Disclaimer: I am in no way an expert on financial matters, but I wanna share what I have learned so far.
I started investing on real estate 5 years ago, when my parents and I decided to build 2 apartment units on a piece of land that my father bought more than 20 years ago. I consider myself lucky because we already own a lot to build units on.
Our vision was to have another steady source of income to aid us in our expenses in the future.
Tip #1: Ask your parents (or close relatives) if they have pieces of land (with clean titles) that you can invest on. Tell them your plan – what you’d like to build, how you’re gonna pay for the lot and construction, when you’d like the ownership to be transferred, etc. Present them with Plan A, B and C, and make sure that all details are clear. Negotiate and compromise to have a win-win situation for both parties. Remember that family still comes first.
At that time, I had just began working office-based (I worked home-based for 2 years), hence I couldn’t apply for any housing loan as that requires at least 36 months worth of contributions. Our game plan was to scrimp on daily expenses and use a portion of my and my father’s salary (plus use some of my younger brother’s scholarship money) to fund our first family project.
It wasn’t difficult at first because I was living with my parents and they did everything for me, including managing my salary, doing my laundry, preparing my food at home and at work and driving me to work. I didn’t have any vices (I still don’t have any) and I wasn’t in a relationship so there wasn’t anything I particularly spent money on a regular basis.
Also, aside from funding the project, I was paying for my father’s motorcycle, which was used for running errands, especially the location of the would-be apartments is one hour away from our house.
After a year, I decided to move out because I missed living on my own (I lived away from my family from 2007 until 2011). 2013 was tricky, as I had to pay for the motorcycle, fund the apartments, pay my own rent and buy my own food.
Tip #2: The best time to invest is when you’re single and living with your parents. You can save on money and effort plus you can focus on your job, giving you a higher chance of getting promoted faster.
On top of that, I got into a relationship and lived with my then-boyfriend to share living expenses. I still couldn’t make ends meet so I worked 3 to 4 part-time jobs to be able to catch up.
Tip #3: Having a full-time job is not enough if you want to invest, support your family, and live on your own, all at the same time. Find another source of income – sell things, offer services, and rent out equipment, etc.
I worked from 6am until 10pm (or 11pm) on weekdays and worked half-days on weekends. I lost a lot of sleep and too much hair, but 2 years after we started the project, we had the first unit rented out. Months later, we had the 2nd unit rented, as well.
Tip #4: Investing is a commitment. You can’t skip a month’s contribution to reward yourself and say you’ll just pay double next month when your pays goes up, because more often than not, you’ll get unexpected expenses that ruin your budget. Pay your dues on time, and stop depending on your next pay to cover for your impulse buys. There’s nothing wrong with giving yourself a reward for working hard, but if you do so at the expense of your investment, delay it. My rule of thumb is: if I can’t buy it in cash, then I won’t buy it.
(To be continued.)