Investing is one financial decision made by some people in the hope of earning money. There are many investment routes to take such as bonds, stocks, jewelry, and real estate. While it can be tempting to follow the footsteps of successful investors, it is of note that property investment is not for the fainthearted.
If you want to invest in property, say real estate in Baguio City, it makes sense to learn the ropes of real estate investments for amateurs to apply before taking the risks. It starts by weighing the pros and cons.
The Positive Side of Real Estate Investment
1. Capital Growth
Let’s say, for instance, that you have a house and lot in Baguio City. You bought it even if you don’t get to spend as much time in there as you would want. Still, it would pay dividends if you hold on to your property while its value increases. You could eventually rent it out to someone. Thus, aside from steady capital growth, you stand to enjoy regular monthly rental returns.
2. Safe Investment
Even if you happen to purchase the most unsightly house in the area or own a not-so-aesthetically-pleasing apartment in Baguio city, it will still increase its value over time. Real estate investment is not as saturated as other investment markets.
3. Moderate Risks
The property can be insured against almost any type of risks like fire, vacancy, or breach of contract.
4. Open to Everyone
This means real estate investments for newbies and the uninitiated is possible because it can be a venture even for individuals with no knowledge about it.
5. Individual Control
The investor can control and make decisions on whatever property investment is involved.
6. Tax Benefits
Your negatively geared property may provide you with tax benefits.
The Hitches in Investing in Real Estate
Unlike other assets, a house and lot in Baguio City can be tough to sell and takes longer to dispose when you need to liquidate it.
2. Involves Extra Costs
Apart from the initial investment costs involved in acquiring real estate, there are a number of hidden and ongoing costs to consider especially on a condominium for sale in Baguio City. This includes maintenance and repairs, land tax, utilities, homeowners association, insurance, etc. Other types of investments do not have such costs.
3. Income-less Periods
When no tenant is renting the property, you need to shoulder the mortgage repayments, which means you need to look for other financial sources.
4. Irresponsible Tenants
Bad tenants are a nightmare to owners, and this is especially true if you delegated real estate agents in Baguio City to handle the rental of your property. They can wreak damage to the property, lag behind payments, and even refuse to vacate the premises despite non-payment. Sometimes this can lead to costly and lengthy court settlement before resolution is handed down. By then, owners had enough stress and debts to handle to cover property expenses.
5. Other Costs
While negative gearing can merit tax deductions, real estate investment needs additional budget to cover shortfall between repayments and rental income, and to pay for the property when it is vacant.
Important Tips about Real Estate Investment for Newbies
Choose the Right Property. When hunting for real estate in Baguio City to invest on, look for one that has big potentials in terms of continuous demand by tenants or high promises for resale. Consider the appropriateness of the property being fitted to average age of residents around the area.
Research the Demographics of the Area. It is important to know the general demographic features of your target area and determine the needs so you can make the necessary adjustments to your property. For example, if you’re buying house and lot in Baguio City, make sure it has a properly working heating and ventilating system.
Forego Your Feelings. When investing on real estate, don’t make the crucial mistake of basing your decision on emotion, instead of finances and rationality. Do your research and establish your strategies to avoid a bad purchase that can result to big loss and capital growth that is not sufficient to cover basic expenses for maintaining the property. After all, real estate investments for dummies and non-experts also require detailed planning to ensure the right return for every penny’s worth.
Investments involve time, effort, and money — the reason planning is above all essential. And, to emphasize, this is not just the usual planning that we apply in our daily lives but “thorough or exhaustive planning”.
So before you buy an airline ticket or reserve a hotel for your visit in Baguio, make sure that you are a hundred percent satisfied of your pre-investment preparations. Here is a brief checklist you can refer that includes those steps that most beginning real estate investors overlook.
Actually, there are a lot more that you need to consider when creating your purchase plan. And, for beginners like you, we recommend that you ask help from one of the best real estate agents in Baguio City.
Do you want to start searching for that perfect property within the city? Check out these options:
Property investment has been a ticket to wealth for many Filipinos. For one thing, it is one of the most solid and stable assets to put your money in. For another, it can help you create a new source of income, and it has the potential for high capital gain. So, if you are looking to diversity your investment portfolio this year, consider property – particularly a real estate investment in Baguio City.
1. It is the summer capital of the Philippines
Sitting at an altitude of approximately 1,540 meters in the tropical pine forest eco-region of Luzon, the city enjoys a cool temperature anytime of the year. This makes it a favorite destination of locals, tourists and holidaymakers who want to escape the summer heat in Manila and other neighboring cities and provinces.
Many Baguio businesses, particularly those who are in the hotel and accommodation sector, earn their income mainly from tourism. Currently, there are over 80 hotels and inns catering to the growing number of tourists flocking to the city every year. Take advantage of this opportunity by owning a house and lot in Baguio city that you can conveniently use during your holiday and rent out when you are away.
2. Colleges and universities are expanding
Last 2010, the real estate market has started the shift towards the student market. Affordable packages for condominiums in Baguio city were made available, targeting students who are planning to migrate and work in the city after graduation. The shift was driven by growth and expansion of many of the city's colleges and universities, which between 2008 and 2009 recorded a total of 65,292 student admissions (in six major universities). That is without counting the 75,520 students who enrolled in grade school and high school in the same period and who eventually turned to college in the following years.
Today, the trend remains the same. Baguio's colleges and universities are continuously seeing a rise in student admission, offering residential property investors an opportunity to earn a stable and consistent income from rent.
3. The city offers numerous points of interest
Business aside, Baguio makes a great place to build a second home in. For one thing, the city is rich in history, culture, and natural attractions. There's always something for everyone here.
For the nature lovers, there's the Mount Santo Tomas, the highest peak in the entire Baguio. It offers visitors a panoramic view of the whole city and the La Union province. There's also the very accessible Tablay's Asin Hot Spring, where you can dip into their outdoor pool any time and enjoy complete relaxation.
Attractions abound too for the culture and history enthusiasts. The Easter Weaving Room, which was founded in 1909 and still in operation today, allows you to see master weavers in action – and even try your hand on weaving. Baguio-Mountain Province Museum will take you back in time with its wonderful and intriguing display of relics and artifacts from mountain provinces. Not to miss is the Ifugao Woodcarves Villages where you can feast your eyes on the many beautiful arts and crafts that are meticulously hand carved by some of the world's best carvers.
Whether you are planning to buy a family home or a rental property, real estate investment in the Philippines' summer capital is definitely worth it. So, call your trusted real estate agents/brokers in Baguio City now and get started!
How to Earn Millions in the Philippines’ Real Estate This 2015
Are you thinking about the best investment to make this 2015? Well, you surely have countless of options in the Philippines. However, one of the highly recommended is investing in the real estate sector. Why?
The most recent forecast reveals that restrictions on property ownership by foreigners in the country will be relaxed as ASEAN members are planning to form a unified, single market this year. In such case, the Philippines will gain more attention from international investors. So real properties are expected to be in-demand anywhere in the country and the potential to earn millions is indeed possible.
But before you actually start finding a property, make sure that you are aware of the ins and outs of this business. How can you actually get rich in the Philippines’ real estate market and become a millionaire, even a billionaire soon? Here are ways you’d be grateful you’ve come across now.
BUY LOW-PRICED, HIGH POTENTIAL PROPERTIES AND SELL THEM HIGH
This is how you can earn in real estate business. That is why you need to be very particular and wise in buying properties. It’s all about discovering or realizing their potential. You can choose to renovate the property and sell it for a higher price. Know that when pricing any real estate, a lot of aspects are considered, including location, neighborhood, and aesthetic appeal.
MAINTAIN A GOOD CREDIT BACKGROUND
Of course, when you are just starting, you may need to apply for a loan so you can take advantage of a few great opportunities in the real estate market. Now, if ever you do so, make sure that you pay on time and keep a good record so you’ll become one of the bank’s most trusted borrowers. And so the next time you make a loan, everything will go smooth.
CONSIDER NETWORKING A WAY OF LIFE
Connections is very important. The more people you know, the higher is the chance of selling a property in no time. So whenever you bump into someone, whether in a public transport or anywhere, always give your warmest smile and start a talk if possible. However, be very cautious about giving personal details. What you should do instead is to give your business or calling card. Who knows that person’s friend is searching for a property so you’ll be glad you did.
MAKE IT A SIDELINE CAREER
You really don’t need to quit from your current full-time job. In real estate business, you can earn millions even if it’s only a sideline career. You just have to keep on advertising the property in every opportunity and aim for a sale. Right now, social networking sites is a big help.
SPECIALIZE ONE TYPE OF PROPERTY
If you are a beginner investor, it is best to specialize one type of real estate business rather than all. For example, you’d like to consider a residential real estate investment in Baguio City, such as a house and lot or a condominium. Master this branch and then later on, you can choose to invest with the others, commercial, industrial, retail, and mixed-use.
There you have it, the five ways on how to get rich when joining the Philippines’ real estate sector. Overall, it’s all about research and strategy.
You fell in love with this house and lot in Baguio City, so much so that you want to go back there repeatedly when you’re on vacation. You promised yourself that if you make some money you’d buy a piece of property there. However, before you take that first step in buying a vacation home, consider these solid pieces of real estate investment advice consolidated from the wisdom of investment experts.
• Buy within your means. It’s easy to be tempted to buy your ideal vacation home when you spot it, making you oblivious to what you can really afford. If possible, talk to real estate agents/brokers in Baguio city to help you figure out how much to spend and how much loan to get. Lending institutions are becoming more stringent on their policies and requirements. Think if you can afford the 20 percent down payment (or however much it is), and the monthly outlay that can go to a maximum 36 percent of your income.
• Look at extra costs. After knowing how much you can afford, take a look at the other costs you need to spend for the house, such as taxes, insurance, utilities, and maintenance. If you don’t intend to stay there most of the time, you may have to hire a caretaker and spend for maintenance costs.
• Deal with real estate agents/brokers in Baguio city who are familiar with the area. Working with a real estate agent who knows every nook and cranny of the place is a great source of information you can’t find elsewhere.
• Choose a good location. You may want a place away from the rest of the world, so you want your vacation home hidden somewhere in the woods where modern technology cannot reach. However, your idea may not work well if you’re planning to rent out the property. Although vacationers want to stay in the area, they prefer to have everything accessible, such as the main road, parking area, convenience store, and strong cable or Internet signal. You need a house and lot in Baguio City that’s situated in a win-win location.
• It’s common knowledge that Baguio City weather is ideal especially during summertime. However, what is the condition during the rest of the year? When the rainy season comes, do the roads become impassable? How safe is a house during extreme weather conditions? Wouldn’t it be more prudent to look for a condo for sale in Baguio City instead of a house and lot? You need to know how the place fares all-year round to help you decide if you still want to spend or rent out a place that is picture-perfect during summertime, but a forlorn sight come rainy season.
• Consider the property as your second home, not an investment. In truth, it’s hardly possible to recover the investment placed on a vacation home. If you’re bent on buying one, choose a property with a house where you and your family can have a good relaxing time away from home. Otherwise, if budget doesn’t allow for a house and lot, there are plenty of condominiums in Baguio City, and a unit in one may be the more feasible option. It will be more than it’s worth if you spend precious moments to curve memories, and care for the house for continuous use by future generations. There’s simply no equivalent price for that.
Owning a vacation home can be a rewarding experience if you put much thought on it. Whatever your reasons are for wanting a vacation home, consider the real estate investment advice provided here before taking the plunge.