It’s typical to spend your 20s having fun or figuring out what you want to do with your life. But if you know what your goals and priorities are, you get a head start as you can work on them sooner and while you’re still strong. This is especially true if your objective is buying a house at 30.
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Having your own home is a big step towards becoming independent. This gives your control over the design and use of your place. You get to invite whoever you want. You can go in and out whenever you like. Inside, you can feel comfortable and safe.
If you want to invest young, real estate is one thing you should look at. Land area is a limited resource. Meanwhile, demand is always there. As you grow older, property value is likely to increase. So if you buy before you hit middle age, you may expect a return of investment in the future.
Purchasing even the most affordable house and lot requires some preparation though. With the following guide on how to buy a home in 30s, your dream of becoming a young homeowner will soon turn into a reality.
Have a stable source of income.
Before finding out how to buy a house, you must first become self-sufficient. Unless you have hefty savings or inheritance, you have to grind. Get employed, manage an enterprise, or do both.
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However, it’s not enough to have an income source. It should be stable which means it should provide a consistent flow of money every month. If your job or business is seasonal, you need to change course. As a worker, this may require asking your employer to regularize you. In case your skills are badly needed, you may even negotiate your rate. If these are not applicable to you, you might want to seek a job elsewhere.
For an entrepreneur, you have to study your market and revise your marketing strategies accordingly. Is there a way to turn the seasonal demand into a continuous one? Determine what your target market needs and turn that into a product or service. Customers’ preferences are bound to evolve so make sure you can catch up.
With regular employment or a stable business, you get more properties to choose from. After all, realtors, brokers, property owners, and lending institutions consider you as more reliable. You seem better than prospective buyers who are unemployed or those who have businesses that are on the verge of bankruptcy.
Save 20%-30% of your monthly income.
Unless you’re earning millions in a month, you need to save so you can satisfy a down payment at least. This is one habit that will likely answer your question as to how to buy a house.
You might be wondering how long and how much do you have to save. It’s advisable to aim for 20% of the amount of down payment for your desired property. For instance, if you’re contemplating on a 2-million-peso worth of house and lot, your target savings should be around 400,000 pesos.
As to how long you should save, it depends on the amount you set aside each month. The highly-recommended range is 20% to 30% of your monthly income.
The best time to carry that out is right after you get your first salary. If you’ve failed to do so, you can start doing it now.
If you don’t have any dependents, you can exceed the amount of your monthly target. However, it’s not advisable to go beyond 30%. You still had to consider your savings for your emergency fund and other expenditures.
Moreover, your savings should be in liquid assets. These include hard cash as well as the money on your bank accounts. Other examples are accounts receivable, stocks, bonds, and mutual funds. These are assets that you can convert into legal tender within minutes or weeks.
In contrast, non-liquid assets are those that you can’t easily use as legal tender. Vehicles, equipment, and collectibles fall under this category. Real estate property is also considered non-liquid. To convert them, you have to sell them first.
Check out affordable housing options.
Forego expensive housing offers for your first home purchase. They’re usually a luxury and a liability anyway, and not an investment. Furthermore, with their high property values, you may need to work and save for decades before you can meet the current amount. But what if it costs even more in the years to come, which is likely to happen?
For now, choose among properties that are reasonably priced. To find out if it’s an affordable house and lot, its property value shouldn’t go beyond three to five times of your annual income (excluding monthly deductions). This applies to condominium units as well.
Thankfully, there are affordable options from recognized developers in the country. One example is Lessandra. It has the Starter Series and Angat Series which are suitable for the tight-budgeted homebuyers.
Establish passive income streams.
If you’re an employee, there’s a possibility that you’ll get fired. If you have a business, inflation may lead to higher expenditures and thus, lower revenues. Due to unpredictable factors, it’s advantageous to have several sources of income.
There are different ways for you to invest young. One is to get into stocks. There is plenty of information online so there’s no excuse for you to not know how to do this.
Maintaining different income sources seems a daunting task. However, there is a type of income that you can generate even without actively working on them. This is collectively known as passive income. The classic example is the interest you earn from your savings account.
Limited partnership is another source of passive income. As its name suggests, one of the partners has limited control over the business. His role is to provide capital for the venture. Meanwhile, the other partner makes most—if not all—decisions for the business. If you have a dependable partner, you can simply invest your money and let him/her manage your business.
Depending on your skills, you can also try out creating an online course or writing an eBook. You can sell these without actively doing so. Other passive income ideas include renting out properties and equipment, and offering copyrights for your designs or songs.
Get a side gig.
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Do you have free time left during the weekends or at night? You might want to hunt for a freelancing job online. There are small projects you can work on. While they may not give a lot, the extra cash can bring you closer to your target savings.
Proofreading, editing, typing, and transcribing are some of the popular freelance jobs you can try. If you have the knack for writing, you can score gigs on making captions, book blurbs, articles, and short video scripts.
Side gigs also cover offering consultancy services. If you’ve been in a trade for years, you can provide such service to those in your area. Being a tutor, be it face-to-face or online, is also worth trying.
Don’t be afraid to try out selling as well. You can resell your preloved items like clothes, bags, and shoes. Search for a bulk buyer if you don’t have a lot of time for this activity. You might also want to do live-selling. If you have collectibles like albums, books, and toys, consider putting them in an auction, too.
Are you good at cooking and baking? Offer your homemade meals, cookies, and cakes online. You can even make a cookbook and sell it on Amazon. With your phone, you can even record yourself preparing meals and post the videos online. You might be able to monetize them once they get a lot of views.
Shop for an ideal housing loan.
More often than not, the answer as to how to buy a home in 30s is to take advantage of a housing loan. Even if you haven’t saved enough for a down payment, it’s advisable to look at your mortgage choices early on.
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Banks and the Pag-IBIG Fund are the major providers of housing loans in the Philippines. As early as now, get to know the basic requirements that each provider asks for home loan applicants.
Once you start earning, you should also begin paying monthly contributions to Pag-IBIG. The HR departments do this on behalf of the company employees. As a freelancer or entrepreneur though, you have to pay your contributions by yourself.
If you’re going to take a bank loan, limit your search to nearby providers. Compare and contrast their offers. Be mindful of their differences in interest rates, repayment period, and amount of required down payment. If their websites feature online loan calculators, take advantage of them as well.
Even if you have yet to choose a home, you can visit your preferred bank to inquire about a housing loan. Some banks may accommodate you and allow you to save for the down payment before you get the mortgage.
At first, it may seem that the loan’s interests are a disadvantage. However, think about how the value of real estate properties increases over time. With a home loan, you can purchase a home sooner and avoid high prices later on.
Make plans on how to maximize your would-be property.
There’s a potential return of investment even if you purchase the most affordable house and lot in the market. For instance, if you’re not going to move in for a few months, you can rent out your property in the meantime. If you’re moving in soon and your property has an extra room, consider leasing that out as well.
Is your property near tourist destinations or a business district? You might want to cater to short-term travelers. In case you have a spacious yard, you can let car-owners park for a fee. You can also put up a small shop therein. Another option is to construct an establishment for you to rent out for commercial purposes.
Identify your non-negotiables when it comes to property.
You might be searching how to buy a house so you can have a place that suits your lifestyle. In that case, it’s vital to determine what features you want your home to have. If you’ll live with your family, take into account their preferences as well.
This involves knowing how many and what kinds of rooms and spaces you need in a house. You don’t have to weigh on designs that you can alter. These include paint and furniture.
Live according to your means.
Some young earners prefer to splurge on clothes, shoes, gadgets, and travel. That’s fine especially if their priority is to enjoy the fruits of their labor. However, if your desire to have your own home is greater than your desire for luxuries, you have to think twice before you spend your hard-earned money.
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The way on how to buy a home in 30s isn’t just about getting financing options. You should also manage your existing money. Budgeting helps you meet your monthly target for your savings. Aside from that, it trains you to become responsible about your future expenses as a homeowner.
After you purchase a home, you’ll have weekly and monthly expenditures like groceries, electricity, water, and Internet services. If you get a home loan, there’s debt repayment. Every once in a while, you may also need maintenance services for your house and appliances. There’s the annual property tax as well.
These sound like a lot, but it’s manageable. As early as now, learn to live within your means especially if you’re saving for a home purchase. For your meals, focus on nutritious yet affordable ones. For your clothes, simplify your style and invest in long-lasting essentials like black suits and black pants. For recreation, try activities that don’t cost a lot. Examples include visiting a nearby park or watching public performances.
Buying a house in your 30s involves some challenges, but with the above tips and the right attitude, you can overcome them all. You get a step closer to that goal by looking at Lessandra’s affordable house and lot offers.
Lessandra is an affordable house and lot developer. For an array of affordable house and lots for sale in the Philippines, check out Lessandra Project Listing. For more information on how to own a house and lot in the Philippines, visit the Lessandra Guides and FAQs section!
