Real Estate: Should I or Shouldn't I?

     I've read a lot of books about real estate. I'm thinking, how does one apply it to himself? I realize there are different levels of getting into real estate. Let's check if any of it can work for us.

1) They say real estate can give me passive income.

     What is passive income? Passive income means I earn without actively participating or working for it. In application, if I have bed space, room for rent, an apartment, a condominium unit, or even a lot for lease that is passive income in real estate. I earn from the monthly rent as I do my work, profession, or business. If I am studying for my post-graduate degree it would work the same way.

2) They say real estate properties increase in value over time.

     How? As time goes by, development happens in our neighborhood. Some are initiated by the government like concreting, widening of roads, construction of bridges, flyovers, skyway, street lighting and beautification of parks, the building of public schools, hospitals, etc. Others are initiated by the business sectors such as commercial business districts, malls, banks, restaurants, and the like. These increase the value of our real estate properties because of the accessibility of our very own house to these services and workplaces.

3) Someone once said the best time to buy real estate is yesterday.

     What did he mean? Like what I just said, the value of real estate increases because there is continuous development every day. Even in buying a pre-selling condominium unit or a lot/house and lot in a developing subdivision has the same concept. Imagine that in pre-selling, it starts from the ground. From nothing then development comes in like earthmoving, building the foundation, up to the construction of the whole condominium or the subdivision.

4) Can I afford Real Estate?

     At this point, I will apply what I learned from a financial organization that I was once affiliated with. I was taught that INCOME-SAVINGS=EXPENSE is the formula for WEALTH. Not the other way around INCOME-EXPENSE=SAVINGS.

     They even placed value to it:  INCOME (100%)-SAVINGS (30%)=EXPENSES (70%).

     We can apply our own figures here and you can find out if you can afford real estate. Looking at this, you can integrate the formula I gave you in my previous blog. Here it goes, to know if you qualify to avail of a real estate loan (housing, condominium, a lot) your monthly income should be 3.5x the monthly payments (amortization).

     Now, all of us have different income levels, don't worry. Real estate has different products for all income segment but the principles of real estate are still the same. :)

     If, after checking your finances you still find it challenging to get a real estate property don't worry. Here are a few tips:

1) You can get into business. Register your business so you can have the proper documentation the bank will need. Ideally, your business should be running for 2 to 3 years.
2) You can qualify with a joint income, (spouses, parent & child, siblings).
3) Maintain an active bank account.

     To help you decide, if you should or you shouldn't, talk to a Licensed Real Estate Broker. Do due diligence and ask for the complete name and check with the Professional Regulation Commission (PRC) online. DEAL ONLY WITH LICENSED REAL ESTATE BROKERS for your protection.

#resa9646
#prc
#bantaycolorumtaskforce

Photo Source: Pinterest onekindesign.com

Real Estate Ideas for Beginners

     Hello everyone! On my first day of blogging, I talked about the basics of real estate. Taken from what we have and where we are. The starting point is where we live. Possibilities are:
 
     1) We own it
     2) We are renting it.
     3) We are living with relatives.
     4) Others: Like it could be staff housing from our companies or for government employee housing, etc.

     Now, in what way can real estate work for us given these scenarios? Today is going to be like a workshop. Mind exercise. Together let us explore the basic idea of real estate.

     In the first scenario, we own the house we live in.

     1) It's great because we don't pay rent.
     2) If we own it and we are not paying rent, check if you can make a passive income from it. How? Is there space to develop and make a rental income out of it? A bed space/bedroom for rent? How about a space to convert to a dwelling space for lease? Maybe, commercial space for lease?
     3) If we are paying it in installment, it's fantastic because we are not paying rent and the monthly payments we do will not be wasted because later on the house and lot or condominium we live in will be ours once it is fully paid.
     
     It is also an investment because the value of the property increases over time.

     In the second scenario, we are renting it.
   
     1) This is challenging because a significant amount of our family income is dedicated to the monthly rent. How do we work around this if we are thinking of getting our own house? Remember in my blog yesterday, we need 3.5x of the monthly payment for our income in order to qualify for a housing loan. Someone in the family or maybe 2 from the family needs a big income. The family can also engage in business. I suggest if you haven't read my blog yesterday read it for ideas.

     In the third scenario, we are living with relatives.

     1) This gives us an opportunity to prepare for buying our own house. Provided, we are qualified to buy in cash or perhaps thru a loan. The key is savings and financial capacity (income).
     2) Another opportunity is to acquire a real estate property for passive income such as a condominium or a house and lot, or maybe even a lot only for investment which you can use for yourself in the future or sell later on. Remember the value of a real estate property increases over time.

     In the fourth scenario, we are living in staff housing from our companies or for government employee staff housing.

     1) This is similar to the third scenario. The only difference would be the income and the loan vehicles, for example, the military or government agencies have their own financial housing loan institutions.

     Ponder on these guys. Maybe you can come up with solutions and explore even more. My objective here is to make everyone more aware of real estate starting with what you guys already have and open more possibilities for you and the generations to come.

If you have questions, feel free to email me at clairecarlos.realestatebroker@gmail.com.

Photo Source: Pinterest Ailani Apartment Journal

Real Estate for the New Generation

     This one goes out to the youth. So, how are you guys doing? Are you the type that pretty much everything is well provided for or are you one of those in financially challenging situations right now in your lives? Well, I'm writing this for the kid I never had. Just for one moment let's pretend that you are my kid and I am your dad. Say, you are in your senior year in high school and I just want to give you a piece of my mind as a Licensed Real Estate Broker before you get ready for college. I'll tell you why as we go along.

     The question, for those in financially challenging situations right now, are you living in a rented home or do your parents own your house? What's the difference? Well, I just want you to have an idea of how things work with owning versus renting. You see, not most of us were exposed to this during our younger years. I was born in the '70s. The reason I'm writing about this now is to open the minds of your generation about having your own home. Eventually, you will settle down and have your own families, well most of you, unless you choose to devout your life as a religious. Well, anyway, here goes.

     Ask yourselves, what good will it do me if I have my own house for my own family? For others who would like to be young and independent, what good will it do me to have my own place? You may ask, why are you even talking about this? Let's write them down:

     1) If you get married, you and your wife/husband can live and raise your family the way you want it to be. No complications with in-laws. No pressure, no stress, and you will be able to have and preserve your healthy relationships with your in-laws (well, ideally).

     2) If you are single and you're the type who wants to be independent, you can learn, grow, and experience to start your own life.

     3) If you are single, but still opt to live with your parents, maybe you would want to get a passive income and investment. This is the road to financial independence.

     4) Would you prefer to rent for the rest of your life? When you rent, yes, you and your family have a place to stay but with the money, you pay for rent the house will never be yours. You will keep on paying as long as you stay there.

     These scenarios are facts of life. You can ask your elders to validate especially for number 1. You know kids, I often hear our elders say that they don't want their children to go through the same sufferings they've gone through. I feel the same way. I'm thinking that maybe things could change and your generation can have a better way of life given the proper information.

     

     What can be done? You have to start on the right foot. Just like a game, know the rules and how you'll win the game.

     For a start, know how to qualify in getting your own place. Income matters. Know the monthly payment for the place (house & lot, condominium, etc.) multiply it to 3.5. Example: Monthly Payment is P15,000, multiply it to 3.5=P45,000. To qualify you should be earning P45,000 gross monthly income. Gross meaning taxes included.

     What does this mean? What's the point? Well, remember our scenario? You are in senior high school, getting ready to go to college. Well, research. What job or business earns P45,000 monthly and you would enjoy doing?

      What's 3.5 by the way? Why multiply the monthly payment to 3.5? Most of the financial institutions like banks and even real estate developers find that income earner can afford to pay a loan if the monthly payment is around 1/3 of their monthly income.

     What's the point? House is a basic need of man. Before you develop a habit of spending on other things, make sure you can get yourself a house. That is the common mistake young people make. There are a great number of young people who have developed the habit of shopping, others going to clubs and bars, and some into traveling. Then a time comes in their lives when they realize they need a house, a place of their own but they can't afford it anymore. Some are already in debt and they find themselves unqualified to get a house. I really hope, your generation will make that change.

    If anybody reading this gets my point, shoot me an email.

   

               

Photo source: Pinterest decoratoo.com

Real Estate? Why Do I Care?

     Real Estate, a big word for most of us. Probably there are still a great number of people who are not aware of it and how it affects our lives. Funny, because most of us do not realize the very place we live in is actually real estate. More often than not, people don't realize the value of their abode. When I say value, I don't only mean the monetary value of it but more so the importance of it.
     In my case, I inherited a piece of property together with my siblings and us having no foresight or even the lack of know-how about how real estate works and what can be done with it back then is something I don't want to pass on to my nephews. Or maybe even to others. I think we all need to know that real estate doesn't only mean the pre-selling condominiums being offered to us or even lots and houses and lots being sold in the market.
     Think about it, we are being offered real estate properties far from the city or where we currently live in. Have we even realized that the real estate property being offered to us is less spacious than what we have?

Photo Source: Pinterest homemydesign.com