Advantages Of Real Estate Investment 101

2,337 views
2,107 views

Published on

Advantages of Real Estate Investment: Why is it BEST for YOU?

Find out how you can benefit from this BOOMING Industry in CEBU....

Published in: Economy & Finance, Business
0 Comments
4 Likes
Statistics
Notes
  • Be the first to comment

No Downloads
Views
Total views
2,337
On SlideShare
0
From Embeds
0
Number of Embeds
2
Actions
Shares
0
Downloads
130
Comments
0
Likes
4
Embeds 0
No embeds

No notes for slide

Advantages Of Real Estate Investment 101

  1. 1. REAL ESTATE 101
  2. 2. Why do in ESTATE? INVEST REAL
  3. 3. INTRODUCTION TO THE REAL ESTATE MARKET
  4. 4. Supply and Demand <ul><li>The Real Estate Asset Market (Property Market) </li></ul>Supply Investors Wanting to Sell Demand: Investors Wanting to Buy Market DEVELOPERS BUYERS
  5. 5. YOUR CLIENT Supply Property Owners (Landlords) Demand: Property Users (Tenants) Market <ul><li>The Space Market </li></ul>RENTAL MARKET Supply and Demand
  6. 6. What do people USUALLY invest in? <ul><li>LIFE INSURANCE </li></ul><ul><li>PENSION FUNDS </li></ul><ul><li>MUTUAL FUNDS </li></ul><ul><li>BANKS </li></ul><ul><li>- STOCK MARKETS </li></ul><ul><li>- TREASURY BONDS </li></ul>DIFFERENT CONSTITUENCIES, EXPERTISE, LIABILITIES, REGULATIONS, SIZES
  7. 7. TWO MAJOR INVESTMENT OBJECTIVES INCOME G R O W T H Relatively Long-term (Appreciation) Short-term (On-going need for Cash Inflow)
  8. 8. The ADVANTAGES of Real Estate Investment
  9. 9. RISK CONTROL = ADVANTAGES OF REAL ESTATE INVESTMENT
  10. 10. ADVANTAGES OF REAL ESTATE INVESTMENT <ul><li>CASH FLOW </li></ul><ul><li>= PASSIVE INCOME </li></ul>
  11. 11. ADVANTAGES OF REAL ESTATE INVESTMENT <ul><li>RENTAL YIELD is more than </li></ul><ul><li>BANK SAVINGS RATE </li></ul>MORE INCOME
  12. 12. Gross Rental Yields - Philippines Compared to Continent 10.99%
  13. 14. ADVANTAGES OF REAL ESTATE INVESTMENT <ul><li>LEVERAGE </li></ul><ul><li>(CAN BE USED AS COLLATERAL ) </li></ul>BANK
  14. 15. ADVANTAGES OF REAL ESTATE INVESTMENT HEDGE AGAINST INFLATION INFLATION
  15. 16. ADVANTAGES OF REAL ESTATE INVESTMENT <ul><li>INFLATION VS. </li></ul><ul><li>CAPITAL GAIN RATE </li></ul>
  16. 17. House Price Changes, 5 Yrs (%) - Philippines Compared to Continent
  17. 18. ADVANTAGES OF REAL ESTATE INVESTMENT <ul><li>FLEXIBILITY / </li></ul><ul><li>EXPANDABILITY </li></ul>
  18. 19. ADVANTAGES OF REAL ESTATE INVESTMENT <ul><li>DEPRECIATION </li></ul><ul><li>(HEDGE VS TAX) </li></ul>TAX
  19. 20. ADVANTAGES OF REAL ESTATE INVESTMENT <ul><li>POWER OF AMORTIZATION </li></ul>
  20. 21. ADVANTAGES OF REAL ESTATE INVESTMENT <ul><li>PREDICTABILITY/ </li></ul><ul><li>CONSERVATIVE </li></ul>
  21. 22. ADVANTAGES OF REAL ESTATE INVESTMENT <ul><li>LIFETIME </li></ul><ul><li>INVESTMENT </li></ul>NEW COUPLE YOUNG FAMILY MID-LIFE STATUS RETIREMENT SINGLE STATUS Different Lifestyles , Life Cycles , Personal Goals , Levels of Wealth LEGACY
  22. 24. HOW TO MAKE MONEY OUT OF YOUR REAL ESTATE INVESTMENT?
  23. 25. POWER OF CASH FLOW
  24. 26. With your investment… <ul><li>You have the Opportunity for </li></ul><ul><li>Passive Income </li></ul><ul><li>EXAMPLE: LA GUARDIA FLATS 1 </li></ul><ul><li>Monthly Passive Income = P12,000 / mo </li></ul>
  25. 27. With your investment… <ul><li>You have the Opportunity to Loan </li></ul><ul><li>More financing institutions grant loans when you have passive income </li></ul>
  26. 28. With your investment… <ul><li>You have the Opportunity to Invest </li></ul><ul><li>As you earn passive income, you have the opportunity to invest in another property, in effect, gives you more passive income in the future. </li></ul>
  27. 29. POWER OF MORTGAGE
  28. 30. With your investment… <ul><li>You have the Power to use your property as Collateral </li></ul><ul><li>Mortgage rate is relatively lower than rental yield </li></ul><ul><li>Even assuming that it is equal, lessor pays your debt or mortgage payable </li></ul><ul><li>In effect, more amount gets paid, and your equity increases. </li></ul>
  29. 31. POWER OF DEPRECIATION
  30. 32. With your investment… <ul><li>YOU HAVE THE OPPORTUNITY FOR TAX SHIELD </li></ul><ul><li>CAN BE DEDUCTED AS EXPENSE, THUS LESSEN TAXABLE INCOME </li></ul><ul><li>SPREAD OVER THE LIFE OF THE PROPERTY </li></ul><ul><li>IN MOST CASES, PROPERTY APPRAISES </li></ul>
  31. 33. POWER OF EQUITY
  32. 34. <ul><li>RESALE </li></ul><ul><li>30% / 70% RATIO </li></ul><ul><li>PROPERTY APPRAISES </li></ul><ul><li>FROM 1.35 TO 1.6, INCREASE OF 250T </li></ul><ul><li>AFTER 2 YRS (RFO), GROSS INCOME OF 60% OF INITIAL INVESTMENT FOR RESALE. </li></ul><ul><li>LOANABLE AMOUNT 1M, </li></ul><ul><li>MINIMAL TRANSFER FEE </li></ul><ul><li>FOR MORE GROSS INCOME, INVEST ON MORE PROPERTIES. </li></ul><ul><li>MAKE SURE THAT IT IS A WELL LOCATED PROPERTY </li></ul><ul><li>DEVELOPED BY A REPUTABLE DEVELOPER </li></ul><ul><li>IF PROPERTY IS NOT WELL ESTABLISHED, HARD TO SELL). </li></ul><ul><li>POWER OF EQUITY IS GOOD, BUT IT HAS TO BE A GOOD PROPERTY, WITH TRACK RECORD OF PROPERTY APPRECIATION EVEN MORE THAN INDUSTRY STANDARDS. </li></ul>POWER OF EQUITY

×