By Romelda C. Ascutia
One of my most hair-raising experiences in recent years is when I made a significant financial investment. I had a little savings in the bank that was not being maximized, and I feared it would be frittered away with unnecessary withdrawals here and there. So I decided to put it in something that would have a bigger ROI in the long term.
I am not a newbie in the real estate investment scene. I bought a piece of residential land in Cavite back in the ’80s. A 276-square-meter corner lot in Bacoor, it was supposed to be the site of an apartment building when I had saved enough capital. Alas, with the high cost of construction, the land remains idle, a place my family visits and marvels at for 10 minutes during our annual pilgrimage to the municipality to pay the real estate tax.
In the ’90s, I made a second investment, a two-storey townhouse unit in Caloocan City where my family presently resides. The contract prices of both the land and the house are exceedingly cheap actually, though back then, it didn’t seem that way. With today’s inflation and the high cost of housing, I realize with hindsight that they are wise investments indeed.
Since I was making a real estate investment every decade, I decided in 2009 to invest in property once more—a condominium unit in Mandaluyong City. Unlike my earlier purchases, however, the contract price of the unit was very steep. I withdrew my savings and plunked the down payment. Because I signed on during the open house, I learned that I was entitled to a discount of more than a hundred grand. Elated, I recklessly told the agent to throw in a parking slot as well. What was a couple of hundred grand more anyway? Uh-oh.
Fast-forward to the present: A condo unit is a bleeding wound from a hemophiliac. You pay a monthly amortization that is probably equal to the salary of a couple of junior employees, plus monthly dues that are already the amortization of my present home. And don’t forget the penalty. This year I forgot to pay my huge annual equity and for that, I was dealt a double whammy, forced to pay penalties to both the developer and the bank that ran to several thousand pesos.
So as soon as the unit was turned over to me early this year, I immediately set out to find a tenant. I thought it was going to be easy, but it took several months before it was occupied, even with four brokers working for me. There is, I found out, a glut of condo investors competing to rent out their units, too.
Now the bleeding has been staunched to a trickle. This is because condo rental fees are based on prevailing market rates, and I still need to fork out part of the payment.
But it’s still the most exciting experience I’ve had lately. That rainy night a couple of months ago when the rental papers were being signed by the tenant, I felt like a balloon, floating above the scene from sheer relief.
My challenges as a condo owner are just starting, I know. But I’m beginning to enjoy it. Real estate to me is a good investment, if you have the financial staying power and you choose your location well (avoid flood-prone and earthquake fault line areas, for one). And when my wallet is screaming in pain, I comfort it with this mantra I repeat over and over again: Just six more years to go, just six more years to go, just six more years to go ….