Philippine Real Estate Boom

The property market in the Philippines is booming. Thanks to the money sent by our OFWs to their relatives, which in turn is being used to buy what every Filipino dreams of having, a place they can call their own. Because of this boom in the real estate market, developers are now attracting a lot of potential buyers from families of OFWs who suddenly find themselves with lots of cash to spend. Properties located in Metro Manila are expensive; especially in Makati, Quezon City and Manila are usually out of reach for most of us. The hottest city right now where property giants of our country are currently developing is the Bonifacio Global City located in Taguig. Located just a stone throw away from Makati. Taguig is steadily transforming itself into a modern cosmopolitan city with malls, condominiums and commercial establishments, but it also comes with a hefty price tag. Properties, which are located outside Metro Manila, do generate more interest because they are priced much lower compared to properties within the Metro, although transportation could
be a problem due to the distance. But the good news is that the LRT and MRT planned expansion projects will make travel more convenient and further integrating the cities outside Metro Manila.

The property boom is good for the country since it encourages people to spend. Also adding to the property boom is low interest rates offered by banks these days. They are trying to out do each other by offering the best deals with the lowest rates to attract more clients to loan from them. Consumers are now in the position to demand the best package available so its best to shop around to see which banks are offering their loan service that is best suited for our needs. With the current state of our economy where the GNP, peso exchange rate and the stock market are at it’s highest in years, if not record breaking is a clear indication that our country is headed the right way, unless politics side tracks it again.

Mall Real Estate

Nowadays it’s hard to start a business without opening your store in the malls. It is the place people go not only to unwind, watch a movie or just shop but even to pray as major malls have churches located inside them and even schools are starting to be located in the mall. In effect, malls are like self-contained mini cities with not much pollution, has a cool air-conditioned environment even if it’s blistering hot outside and its more secure, although not totally crime free, than some major cities in Metro Manila due to the number of security guards located in every entrance and exit point as well as policemen patrolling inside complete with bomb sniffing dogs. Wouldn’t it be wonderful if we could just live in the malls where everything we will ever need, from buying grocery to paying your utility bills is located right in your doorstep.

Major mall developers like SM, Robinsons and Ayala have lined up projects based on this concept. SM has already started such a project in their SM Sta. Mesa Mall where they are building a huge condominium located right across the street but will be linked via foot bridge so you don’t have to actually step outside the street to go to the mall. More impressive still is the plan to build condominiums around the SM Mall of Asia, which will also be linked to the mall transforming that area to a mini city that might as well have its own mayor and zip code. I hope I make enough money to buy a small pad there, as it would be a really nice place to live and raise a family.

Home|Business Rental Problems

If you are renting a place to live and planning some major home renovation to improve the house, think twice before putting your hard earned money into it. Some people who rent sink some major cash or even go as far as acquiring a personal loan, multipurpose loan or even a business loan to finance the renovation project should be aware of some unscrupulous practices some landlord will do to take advantage of you. This also applies to people who rent their business establishment. Don't undertake expensive major renovation without first securing a written and notarized contract from your landlord prohibiting sudden rent increase, extending your rent contract for a couple of more years and prohibiting the landlord to sell the place you are renting during the contract period. I have two cases to share with you what are the consequence of undertaking major renovations without first securing a new contract.

I have a businessman friend who rented a run down warehouse near the highway in Buendia, Makati City. He is into selling second hand vehicles, so he decided to open a showroom and secured a 3 month trail contract with the landlord. he obtained a loan from the bank and spent more than 500k renovating the warehouse into a nice showroom. The landlord noticed this and took advantage. During the second month of the rental, he decided to increase the price of the rent 3 folds upon the expiry of the original contract. The businessman was of course shocked about this but was unable to do anything because anything done to the place is to the sole benefit of the landlord and he is in no way obligated to pay the for the improvements. If we observe this situation carefully, the landlord knew he could rent his place at a higher amount to someone else due to the improvements. So he deliberately tripled the rent to get rid of the businessman so he is free to rent it to someone else. If the businessman bites to the three folds increase of rent, the unscrupulous landlord will be doubly happy. Either way its a win-win situation for him.

My businessman friend naturally refuses the new arrangement and has consulted a lawyer about his situation to see if there is some remedy to be done. Now he's depressed due to having taken out a loan from the bank and now he has to pay for legal consultation fees aside from the expenses of running his business and feeding his family. Renovations are necessary when moving into a new place but anything that requires some major cash investment should be thought of carefully by first securing a written guarantee so you will benefit from whatever improvements you spent in the property.

Buying Foreclosed Properties Via Auction

When looking for properties to buy whether for as an investment opportunity or for personal use, a great alternative to real estate developers, foreclosed bank properties or from private individuals is buying via auction. Auctioned properties are often cheaper than foreclosed properties offered by banks. But ironically, most property auctions being held are conducted by banks whose properties they were unable to dispose of.

Banks that are auctioning off their foreclosed properties are usually selling properties that they were unable to sell via normal means, which makes you think that the properties up for auction are not attractive to begin with. But there are diamonds in the rough. There a lots of reasons why the property was not able to be sold. Maybe the price being offered was too high before, or the place is located near a squatters area which is extremely not attractive to a prospective buyer but now SM is building a mall very near the property being auctioned, how can you go wrong buying a property very near SM city mall right?

But before you dive in and buy every cheap property for up auction. You must conduct and inspect the place you are planning to bid on, even if it is near Makati or other attractive cities to live in. After coming up with your list, visit the place and ask around the neighborhood about the history of the house, check and see if the property is near schools, hospitals, public roads, LRT or MRT stations which makes is a great buy. If you don't conduct visitations, you might end up buying a property near a cemetery, one way roads or near slums and end up being neighbors with holdupers, drug dealers or carjackers.

Once you found the right property for you you are ready to bid. Most auction houses require you to bring a show money in the form of cash or cashiers check. And after winning the bid. They often offer very flexible terms on the financing of up to 25 years in most cases involving property auctions conducted by banks. Pag-ibig also has an extensive list of properties for auction and now they have lowered their loan rates makes it even more attractive to consider them in you list of finding cheap properties for auction.

Rent To Own Home Loan

It is no secret that it is every Pinoys dream to own a place that they could call their own. But with the high price of owning a home, loan rates and relatively low wages, a combination that almost ensure that the average Pinoy will be renting for the rest of their lives. But there is a new concept called rent to own home loan.

Paying your rent for 25 years will never make that house yours. Availing of a rent to own home loan scheme usually involves paying a slightly higher monthly rental than what you are used to paying, the difference is what the owner offering the loan will earn and may not even require you to place a downpayment and the term of the rent to own loan usually is for 15 years. And since you are not getting a loan from a bank or a financial institution, the person offering the loan will usually not require you to pay different loan fees, appraisal fees, different kinds of insurance and they do not care about you credit rating, your ITR or even if you are on the CMAP list. As long as you can pay your monthly amortization and don't default on you payment you are ready to move in. But if you happen to default on you payment, which is normally 3 consecutive months of not paying, depending on the contract you have entered with the owner, you monthly payments will be forfeited as rent fees and will not be returned back to you. This is why rent to own loan lenders are not very strict in their credit investigations and backgrounds checks.

Homes that are usually used in the rent to own loan are condominiums, apartments and townhouses. But condominiums are the most common units being offered up for loan. Some condo developers are now following the trend of rent to own via their In-house financing. Home loan rates right now are very attractive, and if you are a Pag-ibig fund member you can avail of their rent to own home loan scheme offering attractive terms and rates.

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