With some market uncertainties, it is important that a buyer is sure enough to plunge into the condo investment, even if it is buying a cheap condo. Jumping into the unknown is risky and no one would like to do that. Condo buying can be both lucrative and losing. For the buyer himself, there are some signs that would give him an idea if he is ready to buy a condo or not. Here are the five signs.

1. You Practice Sound Money Management

Owning condominiums also means that new expenses are coming. It is important that the buyer is ready for such. Good money management is something that he already possesses. This means he already has some saved money and part of it is budgeted for condo buying. In that case, it would not be difficult for him to look for financing with regard to a down payment fee. The budget is already there and he knows how to use it. Good money management means knowing where the influx of money comes from, where it goes out and how exactly one can afford to spend for the condo.

2. You Have Good Source of Income

Buying a home is not a short-term financial commitment, but a long one. The buyer needs a consistent, stable and reliable cash flow from which monthly payments for the condo can come from. If you are the buyer, and plan to study again, build a family and do not have a stable job, it is better to set the priorities first. If you want to buy a condo without enough funds on hand to pay the whole amount in cash, you can avail financing. However, the risk of foreclosing the property is present when you miss out payments. That can be emotionally and financially painful.

3. You Have an Emergency Fund

It would also be ideal to have an emergency fund. This is the type of savings that are placed in short-term institutions, such as banks, for safekeeping. The emergency fund is ideally equal to six months of your gross income. Having more than enough emergency fund available qualifies you to buy condominium. The emergency fund can buffer the interim expenses for condo ownership in case something happens that disrupt the monthly income such as illness, layoffs or natural disaster. With the emergency fund, you can still pay your obligation up to six months while trying to find ways to bring back the steady income.

4. Your Debts Are Under Control

It is a perfect scenario if you, as a prospective condo buyer, do not have current debts. However, if you have, then your debts should be well-managed. Sure enough, lenders are business people, too. They want to make sure you can afford to pay your debt promptly. Lenders check your credit rating and status. The overall spending for a condo unit which includes amortization, insurance, taxes and interests should comprise not over 30% of your gross income. When you still have more current debts such as credit cards, personal loans, auto loans and others, it is better to pay them off first so you would not be overwhelmed by financial obligations. By paying your major debts first, buying a condo and getting some financing shall be easy as you would appear to have a good credit rating to the lenders who will do background financial check on you. Also, ask the help of your trusted real estate agent on how to avail mortgage, pass the credit and background check and how to buy investment property.

5. You Are Capable of Long-Term Financial Commitment

When buying a condominium unit, make sure you are ready to maintain your financial stability for three to five years or even longer. If you think you cannot hold financial commitment that long, you might not consider buying a condo yet as you are not ready for the moment.

Owning a condo also has some other expenses that come along with it. Condo maintenance costs are already yours. You are responsible to take care of its repairs and maintenance of your own unit. You also should pay the homeowners’ association dues as you are part of it. These regularly need money and it is something you should always have to address these expenses.

At the end of the day, your condominium unit should be an investment not a total liability. So, take your time to evaluate yourself if you are ready for such commitment.