Since new condos in Metro Manila often are more affordable than houses and lots, especially for those who live independently, buying a condo might be considered a prudent real estate investment. Naturally, there are many considerations to make while selecting your perfect housing option, including the cost and affordability of the apartment or house, the flexibility and accessible payment plans, and the prime location, view of, upkeep, and convenience of the property.
If you are able to buy a house outright in Metro Manila, you have undoubtedly heard a lot of advice stating that using spot cash to buy a house or condo is the finest option available. But is all of this true? Let's say you have the money to invest in a premium condo or piece of real estate in Metro Manila and you are able to pay for it all at once. Would you rather pay it all at once in cash or in installments?
Spot Cash: What Is It?
Let's start with the definition of spot cash. Spot cash transactions in real estate investing are those that happen right away as opposed to payments made later, like in installments. There's a lot on condo in Manila that offers spot cash as mode of payment. The majority of people discover that making payments in installments rather than cash on the spot is more sensible. But spot cash when buying a condo in Manila has perks as well.
Spot cash initially appears to be a fantastic choice because there won't be any interest or mortgage payments to worry about. Installment payments in total is way more beyond the average TCP of condo in Manila. It appears much better to pay the whole money in one go rather than thinking about making monthly payments and making your family your own budget. However, it's not as easy or a good concept as it sounds.
Now, here is the question: Is it wise to purchase a whole condo in manila with only cash?
Pros and Cons of Spot Cash
Before committing fully to your purchase, you should weigh the benefits and understand the drawbacks of using spot cash when buying condo in Manila in addition to the requirement that you have enough money in your account to pay the full purchase price of a condo or house.
PROS of Choosing Spot Cash
1. Owning your home outright
If you purchase the unit with cash, you are now the sole owner. You are an instant property owner in Metro Manila. It can be liberating to realize that you owe no one anything but rent for the space you rent in your house. Furthermore, in the event that you miss a mortgage payment, there is no chance that the lender will take your house.
If you have a mortgage, even though your name might be on the title, you do not actually own the property outright. Instead, the lender owns a portion of the property, depending on how much equity you have in your house.
It is very tempting to think that there will be no monthly mortgage payments to make. You won't be required to pay a lender for your mortgage because you won't be leveraged. You could argue that as soon as you make the spot cash payment, the house you purchased becomes yours.
2. Paying in cash is cheaper
One advantage of spot sale and cash payment for sellers is that they will get paid immediately on the first sale spot. One of the obvious advantages for purchasers is that the total amount due at sale is less than that of installments.
When you pay with cash on the spot, you avoid paying exorbitant interest rates and other unstated costs that come with choosing to pay over time.
CONS of Choosing Spot Cash
1. Tying money in one investment
Installment payment plans allow you to save regularly to cover the monthly cost while allocating a sizable portion of your income for other purposes. You may find you are allocating your entire budget to a single investment when you pay spot cash.
Although purchasing a condo with spot cash can raise its value, it also concentrates all of your available funds in one location. Probably the biggest drawback of paying cash for your next house is this. You cannot diversify your investments if all of your money is invested in one single thing. You won't have much left over for other investments if you invest all of your money in one.
2. Less money for other expenses
As previously mentioned, if all of your money is going toward paying spot cash, you generally have less money set aside for other expenses.
What would happen if you found yourself in a financial emergency later on and were unable to take action because you had invested nearly all of your money in purchasing a condo? Always have extra cash on hand in case of emergencies.
Generally speaking, you and children should always have an emergency fund that covers three to six months' worth of expenses. It is not a good idea to pay with cash and run out of money for other needs later on.
Spot Cash vs. Installment
There are advantages and disadvantages to both installment payments and spot cash. One of the benefits of spot cash payments is their simplicity. They immediately improve the seller's cash flow because they are settled and recorded in accounting ledgers on the same day. But, they might negatively impact the buyer's cash flow. Your company's budget may be restricted until you can reload your accounts if you use up all of its cash reserves on a big asset. However, installation payment options let you spread out the cost and save more for unexpected expenses. They usually have interest rates attached to them that increase the cost over time when compared to a cash transaction.
When purchasing a condo, there are a few advantages to paying with spot cash. But there are some issues that need to be resolved. Therefore, before deciding how to invest in real estate, carefully weigh the benefits and drawbacks if you have that kind of money to pay in full right away. Always choose a trusted real estate developer. Just like Vista Residences!
Why Vista Residences?
The most prestigious condominium division of Vista Land & Lifescapes Inc., the biggest homebuilder and top integrated property developer in the Philippines, is Vista Residences.
Vista Residences was founded in 2003 and provides upscale condo unit close to some of the city and nation's most prestigious colleges, major transit hubs, and significant commercial areas.
With over 38 mid-and high-rise buildings under active development, Vista Residences continues to address the rising demand for condominium living while meeting the different demands of demand from both Filipinos and foreign investors. They have multiple developments in Metro Manila especially in the biggest cities such as Eastwood City and Quezon City.
Vista Residences prioritizes security, comfort, and ease of use for all of its tenants and investors. There are benefits to living close to a large city in almost every way. The condo unit they offer are ideally located near businesses, offices, schools, and other facilities and city has. The majority of Vista Residences homes come with first-rate amenities like a fitness center, function rooms, game room, garden, swimming pool, sauna, and more! Additionally, they have businesses that cater to the requirements of the neighborhood, such as salons, coffee shops, Allday convenience stores, and other services. Almost everything is easy access.
The comfort of the properties for homeowners and investors comes next. The properties' features and amenities have been designed with comfort in mind. Providing comfort and a home to those who wisely chose to purchase a condo is one of Vista Residences' top priorities. The business takes care of details to provide the greatest condo living experience for its customers.
Investors should prioritize security over comfort and convenience because Vista Residences condominium units have round-the-clock security services. This much work is done to ensure that everyone who lives in the condo communities owned by Vista Residences has a safe, secure, convenient and comfortable condo.
Vista Residences offers its investors the greatest condo living and development while placing a high priority on security, convenience, and comfort. They are providing the best condo developments for investments from Luzon, Visayas, and Mindanao, all situated in good locations near schools, offices, and other important Philippine city landmarks.
WHAT DO VISTA RESIDENCES OFFERS?
- Convenience and Prime Location
- Comfortability
- Security
- Promos up to 25% Discount
Vista Residences offers a discount when paying with cash for several reasons:
- Avoiding Pag-ibig or Bank Processing Fees: Lending organizations typically charge buyers and sellers a fee for each transaction they process. These costs can add up rapidly for businesses that handle big volumes of merchandise. By providing incentives and a sizable discount to consumers who pay with cash, businesses can avoid these fees and save money.
- Faster Payment Processing: Cash transactions can be completed far more quickly than finance transactions, which require authorization and verification. This can improve cash flow for companies as well as customers by speeding up the payment processing times.
- Encouraging Sales: A cash discount can persuade a customer to make a purchase from a business if they are trying to save money or are on a tight budget.
- Building Customer ties: A cash discount can assist a firm in building stronger ties with its customers by providing them with an advantage that isn't available to those who take out financing, which usually takes 15 to 30 years to pay back.
- Managing Cash Flow: By taking more cash payments, businesses can reduce their dependency on credit and improve cash flow management. This can be helpful when credit is hard to come by or when the economy is unpredictable.
In general, providing a cash discount can benefit both clients and companies. It can enable the former to cut costs on fees and processing times, while the latter can pass savings savings to clients and have opportunities to forge closer bonds with them.
Let's return to our initial question: Is it wise to purchase a condo with cash only?
The state of your cash flow will determine this. Just because you have a lot of money right now doesn't mean you should be spending it all on things. Both installment and cash purchases have their proper times and places. Paying spot cash can be a good option if you won't be financially burdened by having to spend that much money, or if you don't have any other area in which you'd rather invest your money, either personally or financially.
In the end, it's always preferable to purchase what you can currently afford, so hold onto your money, give it some serious thought, and learn to use it prudently.
