PauloAbad
Investing in real estate is considered a wise move by many Pinoys abroad. Aside from being more tangible than stocks and VULs, a house can also give its owner an inexplicable sense of security. However, buying a house might actually NOT be a smart investment for OFWs? Read on below to find out why!
It Comes With Steep Down Payment
Unless you plan on paying in one go, you need to make a down payment when buying a house. Down payments can range from 3.5% to 10% of the sales price, depending on the property and the loan product you availed. Either way, it can take its toll on any OFWs budget.
It Can Boost Your Debt Ratio
Buying a house could also leave you with an increased debt ratio. This is particularly true for homeowners who availed the property through loan programs. Lenders have the tendency to change policies regarding debt ratios all the time, so you need to maintain a low debt ratio as much as you can in order to pay for the loan.
It Could Damage Your Credit History
Bought right and managed properly, real estate can help give your credit score a nice boost. Botch things up, and you might end up with an aggravated credit history. This could not only leave you with diminished financial status, but it would also close many available financial facilities that could otherwise help you recover.
It’s Harder to Supervise
It’s not a bad idea to buy a house so you can earn rental income. However, being abroad might make it harder for you to monitor your would-be tenants, as well as attend to any problems that might arise in the property.
It’s a Long-Term Commitment
Being a homeowner is a long-term commitment. And while many OFWs are up to that task, others might not be so willing. If you’re among the latter group and you don’t intend on owning property in the Philippines in the long run, then being a homeowner might not be for you.
In Summary
As you can see, buying a house is not a smart investment for every Global Pinoy. Yes, it could generate a good amount of income and its value could appreciate overtime. But the costs that would come with renting it could easily offset its benefits (and not every home in the Philippines appreciates in value). Best think about it thoroughly before making a purchase.