One day you will wake up thinking that you are ready to invest in a real estate property. Your main motivation might be to have a place to call home.

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Despite how challenging life gets, you know you have a roof above your head and all the comforts that come with having your own humble abode at the end of the day. This might be one of the smartest financial decisions you will ever make.

A condo unit typically comes with all the amenities you need. In terms of maintenance, it is a better real estate investment for you, compared to a standalone residential property. You have the building management looking after the welfare of the structure as well as the tenants. That arrangement is most suitable if you’re busy with your career and you do not have the luxury of time to fix a leaky roof, for instance.

But before you can make your condo dream come true, you first need to get your finances in order. Here are money-saving tips that will help you prepare for the purchase.

1. Pay outstanding debts

You want to start with a clean slate, financially that is. That means taking care of any outstanding debts under your name. Doing this will give you peace of mind. When it is time to pay for your condo unit’s monthly mortgage, you do not have any other payables to worry about.

Moreover, paying existing debts will be good for your credit history. That comes in handy if you plan to apply for a housing loan. Regardless of which type of loan provider you choose, whether it’s a bank or a moneylender, your loan application’s approval will rely on your track record as a borrower based on your credit report.

2. Save up for a housing nest egg

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There are financial prerequisites for buying a property. For example, you need to have enough savings for the down payment. According to the National Association of Realtors, the average down payment in 2019 for a condo or a house was 12% of the total property value.

However, that is not the only expenditure you’ll have to take care of as soon as you sign above the dotted line. There are also insurance and tax payments to think of.

It is best to save up enough housing nest eggs before making your purchase official. A good rule of thumb is to have at least six months and up to a year’s worth of savings for the mortgage. The purpose of this nest egg is to provide you with a source of funds in case of financial emergencies such as losing your job or requiring an expensive medical procedure while you are making payments toward your mortgage plan.

Having enough savings means you can funnel money into your monthly condo payment while you get back on your feet finance-wise.

3. Diversify your income

Whether you are working a full-time job or a thriving freelance career, it might be a good idea to look for alternative sources of income. While your earnings may be enough to rent a space, once you start paying a mortgage, it’s best to augment your income. That way, you won’t have to sacrifice your current lifestyle in favor of funneling funds to your loan provider.

On top of your full-time job or freelance career, you may pursue a business that is close to your heart. It could be a simple online selling enterprise. The goal is to set the amount of additional income you need and reach that goal through side hustles.

4. Make essential lifestyle changes

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This is most crucial if, for some reason, you cannot find other sources of income on top of what you already have. At the very least, you need to reassess your spending habits. See which expenditures you can afford to reduce or eliminate.

Perhaps you drive through Starbucks every day for an expensive cup of coffee. Confront yourself whether that is an expense you can do without. Alternatively, you can DIY your daily coffee fix by purchasing a coffee maker online. That one-time purchase can save you thousands in the long run.

Sure, you can still treat yourself to branded coffee from time to time. But cut this kind of dependency from your life and see how much money you can save.

5. Come up with a monthly budget

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Without a budget, your spendings tend to go all over the place, as you have no way of tracking how much money comes and goes. Mitigate this money mistake ASAP. You have budgeting apps at your disposal. Noteworthy names include PocketGuard, Splitwise, and Honeydue.

Once you have a clear idea of your monthly budget, make sure to stick with it. If you follow through with your financial plan in the first month, the second month will be less challenging. The third month will be easy breezy. Before you know it, your monthly budget controls your spending habit—a plus factor for your savings account.

6. Curb credit card use

We do not recommend that you get a pair of scissors and cut your credit cards in half. They come in handy for emergency expenses you do not have cash for.

However, it is in your best interest to use credit cards as wisely as possible. Try to refrain from using them regularly. That’s most important if you need to save up for the condo unit of your dream. Instead, use your debit card for essential purchases. That way, you are using the money you do have.

In Closing

Not everyone has the privilege of owning a condo unit. If you’re lucky enough to have this opportunity, regardless of factors affecting condo prices, at all costs, grab it. Consider it a clever financial decision, a reward for all the hard work you put into your career.

If you ever decide to resell the property in the future, you can also take comfort in the fact that a condo unit, as a tangible asset, will never go out of fashion. Its value, just like any other type of residential property, will appreciate over time. Thus, you’re earning passive income while living the life of your dreams.

Author Bio:

Rose is a licensed real estate broker and the co-founder of RE/MAX Gold Philippines, a real estate company in the Philippines. Acting and real estate have always been her passions since childhood. She confidently helps close record-breaking deals for residential and commercial buyers while leading her team to success. Check out their website at remaxgold.ph.