Have you ever had to choose between buying a car and a house first? Consider the following reasons why you should purchase a house rather than a car first.
After years of working a stable job (and perhaps even getting promoted once or twice) and diligently saving a portion of each paycheck, you’ve amassed enough money to invest in something significant—a true milestone that every millennial aspires to reach. For some, the obvious choice would be to purchase a home or a car. However, taking external factors into account, which is the more prudent course of action?
Some people will make a compelling case for purchasing a car; after all, it is more affordable, easier to maintain, and more convenient. Having a car provides a sense of independence and excitement, as well as the assurance that you can get wherever you want to go without relying on anything other than your own sense of adventure.
However, given today’s market conditions, rising gasoline prices, and deteriorating traffic conditions, is a car truly the more practical option? Consider the following reasons why purchasing a home may be a more prudent initial investment:
The value of a car depreciates over time
As Forbes notes in an article, “an automobile is a depreciating asset.” It rapidly depreciates in value as it ages. There is a slim chance that a car used for personal transportation will appreciate in value.”
Therefore, unless you purchase a limited edition or are capable of transforming your car into a vintage work of art, no one will pay you more than your initial investment.
The Advantages of Purchasing a House Before Purchasing a Car
Properly located property can help you maintain a healthy work-life balance
According to a 2017 study, the average Filipino spends 66 minutes a day (or 16 days a year) stuck in traffic and another 24 minutes looking for parking. Investing in real estate near your place of employment can maximize the time and can be spent at home reading a book, cooking a healthy meal, or bonding with a family member, rather than stuck in traffic with your eyes glued to your phone.
You can turn it into a source of passive income
While ridesharing apps enable new car owners to earn money from their purchase, the industry has been a source of contention in the country since the concept arrived.
Fortunately, property rentals appear to be a more lucrative source of income for many Filipinos, with one Pinay sharing that she earns an average of P40,000 per month from short-term leases due to an investment in a condo unit.
Depending on the location, a property’s resale value may eventually increase
If you conduct sufficient research, not only on the developer, but also on the surrounding area and future infrastructure plans, you can choose a location that will help you profit in the future.
Whether you choose a car or a piece of real estate as your first investment, the most critical aspect is understanding how to maximize your opportunities and being financially responsible enough to maintain it properly. Finally, an investment that you are unsure how to manage is not a risk worth taking.
Own your Dream Home in the Philippines at Camella
The Philippines leading housing brand, Camella Homes, offers the best locations in the country to start your dream home in themed communities. Presently, Camella Homes offers house and lot and condo for sale projects located in 47 cities and 168 municipalities in the country.
Check out your investment options in the Philippines today.
