Condominiums are thoughtfully designed spaces that are most particularly attractive to young professionals for their starter home and personal sanctuary, overseas Filipinos wanting to have an investment property, and real estate investors who, with proper guidance from their real estate agent, see condo properties as a terrific investment opportunity in growing economies with strong demand.
They may be very profitable as long-term buy-and-hold investments. Investors may get more than they bargained for when it comes to HOA costs. Nevertheless, it is feasible to recoup the mortgage rates plus the HOA dues with the right kind of strategic investment planning and preparation.
However, each person must evaluate their personal circumstances to see whether condominiums are a good fit for them. With this in mind, it’s crucial to determine your goals for the condo purchase before asking yourself if condominiums are a good and practical investment.
Before anything else, let’s know first why it is good to invest in the real estate market.
Why is it good to consider real estate investments?
Putting money into a wide variety of assets, such as real estate investment trusts, mutual funds, commercial properties, or real estate holdings are essential in your investment portfolio. Lots of individuals don’t put money into real estate because they think it’s too hazardous or expensive. But these two claims both fail as truth-tellers.
In fact, there are several good reasons why real estate is a good investment. Real estate investing has several advantages, including substantial tax breaks and lucrative return rates.
But due to the high stakes involved, more care must be taken when investing in real estate in order to maximize returns and minimize losses. If properly anticipated, the diverse nature and unique challenges of real estate may then provide good returns in the form of operational profit, equity growth, and capital growth for any investment opportunity, including condominiums.
What is a condominium?
A condominium is a privately owned building that, when coupled with others, functions as part of a larger business complex. Typically, the complex’s owner is the developer or a bigger business that also acts as the seller to individual buyers.
Each and every portion contributes to a broader total, and in this case, the whole includes shared amenities like parks, pools, and pathways. One example of a residential real estate investment that sells condominiums in the Philippines is Asterra.
Condo Investing Benefits For Aspiring Condo Investors
Each condo investment’s returns are proportional to the effort put in by the investor before, during, and after the investment. As a result, condo investors may anticipate several benefits of condo investing:
1. Potential for rental income
Condo investments through rental properties offer an attractive avenue for generating income due to their relatively lower upfront costs compared to purchasing a house. With a condo, you can rent out your property to interested tenants and have a steady passive income stream.
In addition, most if not all condos are strategically located in emerging locations in Greater Manila Area (GMA) and regional areas nationwide. Naturally, rental demand in these areas posed for growth is high. The continuous influx of sure tenants, coupled with the potential to adjust rental real estate prices in line with changing market conditions, makes condominium investment a profitable option for you.
2. Lower maintenance compared to owning a house
Traditional homeownership, aka owning a standalone house, is high maintenance. In a condo investment, you are signing up for a reduced maintenance burden. As a condo dweller, general upkeep of common areas and outdoor facilities are covered by your monthly association fees.
As a condo owner and investor, this relieves you of the stress that comes with having to personally manage tasks such as repairs, lawn care, and exterior painting. All of these eat time and effort that could be very well spent towards your own personal wellbeing, especially during long weekends and your days off of work. This is hassle-free condo ownership that you rightfully deserve.
3. Amenities such as pools, gyms, and enhanced security
One of the top reasons why tenants, buyers, and investors are particularly attracted to compact spaces through condos is the exclusive and irresistible amenities. It could be a swimming pool where an entire family could relax any time and day of the week, a gym to achieve your fitness goals or simply lead a healthier lifestyle, and round the clock security for your total peace of mind.
These available amenities definitely enhance every condo resident’s quality of living. And for condo investors who plan to rent out their property to tenants, these amenities, from the fitness center to the tranquil landscapes and pool, are great selling points that would help seal the deal.
4. Location in desirable urban areas
In real estate, it is often said that the three most important factors when buying a property, especially a condo unit, is location, location, and location. It greatly emphasizes the role location plays in the desirability of a real state property. After all, arguably no one would want to live in a condo community where there are practically no nearby access to essential establishments, let along public transportation.
This makes condo investment a smart choice as most condos are situated in urban locations where shopping centers, schools, healthcare facilities, and employment opportunities are sufficient and within reach. This strategic positioning is also a contributing factor to a property’s increased value over time due to the high demand for homeownership in areas with a growing cityscape mixed with open greens.
5. Potential for property appreciation
It’s worth highlighting that your condo investment will help build your financial future as its value appreciates through capital gains. Factors such as urban development, population growth, and new infrastructure projects can all contribute to property appreciation in the condominium investment market.
Investing in condos with their strong growth potential allows rental property investors like you to capitalize on this upward trend and maximize your returns over the long term.
6. Diversification of investment portfolio
Whether you’re a rookie or a relatively experienced investor, including a condo property in your investment portfolio is a smart move. The real estate industry is more resilient in the face of economic adversities compared to other asset classes such as stocks and bonds. It therefore provides a hedge against a volatile financial market.
Diversifying your investment portfolio also means that you can reduce risks by spreading them across multiple asset types, which can help stabilize your overall portfolio performance and potentially increase your long-term gains. This is because the performance of real estate investments may not always correlate with traditional financial markets.
7. Ability to leverage financing options
Investing in condos lets you take advantage of various financing options or loans to buy them. You don’t need as much money upfront compared to other types of property. Plus, you might get better deals on loans with lower interest rates and longer repayment periods. This makes your condo investment a practical solution and the more cost-efficient option.
With it, there is a high chance that you can make more profit and grow your wealth faster through the increasing value of the property and rental income.
8. Possible tax benefits
Condo owners may also benefit from tax deductions related to mortgage interest, property taxes, and depreciation, which may all considerably reduce your taxable income that are being generate from your condo investments. This results in lowering your tax liabilities as an investor.
What is more, property management, maintenance, and repairs costs may likewise be deductible. It further enhances the after-tax profitability of condo ownership for practical living. Taking advantage of these potential tax benefits enables investors to increase their cash flow and boost their overall ROI from their real estate investment property.
9. Community living experience
Both tenants and investors benefit from the sense of community and social cohesion that comes with compact living in vertical homes, which may be lacking in single-family homes. Condominium property complexes are considered a close-knit community environment with amenities and facilities shared. The condo association may also host social events every year that the entire community can partake in.
It has a clubhouse and a community lounge for such gatherings. Swimming pools and gym are also shared facilities that all condo dwellers can use and bond over with. The presence of a homeowners’ association, moreover, helps maintain community standards and serves as an avenue for dispute resolution among neighbors.
10. Easier entry into real estate investment market
Finally, investing in value-packed condominiums can very well be the more accessible entry point into the real estate market for newbie investors or those with limited capital. One of the reasons is its lower upfront costs and maintenance requirements. It’s a smart investment option for anyone looking to test the waters of real estate investing without taking in more financial risks than they can tolerate.
Aside from that, the condo market in the Philippines is ripe with a diverse range of properties with varying price points. This includes Asterra’s value-priced midrise condominium complexes in their strategic location in Pampanga, Cavite, Laguna, and more to come soon.
It provides aspiring investors like you with ample opportunities to find the most suitable real estate properties that align with both your budget, as well as your personal and financial goals. For proper planning and expert advice, don’t hesitate to also invest in the knowledge of real estate agents by consulting with them for insights before you make a buying or investing decision.
If you want the best value for money, whether it’s for your first home or investment property, Asterra’s selection of available condominium properties are best fit for your lifestyle preferences and economic aspirations. Get in touch with one of our dedicated Asterra representatives today for your property inquiries and unique investment concerns.
Don’t wait any longer. Become an Asterra condo owner and investor soon!
