A look back at my first adult purchase at 27 – a condo

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In 2014, I was 27 years old when I made my first adult purchase – a condo. By then I had been working as a lawyer for only about a year and a half. I had done the travelling and the shopping and felt that I was ready for real property (real estate). My decision was spurred by a desire to add an item to my real properties column in the list of my assets. Back then, my assets consisted mainly of personal properties such as cash, deposits, and shares of stocks. My emergency fund was meager but I yearned to fill in the real property portion.

However, my plans were not definite. Initially I only intended to see what was out there. My frugal mom accompanied me on several trippings to several properties in Cebu City, Mactan and Compostela. But I guess, when you find the right one (property), it just feels right to buy.

To give you a better perspective, here’s a first-person view. This is what I wrote about my buying experience back then:

 

So today, I paid my reservation fee on the pre-selling condo. The condo would be tiny as a tuna can but the price is relatively lower and will allow lighter payment terms as opposed to the bigger units.

As I reviewed the documents that I had to sign, I could feel myself sweating a bit. I was terrified inside. I had yet to receive my first pay check (I just started on my new job in Cebu at that time and had to wait for 2-3 months to receive my salary) But with my mom by my side, I braved it all, and signed, after reading the terms and conditions (which were predictably, in fine print). The reservation contract imposed a 4% penalty in case of late payment and in case of withdrawal. A lot of deductions were to be made such that the buyer’s payments would be whittled to almost nothing. The terms of the contract to sell were predictably pegged against the buyer. Of course, all these provisions are subject to compliance with the condominium buyer’s protection law.

I already had my desired unit located on the third floor picked out but today it was no longer available. I settled for one on the fourth floor. The price for this higher unit was lower by about PhP 3,000.00. Whew, that’s a plus.

Anyway. Legalities aside, I was terrified. Terrified that I might miss a payment and lose some or even everything. Terrified that I may not be able to do this, that I may not be mature enough to do this.

When I got back to the office (I reserved the condo on my lunch hour), I was informed that there would be further delay in the release of my salary since there was an issue with my other documents. Of course, I was not timely informed. Fortunately, I will be in Manila next week so I can sort this out myself. God really works in mysterious ways.

There are lots for me to do. There are some requirements that have to be submitted within 15 days. The condo developer gives a tight deadline. I have all of the requirements except for my payslip since, you know, I haven’t been paid yet since I started this new job. Was this an awful idea or what???

I hope that everything works out okay. My monthly payments start by 13 September. And then that’s all the way for the next 30 months of my life. God help me please. Mmmm. I realize I didn’t put much thought about the day that I picked for the monthly payment (13). Anyway…

On the other hand, I also feel excitement. This is my first adult purchase—a major one at that. I’m used to shopping for expensive designer bags, accessories or clothes. But I have never done this. This was something new for me. And it was exciting. This is not exactly my first investment. I’ve been investing in shares of stocks for years, but my first major one. A real property. Finally. My sister warned me that my plan of renting out the condo may not pan out, considering that Cebuanos cannot afford the same. My frugal mom thinks I should think of those things only once I have the condo turned over to me.

Worry fills my mind. I worry that my salary may not be timely released. And I would not be getting paid for a while. I worry that I might miss any monthly payment and the unit would be taken away from me. I worry of being defrauded, i.e. payments going to the wrong person. I worry that this property may not be worth it, or the return on investment may be less than what I paid for it.

I worry a lot of things, obviously. In this decision, I didn’t take into account, being possibly married. Married or not, my plan is the same, to pay for this by myself.

A part of me, however, feels a certainty that I CAN DO THIS. Whenever I have a goal in life, I devote a lot of energy towards achieving that goal.

xxx

As you can see, I’m not infallible. Can you believe I bought a condo when I hadn’t even started receiving my monthly salary yet (at that new job)? A myriad number of things could’ve gone wrong! The confidence of youth. Haha.

However, if I hadn’t bought that condo then, I would’ve just wasted my money on things that were not assets – more travel, more shopping, more dinners out, which some peers eagerly pursued. I have to admit that making that first adult purchase gave me pride in myself and a sense of purpose in life. I now had a reason to commit to a job (at least for the next 30 months at that time).

Despite my flighty decision-making, everything worked out so far. As I previously wrote, my double payments on the monthly amortization (on the equity) rendered a PAG-IBIG / bank loan unnecessary due to the outstanding balance being so low (about PhP 247,000 remaining on the balance). This amount is now sitting nicely in a bank account, earning a little interest, ready to paid upon turnover.

Right now, I am again on the cusp of making another major adult purchase. I’m going to need all the courage I can muster as I’m terrified of loans and mandatory monthly payments.

What was your first adult purchase? What was it like?

George

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3 thoughts on “A look back at my first adult purchase at 27 – a condo

    1. I’m not really fond of rent to own as the effective interest applied is usually higher than market interest. This is apparent from the seemingly reasonable rent but long “term” of the loan. You pay for a longer time than if you just got a straight up loan from pag ibig. I recommend looking at the gross selling price as opposed to monthly amortization. From there you can calculate if you can afford the 1) equity and 2) monthly amortization and 3) association dues and whatever costs of maintenance… Hope this helps

      Liked by 1 person

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