Is Investing Your OFW Savings in Real Estate a Good Idea?
When Overseas Filipino Workers (OFWs) have saved a considerable amount for themselves or their family, it might be a good idea to start investing or finding ways to make your money generate income. After all, having a second source of income on top is always a good idea in case of emergencies or unexpected expenses.
One possibility is for OFWs to invest their savings in real estate and rent out their property to those looking for rental properties in the area. But is it a good idea for OFWs to invest all their savings in real estate? And how much should OFWs save before they can consider investing? Here’s what you need to know.
Build an Emergency Fund
It’s never a good idea to invest and leave yourself with nothing as this can be a big risk when you have to deal with unexpected expenses like medical emergencies. A good rule of thumb is that you should save enough to build an emergency fund before you can invest in property.
Financial experts recommend saving at least six months’ worth of your salary for your emergency fund. This can be a savings account you and your household will not touch unless absolutely necessary. Once you’ve got this fund settled and set aside, then you can start thinking about investing your remaining savings on real estate.
Thinking of the Future
Investing in real estate is a good idea for OFWs because of the long-term benefits it can have in the future. Unlike financial investments like stocks and bonds where the risks are high, real estate property is a tangible asset that property owners can maintain. Land is the only type of property asset that does not depreciate, after all, you’re looking at an income-generating property that can last you and your family decades.
As long as you’re careful about the house you’re investing in, you can even see the property value rise in the future because of a number of factors. For example, it’s difficult for those renting properties to find a place to stay within Metro Manila because of the high price tags and demand. But when infrastructure improves traffic to and from the metro, homes in neighboring provinces are expected to increase in demand and appreciate.
The Demand Is Always There
Another good reason to invest in property is that there will always be people looking for homes to rent. Whether it’s young families, couples, students, young professionals, or those looking for short-term rentals for a quick getaway, you’ll find plenty of opportunities in the Philippine real estate market to take when it comes to renting out your property.
As a property owner, this gives you a lot of options on how you want to lease out your property. For example, you can rent it out long-term to families and have a steady income for months to come. Or you can hop on the Airbnb and short-term trend and provide homestays for those looking for short-term leases.
OFWs need to think long-term and find ways to make their money work for them and investing in real estate property is just one of the opportunities to do so. Because of the advantages and perks of owning real estate, this is an investment opportunity that OFWs have to consider if they’re looking for additional ways to generate income.