Newly-wed couples, people who want to be independent, and those who are moving into different locations due to work or to get some peace of mind usually undergo the dilemma of deciding whether to buy a house and lot or to rent.
The decision whether to buy a house and lot for sale or rent is not easy because it affects the household budget. Aside from this, some things should be considered to find which one suits your needs.
In the Philippines, there has been a decade of debate on which one can provide savings and convenience. Some say renting does provide savings. Others prefer buying a house and lot for them to call something their own. For those who are uncertain regarding their stay in a specific location, leasing is their best option. But what fits Filipinos who want to start a family or who want to be independent? Is it renting? Or is it owning a property?
OWN A HOUSE AND LOT
REASON TO BUY
Buying a house is some of the new couple’s priorities and those who want to live independently. Having your own home means comfort, flexibility, and security. Other reasons to own a house are the following:
PRIDE OF OWNERSHIP
Pride of ownership tops the reasons why Filipinos buy house and lots. Why? Having your own home gives the satisfaction or sense of personal growth for achieving a goal or a dream and at the same time sense of security and stability.
House and lots are one of the best investment you can get as it grows over time. This can be due to factors like the accessibility of the property’s location, zoning laws of an area, and inflation policies.
Aside from this, the value of the property increases faster if it is located in regions on the rise or those areas located in or near commercial areas, business districts, and tourist spots.
STABLE MONTHLY PAYMENTS
Managing your monthly budget is easier if your monthly payment is stable.
When you choose to mortgage a house and lot, the interest rates provided by either bank financing or PAG-IBIG, are fixed. Banks usually offer fixed interest rates for about one to five years. Pag-IBIG Housing Loan, on the other hand, offers fixed pricing for up to 30 years.
Fluctuating property taxes or property insurance may change, but that may not happen as often as how rent payment increases.
Having your own home gives you the liberty to do whatever you want in the four corners of your home. This means you have a sense of independence where you can paint the walls with any color you desire, attach permanent decors and fixtures or decorate your home according to your taste and preferences. You can also build a mini garden, install a ready-made swimming pool, or host parties without asking permission from any landlord.
WHAT TO CONSIDER WHEN BUYING A HOUSE AND LOT
There are five things that you need to consider the most when buying a property. These are the location of the property, the reputation of the developer, budget or how much are you willing to pay monthly, the length you want to pay the mortgage, what financing should you choose, and the property title.
One of the challenging things to do and consider when buying a house is its location. An ideal location is near the workplace and has accessible routes going to the hospital, schools, market, malls, and police station. Areas like this are called regions on the rise or near commercial areas, business districts, and tourist spots.
The price of properties located in regions on the rise might be high, but it can cut some expenses in transportation in the long run. It is also convenient to live in locations like this because it is accessible to your daily needs.
Properties located in regions on the rise appreciate their value faster than properties away from business districts and commercial centers.
The reputation of the developer or home builder is another thing that to consider. Nowadays, a lot of fraudulent activities in the real estate industry happens. Transacting to a reputable developer means fewer chances of experiencing scams, schemes, and fraud.
A credible land developer maintains their standing, executes timely, and delivers what they promise. They ensure the quality of the house, its surroundings, and the community they build, to the material they use and design aesthetics. They also provide a comfortable and lavish lifestyle to homeowners by building amenities such as 24/7 security, clubhouses, internal access roads, fitness center, and playgrounds.
One reputable developer in the Philippines is Vista Land and Lifescapes Inc. or commonly known as Vista Land. Vista Land is the largest homebuilder in the Philippines that offers a wide range of housing products that cater to the needs of every Filipinos from luxurious houses, mid-income housing segments, affordable low-cost housing, and vertical residences. Vista Land is also known for its real estates brands such as Brittany, Crown Asia, Camella, Lessandra, and Vista Residences across the Philippines.
Budget plays a major role when planning to buy a house and lot for sale. It dictates what type of house and lot you can afford to get and pay. What you need to consider when checking your budget are:
- Reservation fees and downpayment for the house and lot.
- Monthly mortgage fees
- Real property tax
- Association fees
- Property insurance
WHAT FINANCING TO CHOOSE
There are two options to consider when you mortgage a property in the Philippines – Bank Financing or Pag-IBIG Housing Loan.
The two might seem the same, but they have different requirements, to the loan amount, terms, and interest.
Pag-IBIG Housing Loan has few restrictions and requirements for applicants compared with bank financing. Banks, on the other hand, conduct background checks and require to submit supporting documents.
For the loanable amount, the maximum for the Pag-IBIG Housing loan is up to P6,000,000 or 80% of the total accumulated value (TAV). Bank financing varies. It may be the exact amount or 70-80% of the appraised property value.
Lastly, the banks offer low interest rates with a fixed rate for about 1 to 5 years. Pag-IBIG Housing Loan, on the other hand, offers fixed pricing for up to 30 years.
Another consideration that you need when buying a house and lot is the authenticity of the Property Title.
To make sure that the title is clean, it is a must to check the following:
- Quality of the paper used
Forms used in property titles are printed by the Banko Sentral ng Pilipinas and have a similar texture to a bank check.
To check if the title is authentic, all you need to do is held the title against the light. If the Land Registration Association watermark is visible through the paper, the title is authentic.
2. Verify the identity of the seller
With the rising fraudulent issues in the real estate industry, it is a must to check the background of the agent or seller. To do so, you can contact the developer and ask if the agent is with them.
If the seller and house are not associated with a developer, you need to check if the seller owns the property. If the property title is under the parent of the seller, you need to be assured that all of his family members agree to sell the property.
3. Check the description of the real estate on the title
The land description specified in the property title should match the actual land area when surveyed.
4.Check the status of real property tax
To check if the property tax is updated, you can visit the Assessor’s Office of the municipality where the real estate is situated.
If it is not updated, the seller needs to update the payment and make a notarized agreement that he will do so.
WHERE TO LOOK FOR HOUSES AND LOTS FOR SALE
Finding a house and lot for sale from a reputable developer is quite challenging nowadays due to different scams and schemes done by people who pretend to be the developer’s representative or seller.
Good thing property listings platforms are now available online. One of which is All Properties PH.
All Properties offers property listing for ready homes, and lots for sale under one of the country’s biggest and reputable real estate companies, Vista Land and Landscapes.
All Properties help future homeowners find a house and lots for sale in key provinces and regions on the rise in the Philippines. Some of which are from Vista Land and Landscapes’ subsidiaries, Britanny, Crown Asia, Camella, and Lessandra located in Ilocos Sur, Pampanga, Pangasinan, Antipolo, Cavite, Iloilo, and Cebu.
With All Properties, you can get your dream house and lot in a well-developed community through the help of professionals.
REASON TO RENT
Rent is an agreement between a landlord and a tenant where payment is made for the temporary use of a property owned by the landlord. Rent is another option that Filipinos also consider when looking for a place to live in. Some find it convenient, and others prefer this option because they move from place to place due to their business or employment nature.
Aside from this, rent appeals to some Filipinos who are not yet ready and capable of buying a property. Other reasons why Filipinos rent is the following:
NO MAINTENANCE TO WORRY
The landlord or the person who owns the property, may it be apartments, houses, land, or real estate that is rented, is the one responsible for repairs and maintenance of the property.
The tenant usually just informs the landlord of the things that need repair and maintenance. The landlord will be responsible for looking and paying for professionals who can fix and maintain the property.
FLEXIBILITY TO MOVE
Filipinos who usually rent are not sure if they will stay in the same area for five years. Most of them have businesses or employment that require moving frequently. Buying and selling a property in this kind of scenario is not practical at all. Shelling out cash for a downpayment for a new home and selling the old property can take too much time, effort, and in some cases expensive.
EASY TO MOVE IN
The availability of fully furnished apartments and condominiums makes moving easier for those who consider renting. Renting a fully furnished property gives convenience to tenants because the property is equipped with all the required items of a household. From sofa to tables, dresser, bed, and for some even electronic appliances, utensils, and glassware in the kitchen.
HIGH DOWN PAYMENT AND YEARLY FEES
Some Filipinos consider renting because they are not yet ready or not capable of paying both reservation fees and down payment for a property, as well as the monthly mortgage fee and real property tax.
RENT CONTROL LAW OF THE PHILIPPINES
The Rent Control Act of the Philippines is a law that protects lower-income class housing tenants against unreasonable rent increases. The law declares that the same tenants renting a property and pays less than Php4,999.00 each month are not allowed to get an increase on their rent by more than two percent per year. Those paying Php5,000.00 to Php8,999.00 are not allowed to get an increase of seven percent, and eleven percent for those paying monthly rent ranging from Php9,000.00 to Php 10,000.00.
In Rent Control Act, landlords are also not allowed to demand more than one month of advanced rent and more than two months advance deposit.
WHAT TO CONSIDER BEFORE RENTING
Renting is a contract between a landlord and a tenant. Since it is an agreement you should study, research, and take into consideration some matters before entering into it. Some of the things that need to be considered when renting are location, condition of the landlord’s property, budget, and responsibility.
The location of the property matters the most when renting. An ideal place to rent is near your workplace and has access to hospitals, markets, public transportation, and places you usually go. Doing so can cut transportation expenses, provides convenience, and save time.
CONDITION OF THE PROPERTY
Before renting, it is a must to do ocular visits to check the condition of the property. Doing so will give you a chance to check if there are major repairs or recurring problems. The rent you pay should be worth the current state of the property.
Another thing that needs to consider when renting is how much the rent costs. Rent usually ranges from Php1,000 to hundreds of thousands. Rent depends on the location of the property, its accessibility to the day-to-day needs, size, and the number of available rooms.
Rent cost increases yearly, but the Rent Control Act of the Philippines declares that the same tenants renting the property and pays less than Php4,999.00 each month are not allowed to get an increase on their rent by more than two percent per year. Those paying Php5,000.00 to Php8,999.00 are not allowed to get an increase of seven percent, and eleven percent for those paying monthly rent ranging from Php9,000.00 to Php 10,000.00.
For advance payment and deposit, the Rent Control Act of the Philippines declares that landlords are not allowed to demand more than one month of advanced rent and more than two months’ advance deposit.
RESPONSIBILITIES OF THE LANDLORD
Before entering into the rental agreement it is a must that both parties (owner and tenant) should be familiarized with the responsibility of the landlord such as repairs, maintenance of the property, association or condominium fees, and other bills.
OWN OR RENT A HOUSE?
Owning and renting a property has an advantage and a disadvantage but the former and latter may depend on a person’s needs, wants and financial capacity.
For some owning a house can give them more freedom to do whatever they want in their homes while others prefer to rent a fully furnished property. Some people think buying a house is an investment and grabs the opportunity of low-interest rates given by bank financing or PAG-IBIG and some think that renting can provide them more savings because they don’t need to pay annual property taxes and their yearly increase would range from two to eleven percent.
Despite the added expense for yearly fees associated with owning a house, many Filipinos choose and dream to have one because it provides a permanent and secured place to comfortably build a family and raise children.
Have you decided where to look for a house and lot for sale? Check out All Properties and browse through hundreds of listings available in major locations nationwide!