REAL ESTATE 101
Why do  in ESTATE? INVEST REAL
INTRODUCTION  TO THE   REAL ESTATE MARKET
Supply and Demand <ul><li>The Real Estate Asset Market (Property Market) </li></ul>Supply Investors Wanting to Sell Demand...
YOUR CLIENT Supply Property Owners (Landlords) Demand: Property Users (Tenants) Market <ul><li>The Space Market </li></ul>...
What do people USUALLY invest in? <ul><li>LIFE INSURANCE </li></ul><ul><li>PENSION FUNDS </li></ul><ul><li>MUTUAL FUNDS </...
TWO MAJOR INVESTMENT  OBJECTIVES INCOME G R O W T H Relatively Long-term (Appreciation) Short-term (On-going need for Cash...
The ADVANTAGES of  Real Estate   Investment
RISK CONTROL =  ADVANTAGES OF REAL ESTATE INVESTMENT
ADVANTAGES OF REAL ESTATE INVESTMENT <ul><li>CASH FLOW   </li></ul><ul><li>=  PASSIVE INCOME </li></ul>
ADVANTAGES OF REAL ESTATE INVESTMENT <ul><li>RENTAL YIELD   is more than </li></ul><ul><li>BANK SAVINGS RATE </li></ul>MOR...
Gross Rental Yields - Philippines Compared to Continent 10.99%
 
ADVANTAGES OF REAL ESTATE INVESTMENT <ul><li>LEVERAGE </li></ul><ul><li>(CAN BE USED AS   COLLATERAL ) </li></ul>BANK
ADVANTAGES OF REAL ESTATE INVESTMENT HEDGE AGAINST INFLATION INFLATION
ADVANTAGES OF REAL ESTATE INVESTMENT <ul><li>INFLATION  VS. </li></ul><ul><li>CAPITAL GAIN RATE </li></ul>
House Price Changes, 5 Yrs (%) - Philippines Compared to Continent
ADVANTAGES OF REAL ESTATE INVESTMENT <ul><li>FLEXIBILITY / </li></ul><ul><li>EXPANDABILITY </li></ul>
ADVANTAGES OF REAL ESTATE INVESTMENT <ul><li>DEPRECIATION </li></ul><ul><li>(HEDGE VS TAX) </li></ul>TAX
ADVANTAGES OF REAL ESTATE INVESTMENT <ul><li>POWER OF  AMORTIZATION </li></ul>
ADVANTAGES OF REAL ESTATE INVESTMENT <ul><li>PREDICTABILITY/ </li></ul><ul><li>CONSERVATIVE </li></ul>
ADVANTAGES OF REAL ESTATE INVESTMENT <ul><li>LIFETIME </li></ul><ul><li>INVESTMENT </li></ul>NEW COUPLE YOUNG  FAMILY MID-...
 
HOW TO  MAKE MONEY   OUT OF YOUR  REAL ESTATE INVESTMENT?
POWER OF CASH FLOW
With your investment… <ul><li>You have the  Opportunity for  </li></ul><ul><li>Passive Income </li></ul><ul><li>EXAMPLE:  ...
With your investment… <ul><li>You have the  Opportunity to Loan </li></ul><ul><li>More financing institutions grant loans ...
With your investment… <ul><li>You have the  Opportunity to Invest </li></ul><ul><li>As you earn passive income, you have t...
POWER  OF MORTGAGE
With your investment… <ul><li>You have the  Power to use your property as Collateral </li></ul><ul><li>Mortgage rate is re...
POWER  OF  DEPRECIATION
With your investment… <ul><li>YOU HAVE THE  OPPORTUNITY FOR TAX SHIELD </li></ul><ul><li>CAN BE DEDUCTED AS EXPENSE, THUS ...
POWER  OF  EQUITY
<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,...
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Advantages Of Real Estate Investment 101

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

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

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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
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