What are the different types of residential properties to invest or live in? What factors should you consider when choosing a home? These are just some of the questions answered by Angela Manese, our Residential Sales and Leasing Manager, in the first installment of our web series on buying and leasing or renting residential spaces. Join her as she doles out advice for investors, starting families, yuppies, and other Filipinos or expats looking to buy or lease a condo or house in the Philippines. (Watch Part 2 here.)
Hi there! Thank you for joining me here in KMC Expert Talks. I'm Angela, KMC MAG Group's Residential Sales and Leasing Manager and today I will answer some of the most common issues and questions about leasing, buying, and choosing a house or condo in the Philippines.
1. What are the different types of residential properties to invest or live in?
In the Philippines, you can invest in two types of properties, either a house and lot or a condominium unit. House and lots are usually found in subdivisions or villages. They can be further classified into 4 types: single-detached, single-attached, duplex, and townhouses.
Single-attached and single-detached houses are pretty much the same thing, they both refer to a house that's standing in 1 lot. They are only different when it comes to layout -- a single-attached house is attached directly at the side of your lot, so it's only open on one side. A single-detached home is pretty much unattached, so there are spaces on both sides and at the front and back.
Duplexes, on the other hand, are 2 different houses with separate entrances, but are standing in 1 lot. If there are 3 or more houses standing in 1 big lot, then that's classified as a townhouse.
For condominiums, there's 3 types: low-rise, mid-rise, and high-rise. Another way to differentiate residential properties is through the title. A house will have a TCT- transfer certificate of title while a condo will have a CCT- condominium certificate of transfer. Some townhouses will also have a CCT instead of a TCT since the lot is shared by more than 1 house.
2. What factors should you consider when choosing a home?
The first thing is your priorities, of course. What matters to you? Is it proximity to work or the office? And if you have kids, would you want them to be close to their schools? Matching the location to your lifestyle is very important. Singles and young professionals would want to stay close to transportation and entertainment hubs and spots like gyms, malls, restaurants, etc., while most married people would prefer villages or subdivisions that might be far from the city center, but offer proximity to good schools and quiet neighborhoods.
Another important consideration is your budget. Purchasing a property that's not within your means may only cause a bigger problem, and in the end, you might just end up losing it while swimming in debt. Calculate your debt-to-income ratio by dividing your gross monthly income by your fixed monthly expenses. Your DTI should only be at 10 to 30 percent. For example, if your monthly salary is at Php 150000, and 30,000 goes to food, rent, transportation, utilities, bills, etc. which is at 20% DTI, then you can afford a house or condo that requires up to Php 15,000 a month.
The third consideration is your deal-breakers. It's really difficult -- or almost impossible -- to find the home that can give you everything you want. For example, if you want to stay in the city, but you want a large house with a garden and several rooms for your growing family, you might have to give up proximity to the city centre to get the larger space. Narrowing down your absolutes will be a sure way to avoid wasting time on unsuitable properties, and instead allow you to determine exactly what you are willing to compromise on and what you simply can't live without. The key is to ask yourself: "If you only have a certain amount to spend, how exactly would you use that money to best benefit your needs and reflect your lifestyle?"
3. What about investors?
For investors, it's important to consider the resale potential of the property. This is actually a general rule that also applies to all homebuyers. You have to look at the general location of the property, how well the home is, and if it's likely to grow in value. You would want to invest in a property where prospective tenants would like to live. It may be good to consider investing in developments with the live, work, play balance to attract more tenants.
This is also something starting families should keep in mind, because eventually you would sell the current home you are in, so evaluating how and who you might be able to market your property to down the road is an important part of narrowing down your selection and planning for future investment potential.
And that is it. Stay tuned for next week's episode where I will be sharing with you my recommendations on the best Philippine locations to find residential properties. Thank you for joining us and I hope to see you again next week!