surveying millennials (or anyone) - reasons why would you not want to invest in a property

[izakmiles]

Hi there, I’d like to survey people here why you might not invest in real estate, even though it has the potential to increase in value over time. What are your reasons for preferring other investment vehicle over real estate?

Thanks in advance!

 

[jakofhears]

@izakmiles We bought a small house dito sa province para parentahan. Owned by a family friend and okay naman yung property so naggo kami kasi gusto namin iexplore ang real estate, gusto rin namin ng first hand experience sa pagiinvest sa property. Sa totoo lang after we experience it firsthand, we didn't like it, I think it is not for us. Here are the reasons why:

1. Ang daming paperworks and ang gastos din ng mga fees pag nagaacquire ng property. Grabe rin yung hassle and effort to do due diligence para sure na malinis ang titulo and di kami magkaproblem in the future.
2. When we got the property, need irenovate before rental para maging mas attractive. Ang mahal na ng construction materials and labor these days.
3. Ang hirap maghanap ng maayos na tenant. Tapos pag may tenant na, need pa rin bisitahin yung property to check for maintenance once in a while.
4. Ang tagal ng ROI. We feel na overpriced yung properties kahit dito sa province tapos maliit lang yung rates ng sahod nga mga tao dito so di rin pwede magtaas masyado ng renta.
5. Kung ayaw naman parentahan, need pa rin bisitahin yung property kasi baka may magsquat. Ang hassle imaintain. Kung lupa yan, need mo pabakuran and need ng caretaker kung di mo mabibisita lagi.
6. Kung gusto mo ibenta, katakot takot na fees and paperworks ulit. Hindi rin siya ganon kaliquid like if bigla mo need ng money at naubos na emergency fund mo, di mo maliliquidate agad into cash dahil maraming proseso.

We didn't like the experience. We feel na di worth it yung hassle and pinagdaanan naming stress for the return. Sa ibang investment vehicles like MP2, stocks, crypto, etc. you can buy or invest ng hindi lumalabas ng bahay. If marunong ka rin magtrade, you can get huge returns. If need mo ng pera, very liquid din. We will keep the property for diversification pero hindi na kami bibili ng additional properties.

 

[josh12]

@jakofhears As someone in the landlord/flipping business, I agree with all points.

Just to note on some points,

1. Don’t buy property expecting ROI via rentals, at a modest 20-25K a month for a property here in Metro Manila, two to three decades pa mababawi yan. Rental income is more akin to annual interest.
   Bonus nalang yung rent or pang “semi-passive” income.

You need to sell in 3-5 years to realize ROI + appreciated value. This is where you really make money, buying cheap lots and selling in a few years.

1. If you plan to continuously invest in real estate, you really need networks in the LGU and reputable real estate agents to help with paperworks and expedition of the process xD otherwise, madugo talaga.

 

[96433469]

@jakofhears This should be the top comment.

 

[acedeck]

@izakmiles Commitment issues about where to settle down. Also, given how much effort it takes to maintain property, I would only buy to live in (or at least vacation in) and I wouldn't be comfortable renting it out anyway. I'd much rather just invest in funds and stocks, para mas liquid din in case I ever need it and returns can be just as good/better for less effort.

 

[izakmiles]

@acedeck I have the same dilemma and thoughts! Thanks for sharing!

 

[pabloholder]

@acedeck Same! When I buy a property, it’s one I’d live in.

 

[moonstar2024]

@izakmiles Although real estate appreciates over time, madami din ginagastos to maintain it. Especially in condos. So if it's not really generating income for you, additional expense lang din.

 

[lizdirect]

@izakmiles Because real estate is currently overpriced. Especially in the metro, it’s not something a regular employee can afford. If looking for properties elsewhere, make sure they are accessible and manageable. Idle properties are liabilities, not an asset!

 

[jllll]

@izakmiles For me, it’s a personal ethics thing. Housing is a basic need/right. I would invest in a property for the purpose of living in it, but I don’t want to participate in purchasing of properties for the sake of investment or reselling in the future when pricing has appreciated because it contributes to the inflation of housing prices which means housing becomes more and more inaccessible for the regular person.

But I wouldn’t judge people who do that. Gets naman. I just won’t participate in it myself.

 

[oatewe]

@jllll Given the chance, I'd rather invest in a commercial lot/agricultural land that can produce value

 

[beboidephanoi]

@izakmiles Unless you live in it, you need to sell the thing for the whole "it appreciates over time" to work.

I'd much rather invest in my online business and increase income + liquidity than put money in the ground and hope I won't need to sell it fast for an emergency.

PS I will inherit a property that's worth 18 million (house and lot in Pasig), so my take is coming from a place of privilege.

 

[toolbelt]

@beboidephanoi My uncle bought 15 m lot sa nuvali 2013, Wala lng, Hindi rin nagbahay dun, investment lang daw. Taas na ng value ngayun. Isa lang Yun sa mga nabili nya, madami pa xang properties sta Rosa, Davao, gensan, Cebu. Mga condo na di nya Naman tinitirhan.

Swerte lng dahil mga extra nya Yun. Wala p xang properties nabenta, rental pa Ngayon.

 

[drez_113]

@izakmiles Had a similar discussion/ question before with some friends. The common answer revolves with the ff:

• Huge commitment- most of the younger generation, are nomads. Some are in school, some have their internships, some have been jumping between workplaces for learning. Hence, they can't commit in one place lalo na if wala pang own family. It's a lot easier to rent and be accessible with your school/ place of work- than spend half your waking hours in traffic..
• Big outright investment- There's a very big financial effect early on that most can afford. And for those who can afford, are usually financially savvy enough to realize that the interest rates will cut off their growth potential.
• Opted for more risky, but better short-term returns- Investing in stocks, and other instruments may provide more risk but near similar returns. For short term growth appreciation, lalo if maliit lang capital; they opt these types of instruments. Real estate is very capital intensive. And not really as passive as some might claim.
• Too Heavy for young couples/ with kid- The initial gastos from pregnancy, childbirth, moving and work adjustments- so inshort destabilized cashflow: So kahit its ideal to have an own place to settle down is not that easy kasi ung risks na walang extra eats up their peace of mind lalo na pag may kid na.

 

[onechristianlight]

@izakmiles if may extrang budget go, if wala then not advisable. hirap i-dispose if kailanganin mo agad ng pera. That's why.

 

[aurelia7]

@izakmiles I might migrate to another country, so di rin magagamit.

 

[aussiecatholicboi]

@izakmiles brave of you to assume we can afford it.

i actually bought a house, but I dont feel like its liquid

 

[izakmiles]

@aussiecatholicboi Hahaha I know right. Some millennials are doing very well though!

 

[markos]

@izakmiles I invested in crypto last year I have 3x my crypto portfolio this year. Property in city areas eg. BGC Makati,Pasay are way over priced specifically condos! The workmanship is crappy and does not last in terms of quality of the condo. Would rather buy a house and lot in non city area where I can stay in a house and lot.

 

[davidail1]

@markos I was about to post coins. Liquidity at yung asset mas feel mo.

Yung mga cycle ~2012, ~2016, and then this run. Kung nakakasabay ka sa cycle mas malaki pa return kesa sa bahay. Kung may capital ka na pambahay at bumili ka nung 2016 cycle may 3x bahay ka ngayon.