Having just graduated, I was faced with the ever difficult problem of finding a place to stay.

I had 3 options:

(1) rent a room

(2) buy a condo

(3) live with my relatives

As I am not a believer of rent (or having to pay for something that will never be yours) and have not a very high first job salary, I decided to live with my relatives, *for now*.

So definitely, buying a place of my own is the next reasonable step to take. It’s one of those milestones that make you feel independent and mature (plus, it feels good to finally be free from the monthly stipend that our parents use to bind us to them and the constant nagging that come along with it). That is especially now that property corporations are giving (quite) flexible payment plans.

With my free time, I tried scurrying around, looking for some great deals for condominium units in certain locations (that should be far from the west valley fault). *This post is to for me to set a salary goal to finally achieve my dream of having a condo that I can call my own because I paid for it with my own sweat, blood, and tears.* The condo will serve as a home for me and my family in Manila. It can also serve as a business (but that is secondary).

I can either have a **preselling condo** or a **ready-for-occupancy (RFO) condo**. The upside to owning a pre-sold condo is that it is mighty cheaper than an RFO. The downside is that the turnover unit might be far far away from the specifications i.e. what you get may be much less than what you expected in terms of material quality, floor area, etc. Meanwhile, the upside to buying an RFO is that what you see is what you get. The downside, well, it’s really expensive.

I would want to have a 2 bedroom unit as one of the bedrooms will be my personal bedroom while the other will be for my siblings or maybe for rentals. I think the best locations for condo units are those not affected by the West Valley Fault. See those areas in the earthquake zone.

**PRE-SELLING CONDOMINIUM UNITS**

**Alternative 1 (Amortize the condo for 5 years)**

This is assuming that while I am paying for the condo, I will still be living with my relatives for 5 years.

Monthly payment terms for a certain pre-selling condo in Cubao or Manila, to turn over in 5 years are cited below.

I wanted to buy a **2-bedroom condo**. Average price is **3.5M** per unit for **50 sqm**.

Let’s say the payment term is 10% downpayment payable in 1 month, all the rest (90%), through bank financing. I will use all of my savings to finance the downpayment.

Interest rate from Bank is 10% and I want to pay the condo in **5 years**.

Using PhilPropertyExpert’s Loan Calculator, monthly amortization is P 66928.19 or rounded up to **P 67,000**.

If living with relatives, other costs to consider:

- Food – P 3,000
- Transportation – P 4,000
- Monthly savings – P 5,000 (never forego of savings! see this article to be inspired)

All other expenses will be shouldered by my very generous relatives.

Thus, If I wanted to buy a condo and still not be able to live in it for 5 years, I need a net minimum salary of P 79,000 or, given estimated taxes and misc. fees at 20%, gross of **P 94,800!!! **(WOW THAT’S A LOT OF CASH HUHU)

After 5 years, ideally I would have fully paid the condo developers. That being said, my expenses for amortization would be totally gone and replaced by lifestyle expenses as follows:

Association Dues (Php50 per sqm X 50 sqm) | P 2,500 |

Insurance | P 1,000 |

Electric Bill | P 2,000 |

Water Bill | P 1,000 |

Internet/Phone/Cable | P 1,500 |

Property Tax | P 1,000 |

Furniture (assuming amortized for 2 years) | P 5,000 |

Transportation (assuming everyday commute) | P 4,000 |

Groceries (for in-house consumption) | P 3,000 |

Food (dinner with friends, dates, spontaneous lunches, etc.) | P 3,000 |

Misc (security money & other small, here-and-there, out of pocket exp) | P 3,000 |

TOTAL MONTHLY DUES |
P 27,000 |

Now is the best time to make up for all those times I have not saved and thus, invest my extra cash. As you can see, total monthly dues is lower than my monthly condo amortization in the past 5 years.

Plus, if I consider taking in bed-spacers, I will have something to ease the blow of the monthly dues. Let’s say I put 4 beds in one of the rooms and charge each bed spacer P 5,000 for lodging and everything (except food). That’s P 20,000 minus my monthly dues giving me an extra cash of P 59,000!!

For a pre-sold 2-bedroom condo that I can’t live in until 5 years, to pay for in 5 years, I need a net minimum salary of P 79,000. Plus 20% taxes and fees equals a minimum gross salary ofP 94,800.

**Alternative 2 (Amortize the condo for 20 years)**

Payment term is 10% — downpayment payable in 1 month, then 90% bank financing. Interest rate from Bank is 10. I want to pay the condo in **20 years**.

Using PhilPropertyExpert’s Loan Calculator, *monthly amortization is P 30398.18* or

*rounded up to*

*.*

**P 31,000**If living with relatives, other costs to consider:

- Food – P 3,000
- Transportation – P 4,000
- Monthly savings – P 5,000

All other expenses will be shouldered by my very generous relatives.

Thus, If I wanted to buy a condo and still not be able to live in it for 5 years, I need a *net minimum salary of P 43,000* or, given estimated taxes and misc. fees at 20%, gross of **P 51,600!!! **

After 5 years, I would still be paying the fixed amortization of P 31,000. Add to this the costly monthly lifestyle (without savings) of P 27,000 (refer to table above). But if I rented out one of the rooms for P 20,000, then my expenses will be offset. Let’s say electric and water bills remained the same.

In the end, I will only have an additional expense of P 8,000 (P 28,000 lifestyle costs *minus* P 20,000 profit from rent). If added to the fixed amortization of P 31,000 will amount to P 39,000, still less than my net of P 43,000.

Savings then will be at P 4,000. My **P 51,600** gross will still suffice!

For a pre-sold 2-bedroom condo worth 3.5M that I can’t live in until 5 years, to pay for in 20 years, I need a net minimum salary of P 43,000. Plus 20% taxes and fees equals a gross salary ofP 51,600.

**READY FOR OCCUPANY (RFO) CONDOMINIUM UNITS**

As I said, I wanted to buy a **2-bedroom condo**. For RFO, average price is **4.5M** per unit for **50 sqm**.

Let’s say the payment term is 10% downpayment payable in 1 month, then 90% bank financing. I will use all of my savings to finance the downpayment.

Interest rate from Bank is 10% and I want to pay the condo in 20 years.

Using PhilPropertyExpert’s Loan Calculator, monthly amortization is P 39,083.37 or rounded up to **P 40,000**.

In addition to my expenses for amortization, I would also incur the following lifestyle expenses while in the condo:

Association Dues (Php50 per sqm X 50 sqm) | P 2,500 |

Insurance | P 1,000 |

Electric Bill | P 2,000 |

Water Bill | P 1,000 |

Internet/Phone/Cable | P 1,500 |

Property Tax | P 1,000 |

Furniture (assuming amortized for 2 years) | P 5,000 |

Transportation (assuming everyday commute) | P 4,000 |

Groceries (for in-house consumption) | P 3,000 |

Food (dinner with friends, dates, spontaneous lunches, etc.) | P 3,000 |

Misc (security money & other small, here-and-there, out of pocket exp) | P 3,000 |

Savings | P 5,000 |

TOTAL MONTHLY DUES |
P 32,000 |

Note that I have included savings in the monthly dues as you have little to no chances of saving in the 20 years of paying your condo’s amortization.

Thus, If I wanted to buy a condo and immediately live in it, I need a net minimum salary of P 72,000 or, given estimated taxes and misc fees at 20%, a gross salary of **P 86,400!! **(WOW STILL A LOT OF CASH HUHU).

If I factor in having 4 bed-spacers in one of the rooms and charging P 5,000 for each, then I get minus P 20,000 from total expenses, netting to P 66,400. But this is an ideal scenario and not all the time are there boarders to just come knocking right in.

This then means I have to maintain P 86,400 as a salary for 20 years to continue financing my home.

For an RFO 2-bedroom condo, to pay for in 20 years, I need a net minimum salary of P 72,000. Plus 20% taxes and fees equals a minimum gross salary ofP 86,400.

*Note: The values above are rough estimates and varies depending on the condo unit and year of purchase.*

If you think my calculations are erroneous OR that there is a cheaper way to pay for my condo while spending for cost of living OR that I’m too ambitious OR that you have a friend selling really really affordable condo approximate to my specifications OR whatever it is, I would love to hear your comments, suggestions, and advice!

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Disclaimer: The views and opinions expressed in this post are the author’s own. I am not affiliated with Philpropertyexpert or any other websites I have used in this post.

condominiums are really expensive in the philippines. not to mention that after 50 years, that luxurious room suspended on air you’ve been bragging about may not even be yours.