With a huge amount of money involved, you need to make a smart decision.
Now that you finally have enough money saved to try your hand at a relatively big investment, your dilemma is valid. And with all the external factors affecting your decisions, it’s not a surprise that you’ve found yourself at the fork in your crossroad. The question is, where do your priorities and financial realities lie? With a car or with real estate?
Some people will make a good case for getting a car; it’s more affordable, simpler to maintain, and easily accessible after all. Having a car gives you a sense of independence and excitement as well—knowing you can get to wherever you want to be, without relying on anything but your sense of adventure.
But with today’s market, rising gas prices, and worsening traffic conditions, is a car really the more practical choice? Here are reasons why opting for a house could be a more sensible first investment:
A car’s value depreciates
As an article on Forbes notes, “an automobile is a depreciating asset. As it ages, it loses value rapidly and drastically. There is very little chance of an automobile used for personal transportation will appreciate in value.” So unless you’re buying a limited edition or capable of turning your car into a vintage work of art, there’s no chance anyone would pay you more than your initial investment.
Property in the right location can improve your work-life balance
According to a study released in 2017, the average Filipino spends 66 minutes a day (or 16 days a year) in traffic, and an additional 24 minutes every day looking for parking. If you opt to invest in property near where you work, that amount of time could instead be spent at home reading a book, cooking a healthy meal, or bonding with a family member instead of out in traffic with your eyes glued to your phone.
You can turn it in to a passive source of income
While ridesharing apps also allow new car owners to earn from their purchase, the industry has been at the center of controversy since the concept arrived in the country. Luckily, property rentals seem to be a more lucrative source of income for many, with one Pinay even sharing that she earns an average of P40,000 a month for short-term leases thanks to a condo unit she invested in.
Depending on the location, property can eventually have a higher resale value
If you research rigorously enough, not just on the developer but the surrounding areas as well as infrastructure plans, then you can choose a location that’ll help you make a profit in the future. Other factors to consider are nearby highways, convenience (it’s no secret townships are making waves in the real estate scene), fault lines, parking, and the conditions of nearby developments.
Whether you choose a car or property for your first investment, the most important part is knowing how to maximize your opportunities and being financially responsible enough to follow through with proper maintenance. At the end of the day, an investment you don’t know how to take care of isn’t a risk worth taking.
This article was originally published on realliving.com.ph/life/money-matters. Minors edits have been made.