🏡 𝗥𝗘𝗔𝗟 𝗘𝗦𝗧𝗔𝗧𝗘 𝗜𝗡𝗩𝗘𝗦𝗧𝗜𝗡𝗚 𝟭𝟬𝟭 (The Ultimate Guide for Total Beginners) Philippines 2024 #PHIRST

Should you buy property inside or outside Metro Manila What are the current real estate trends three years after the pandemic How does leverage work and how can you actually use it to your advantage Is it really always better to pay upfront with a cash payment Or maybe it'll better later if you just go ahead and apply for a home loan now What are the different types of real estate investing How do we actually know which strategy works best for you Many of you are asking me how to invest in real estate and where the best places to invest are Likely you've also noticed that over time real estate properties grow more beloved So you might be thinking that you have fewer financial responsibilities now and also you have disposable income at this time So you might as well invest your money in something that increases in value over time So my goal for you right now is to simplify everything you need to know about real estate investing in just a few minutes I can't delay any longer Let's get started For those of you seeing me for the first time hello I'm Romina I create vlogs about real estate in the Philippines focusing especially on the frequently asked questions from first-time home buyers Real estate refers to real property which differs from personal property in that real property encompasses the land itself along with anything permanently attached to it Personal property on the other hand refers to movable items that you own—appliances furniture jewelry artwork The main difference between the two is that when we talk about real properties You need a title as proof of ownership in order to legally sell lease or use the land So okay then Real estate refers to real property Investing in a nutshell means putting your money into an asset with the hope of earning a profit over time Combining the two concepts real estate investing is the act of purchasing properties with the intention of generating income down the line either through monthly rentals or long-term capital appreciation Why should you invest in real estate and why real estate specifically How does it differ from other types of assets The first reason is that real estate is tangible You can rely on him see him use him even make him your home They're buildings houses structures or even just land—once you own it you can use it however you like and it's always within your reach In other words real estate properties are tangible physical assets Unlike their more famous counterparts investments such as stocks You can claim to be a partial owner of that company and you may present a digital or paper certificate as proof of your shares That's about it—unlike real estate where you truly enjoy the physical presence of the asset itself The second reason is that you have greater control in real estate —you can decide the design of your unit the paint color and more If you're the one raising rents you'll be the next to face the price How much do you want to charge him how much do you want to sell for You can decide all that And this is one of the biggest advantages in real estate Because you have more control with this type of investment You have far more opportunities today to earn money She's the one who's linear only one way to grow Now you can be creative with your strategies It's hard to be creative about something you don't control The third reason is that real estate is more predictable and less volatile Compared to other types of investments like stocks crypto or forex real estate is less risky The value keeps fluctuating constantly—just like that the market's direction shifts completely In real estate investing since you can see it you can see where the development is headed We truly see that the population continues to grow steadily It's so easy to see where good investments lie and why And this is why historically speaking Real estate is truly one of the most stable types of investments ever to exist Number four capital appreciation as a hedge against inflation Twenty years ago were already in BGC But back then there weren't many buildings in the area and there was hardly any development yet So picture the price back then in 2004 compared to the current price in BGC in 2024 Another example: 15 years ago the Mall of Asia hadn't even opened yet So MOA was brand new I recall my mom was selling properties in that area around 2009 to 2010 You can buy a residential property there for as little as 2 million or even lower than 2M And now how much are properties in that area worth You’d barely get a parking space for that price in that area Time and again experts are advising us to invest in areas with strong potential to become economic powerhouses And the best time to invest is precisely when there are still no actual developments Because the moment you start seeing what was promised The malls the skyscrapers the infrastructure the airports the highways—too late by then Foolish prices were already way too high by that time That's why we say real estate is predictable because unless something unexpected happens—like a pandemic for example— Real estate almost always increases in value In fact even during the pandemic developers continued to raise prices without pause People are still buying properties The demand for residential properties remains high That's just how real estate works It's simply a matter of whether it's a gano'n kabiles or gano'n kabagal increase in value depending on location but the value is definitely rising She was already in the car before you'd even finished pulling it out of the garage The value drops immediately depreciating right away Okay to help you appreciate it even more Let's say you buy a property today worth one million pesos Let's keep it simple—just one million pesos The standard down payment is 15% over three years That's P150 000 After three years your property has appreciated to P1 000 from its original value Three million pesos right now So you're already making a profit of two million pesos But what you're pulling out is just the down payment The cash you've taken so far is only 150 000 pesos Just imagine your property's value increasing by 200% over the past three years But your salary likely didn’t see such a significant increase over such a brief period If you simply leave your money sitting in a traditional savings account that offers interest of only about 0.10% to 1% per year Your money is actually losing value The average interest rate in the Philippines over the past three years has been around 4.5% per year When inflation occurs the purchasing power of money decreases In other words the value of money goes down Did you notice the difference guys When your money just sits idle in a regular savings account doing nothing Your money is actually losing its value Now returning to our earlier example Your property appreciated from one million pesos to three million pesos in just three years Your property's annualized ROI is 44.22% This is why real estate makes such a strong hedge against inflation Since real estate tends to increase in value over time it shields us from the eroding power of money caused by inflation Number 5 the power of leverage If you've watched my vlog earlier about how to get approved by a bank I've mentioned that banks generally find it difficult to approve loans for investors or investment purposes particularly for paper assets since they're not fixed or stable You don't have control over the market's direction But that's a whole different matter when we talk about housing loans Did you know guys that a housing loan is one of the most affordable types of loans here in the Philippines Compared to other types of loans guys here the bank's collateral is a real estate property whose value increases over time When we talk about leverage guys you're using other people's money You're using other people's resources In this case it's the bank To maximize your income potential leverage essentially means borrowing money to use as capital for your business investments or assets— anything that will generate income down the line Few people recognize this truth in their minds—that all forms of debt are bad—but that’s completely false Not all debts are bad debts But you'll find it much easier to appreciate For instance suppose someone wants to buy a property worth ₱3 000 And you can already pay him in cash You already have ₱3 000 it's already secured The thing is if you're purchasing it for home ownership—meaning for personal use—then it's likely fine to pay in cash due to the discounts By the way in the industry we also refer to what's called "house poor " you know When they say "house poor " it means you own a home yet you're still struggling financially All your money has already gone to the house So as long as you're not house poor it's fine to go cash Anyway getting back to our property If you 're purchasing it for investment purposes not for personal use but with the intention of earning profits down the line Sometimes paying the full amount in cash isn't the most sensible choice Let's say instead of paying the full ₱3 000 000 in one lump sum you chose to take out a home loan instead Standard payment terms include a down payment and then we'll apply for the balance through the bank Don't worry I'll make it super super super simple It'll be easy for us to grasp the concept So let's imagine you've already been approved by the bank And your monthly amortization is around 30 000 pesos And then your unit you can rent it out for ₱15 000 a month So covered that half of your monthly payment to my bank But wait we're not done yet Since you didn't make a cash payment or you haven't immediately tied up your money in an investment you're liquid In financial terms when we say liquid It means that whenever you need hard money you'll have cash on hand without having to dip into your emergency fund So let's talk about opportunity cost Instead of immediately locking your money into a single investment you can put it to work elsewhere and make the most of your funds It will also return profits to you In other words you can put your excess money to good use right now If you had put him in a business or asset that could generate about 35 000 pesos a month So you'receiving ₱15 000 in rental income And then you have another 35 000 coming from your other investments as well That's a total of 50 000 Even if we reduce your monthly amortization to the bank down to ₱30 000 You could also make a profit of up to ₱ 20 000 Not to mention your property itself The value has been rising all this time while you're building your family So this is leverage in action You're controlling a property worth millions of pesos Your initial investment is really just a small part of the total You're only paying a down payment The advantage of leverage is Since you're liquid your money isn't tied up in one thing So if other opportunities suddenly arise along the way unwari you've found another property that's an absolutely incredible deal you just can't let it go or other business opportunities you know come only once in a lifetime you won't regret not seizing it No you can go for that opportunity because after all liquid cash We also have additional emergency funds Aside from that the other major advantage of leverage is You can lock in current prices on properties while they're still low Imagine I have a house I'd like to buy I just need an additional ₱1 000 and I' ll be able to pay for the property in full I could pay him in cash but instead of using bank financing to leverage I've decided to just hold off on joining for now There is a salary increase but I'll only commit once I'm certain about the shortfall The case is five years later when I return to the developer one of two things will happen A The unit I wanted has already been sold which is the most likely scenario: he's already been bought by someone else or B the price for the unit I wanted has already gone up That's not the amount I've managed to save anymore That's why we always tell you guys to invest as early as you can Because of the power of leverage You can lock in current prices for real estate properties And so if prices increase in the future you won’t be affected Rather if prices rise in the future that profit is already yours since the property's value has already appreciated wherein you get him at a lower price Advantage number six supply and demand Think of it this way When does the price of a product go up When demand is high and supply is low Remember that guys How much did a box of face masks cost at the height of the pandemic Really starting out from January to April 2020 If you can recall a box of face masks used to cost around 500 to 1 000 pesos— such was the price back then And believe it or not despite the price there are still people who buy it Why Because there' s demand and supply is limited That's how it was here in real estate When I started my career in this industry our population in the Philippines was around 107 million Now folks we' ve reached 119 million Every year about 1.5 million Filipinos are added to our population This is why people continually appreciate the value of real estate as demand for residential and commercial spaces remains consistently strong while our supply remains limited By the way it's fixed and finite Land is a very limited resource Number seven is I said potential didn't I Just to set your expectations Initially you'll be paying monthly to the bank So all your rental income right now goes straight toward your monthly amortization And then eventually once you've fully paid off the bank All of your rental income right now is yours It's passive income for now Number eight is also if you do it right If the location you chose is beautiful if there's a bridge nearby that you've built or if there's an airport nearby You're close to the new CBD for sure and once you finish paying your monthly installment to the bank Your price has already dropped significantly by then So if you want to sell it in the future that’s fine At least Raise the value of your property first before you liquidate Number nine: the best thing about real estate investing—or investing in general—is at it helps you develop qualities and skills not overly taught to us growing up So things like Real estate investing gives you the chance to learn all those things and more It's not just an opportunity to make money So many advantages in real estate but how do you know where to start There are four key factors you need to understand before we begin First of all what's your purpose or goal Why do you want to buy a property Are you purchasing it for personal use or are you purchasing for investment purposes When you say both you're most likely buying for the latter reason for investment purposes If you're not in a rush to move in right away but you do want to buy a property now while you can still afford the monthly payments So if that's your situation a bare lot or just the land alone would be fine with you since you're only interested in something that'll increase in value So I'd recommend choosing a great location to ensure the value truly increases Also since it's just land All you need to do is keep it minimal There 's no structure yet no house to maintain You don't need much of a foundation either And then when the time comes that you want to use it in the future just build a house on it Sure That's just one option Later we'll discuss what other different strategies there are in real estate investing But before that You need to be clear about your purpose from the start Why do you want to buy a property Because that's where we begin The second consideration of course is location Should you buy inside or outside Metro Manila Again it really comes down to your goal If for personal use or long-term rental then you might consider purchasing property within Metro Manila so you're close to everything —train stations offices universities and malls And you won’t have trouble finding tenants for the property since there’s already an existing market for them But on the other hand you need to consider this as well In Metro Manila there's not much land available for house and lot which is why the majority of properties being offered today within NCR are condominiums And before the pandemic people were content with confined spaces Just step down and there's the mall a short walk and the LRT is right there And right now guys there's a new group of people emerging post-pandemic The real game changer here honestly was Zoom and online meetings When remote work became widespread there were many people—families and young professionals—who migrated outside Metro Manila And now They realized that living outside Metro Manila isn't so bad after all They discovered it wasn't just another provincial town after all They saw how the roads had developed with so many malls and universities already located outside Manila So what happened was Once things returned to normal and vaccines became available many people were reluctant to go back to living within Metro Manila Like us for example I was born and raised in Makati but now we're here in Laguna That's what I wanted to share In addition to the existing market within Metro Manila he hasn't disappeared —he's still right there and we've simply gained another segment of people which also opened up many more opportunities for us in real estate investing if your goal is capital gains then buy properties outside Metro Manila The potential is significant with value expected to rise due to future developments For instance we have a project in Cavite located right in the heart of the area At the two Calax exits which is what's currently being done next Governor's Drive exit and then Open Canal exit Imagine the price increase by the time those two are done So choose a location whose value you know will rise within the next five to ten years perhaps due to the construction of a new airport the development of a subway system or an extension of the LRT or may be turned into a large community by the developer Another factor to consider before investing is your own financial capacity Of course you need to be realistic with your budget How are your personal finances Do you have an emergency fund set aside What are your long-term goals Are you considering applying for a mortgage If yes can you do it alone Or do you still need partners or co-buyers You should already have an idea about whether you qualify Whether or not you get bank financing If you need a guide on how to pass bank approval I made a mini-series discussing housing loans which I will be putting the links below The last factor to consider before deciding to invest is the developer themselves Recently there have been countless developers to choose from So how do you know or how do you decide where to invest Number one is how big is the developer This is not me saying Don't buy from small players okay But then again as a buyer you're the one who ends up paying So there's always a risk on your part if the development doesn't go through since there's an issue with the land they're selling or bigla silang filed for bankruptcy So ask yourself how established is this developer in the industry How many successful projects do they actually have Meaning to say the entire project is finished and the unit has already been turned over to the buyers Do they also develop communities with malls and access roads Or do they just build houses to sell So as I always say choosing the right developer Choosing the right neighborhood is just as important as selecting the property 's location because you're not only paying for the house itself but also for your peace of mind and the community's long-term potential Grow big in the future Actually there are many strategies here in real estate There's commercial spaces crowdfunding memorials and REITs and then there are those with tax benefits But for the purpose of this video I am only going to talk about residential real estate And for me the top 3 most common investment strategies in Philippine residential real estate First is buy and lease Basically you buy a property with the goal of renting it out Long-term rentals are possible meaning you have a permanent tenant for at least one year or short-term rentals are also an option such as Airbnb-style Either way the main goal in acquiring that property is the cash flow itself—capital gains are just a bonus For this strategy you have the option of doing it yourself andling the entire rental operation yourself or you can also hire a property manager to take care of the documentation rent collection and property maintenance and in most cases it's your responsibility to find tenants for your unit The second option is what we call land banking more commonly known as Buy and hold You purchase a property typically during the pre- selling stage and then aim to hold onto it for as long as possible until its value significantly appreciates It's extremely high and then you sell it later So this is actually a long-term strategy because you have to wait until construction begins or development takes place In that area demand was extremely high So we actually did it We bought a piece of land in Villiers City ear Evilla Mall and to this day we haven't moved him The good thing about this property is that it's just land We don't need excessive maintenance And since it's also inside a gated community we know the property we bought is secure even if we don't always keep an eye on him Aside from that since development in Villiers City is ongoing which by the way If you haven't heard yet he' s one of Cavite 's future CBDs and Villiers City is 15 times larger than BGC So the locatio The property we bought is highly strategic we can simply hold onto it and each year its value continues to rise Due to Villiers City if we don't use it personally we can simply resell it in five to ten years' time The last strategy I'm going to share with you the buy build and sell or buy fix and sell strategy Some people call this flipping The idea is you buy a distressed property Fix it then sell it afterwards So because of the renovations you now have the justifications to sell it at a higher price By the way this strategy isn't for beginners I have a friend who does exactly this In just one year He always has three to four properties to flip And he says yes the profits here are definitely big f you do it right If you exceed the budget and liquidate him immediately But compared to the two strategies As I mentioned earlier that’s the most exhausting part The reason is first of all it’s incredibly time-consuming Second Construction can be incredibly stressful especially when you're working under a tight timeline and strict budget and you don't have a team or reliable contacts to help you through the process And that's just the construction part There's still the legal aspect to consider So you'll also need someone skilled like a knowledgeable broker Also for comparison Buying fixing and selling is much faster than buying building and selling For instance when you purchase a lot Once you decide to build a house renovating is much faster than starting from scratch So these are the top three investment strategies in Philippine Residential Real Estate Every investment vehicle comes with its own advantages and disadvantages so I want to set your expectations—there truly isn't a perfect investment in reality So I hope you still do your own research and stay wise when making decisions But since you've watched until the end I'll share three key limitations real estate compared to other assets The number one limitation is that unlike stocks and bonds real estate is not very liquid if you want to convert your property into cash That same day there was already a buyer the money was already there and the property was immediately transferred into the buyer's name No it would take some time to liquidate such a hard asset Second limitation in real estate you need a bigger capital and upfront cost not just the reservation fee but also the down payment as well Discounts and promotional payment terms may be available from the developer but ultimately real estate is still real estate Properties cost millions of pesos in the Philippines He's similar to stocks if you have between 10 to 20 thousand technically you could already get in You can start investing now With real estate you really need to be financially prepared That's why I mentioned earlier the importance of savings and an emergency fund Third is when leasing your property of course there are certain things you need to prepare and you'll be the one covering those costs so things like maintenance and upkeep There may be additional costs on your part Aside from that there are also other charges involved in real estate such as property taxes and HOA fees I've already made a vlog about this so if you haven't watched it yet the link is in the NASA description box and also right there in the upper right corner of the frame I hope I was able to answer some of your most basic real estate questions and if you'd like to inquire I have many properties available throughout the Philippines I have lots house and lot townhouse condominiums you name it—just message me on Facebook Viber or WhatsApp so I can assist you properly Before we schedule the site visit Also if you liked this video please remember to like and subscribe because our next video is all about real estate documents So documentation 101 Once again this is Romina and thank you for watching Bye