buying a condo for myself.

Sasha said that I would first have to compute my budget for buying real estate. In my case, I asked her if 10,000 per month would be enough to pay for a condo (probably a studio type because I would live there alone). Sasha said that it is possible to buy a condo with 10,000 per month but that she personally sells condos that go for a much higher monthly payment than 10,000 pesos. So I guess the amount I specified would apply for the lower-end condos.

The downpayment is another important consideration because the condos that Sasha sells require a 30% downpayment. So the downpayment for a condo for me is 30% of the total selling price. What this means simply is that if Sasha were to sell me a condo whose selling price is 5 million then 30% of that is 1,500,000 pesos. That’s aside from paying monthly payments for your payment scheme. Sasha said her condos would require 5 years to pay the balance – meaning, if I already pay the 1,500,000 downpayment I would need to divide the balance of 3,500,000 by 60 months or 5 years to pay. That means I need to pay approximately 58,334 pesos per month for 5 years. Wow.

Sasha also mentioned that I need to consider the “location of interest” or where I would prefer to live. Some places are more expensive to live in than others. For example, I have a friend who lives in The Fort and she bought her condo for 7.5 million pesos.  Another friend of mine lives in The Fort also and her condo probably cost 12,000,000 pesos to buy. It is interesting that the location would have a big impact on my lifestyle because Sasha did say that I need to consider the lifestyle I wish to lead if I’m buying real estate. My lifestyle would dictate how happy I would be living in that location – for example, if I like to be near places of entertainment like cinemas and prefer to shop near home for weekly food marketing then I would need a condo located somewhere that offers those.

Because I told Sasha that a condo costing 5 million pesos total selling price would be a bit costly for me, she then said that “you can get a good condo for 3 to 4 million”. So if I were to buy a condo worth 3 million total selling price then the 30% downpayment = 900,000 pesos while the 5 years to pay will require monthly payments = 35,000 pesos per month. If I were to buy a more expensive condo in the range of 4 million total selling price then 30% downpayment = 1,200,000 pesos while monthly payments = approximately 47,000 pesos per month.

So obviously you need to have capacity to pay if you intend to buy real estate. Take note that this is just the initial computation, meaning there might be other expenses as well that I would need to factor in. But for now, Sasha gave me a good idea of how I would go about buying real estate for myself. So that’s food for thought for me at this point in time.