Investment vs End Use: An objective-based purchase guide

There are two types of property buyers: those in search for their home and those in pursuit of profit. Both of these mean turning a lifetime’s worth of hard-earned money into a real estate property but that is where the similarities end. For starters, purchasing a house or a condo for investment means having the property rented out for profit or be sold in the future once the value appreciates; end-use, on the other hand, means occupying the property yourself.

Generally, buying a property for end-use offers much more leeway to sacrifice a few factors versus those who are purchasing for investment. In this guide, we have listed things to consider before buying a new home based on your intentions for the property.

Readiness of the property

Investment - Investors have the luxury of time to study potential properties that will yield maximum profit in the future. That said, it would make sense to purchase a property in early stages of development or construction with generally cheaper prices before selling for a higher value in the future. This also buys you time for development in an area to progress as properties in high-demand areas yield higher rental prices. But just like any investment, the downside is the certainty of gains. You would also need utmost patience as it may take time before seeing returns in your property. End-use - Property options for end-users depend on their financial status at the time of purchase. In a general sense, you would want to have a property ready for occupancy (RFO), especially if you are looking to move as soon as you want or need. This may entail, however, higher costs as most promos or discounts come at the pre-selling stage so if your budget is too tight to dole out some extra cash, you may also consider properties nearing possession to slash a few pesos off the price tag.

Proximity to key locations

Investment - As mentioned, properties within or close to business districts offer higher returns in terms of rent prices or profit when sold in the future. Simple economics: the higher the foot traffic in an area, the higher your return of investment (ROI) would be. But then again, some areas may not be fully developed by the time the property is awarded so you would need to consider your short- and long-term goals before deciding between developed and developing districts. End-use - Convenience should be at the top of your mind. You would want to look for a property close to locations you frequently go to. If you are moving for work, find a place close to your office or transport hubs that will easily take you to your workplace; if you are moving with your family, find a property that also gives direct or convenient access to school. You should also consider proximity to lifestyle centres or shopping malls and groceries.

Type of property

Investment - Just like the market, the type of profitable properties quickly shift and vary from one location to another. Development projects in business areas typically cater to the demand of professionals, particularly for condos; houses, on the other hand, are typically more sought after in the outskirts. End-use - Obviously, you would be able to determine which property suits your needs best. A bigger property fitted with more rooms would be more suitable if you are moving in with your family, while a studio or 1BR condo unit would do best for young professionals living solo. You may also want to consider lifestyle facilities available in a village or condominium building.

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