MANILA - When not paid for in cash, a condominium is a form of "forced" savings since it requires monthly payments.
Coupled with utility bills and the need to build savings, condominium dues can be a challenge.
Salve Duplito, resident financial adviser of ANC's On the Money, shared these tips on how condominiums investors can better manage their finances.
PAY AS MUCH AS YOU CAN
The best option is to pay 50 percent in cash and get financing for the remaining half, instead of the 80 to 20 ratio, Duplito said.
“Your interest payments are fair and it is easier to manage your monthly payments," she said.
MIND YOUR OTHER DEBT
Monthly consumer debt payments, including credit card dues, should not go beyond 30 percent of the individual's monthly take home pay, Duplito said.
Anything greater than the 30 percent threshold heightens the risk or default or not being able to pay on time, she said. Keep in mind that banks charge around 6 percent annual interest on condominiums.
"If the total goes beyond it, you may be at risk of default and most of your savings will go down the drain," she said.
DIVERSIFY YOUR PORTFOLIO
Real estate should not be an individual's sole investment, Duplito said.
"You need to put your money in other investment instruments that are more liquid meaning they can be sold more easily than a property and they behave differently when a crisis strikes," she said.