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Oct 7, 2017

Debunking Five of the Most Common Misconceptions about Real Estate Investing



Relatively fewer people invest in real estate compared to those who take part in the stock market. Among the common reasons are fears and uncertainties that cloud the judgment of potential investors.

What these investors do not know is that they are missing out on this promising market, given that real estate has a value that appreciates over time. Lamudi even noted that it is a safer investment that allows investors to be flexible with their assets.

Investors must, however, be informed and well-equipped to avoid unwarranted risks. Here are some of the common misconceptions about real estate investing and how these spur the wrong idea about the market.

You have to be rich.

Perhaps, this is the most common misconception you will hear from people who would discourage you from venturing in real estate. While it is true that investing would not be as easy if you do not have enough in your war chest, it doesn't necessarily mean that you should have a battalion should you decide to push through.

The key here is financial security. If you have an ample amount of disposable income, then you have the freedom to invest it to make it grow in value. To illustrate, consider this situation: You have the savings to pay for the down payment of a condominium unit in Mandaluyong. Being in a busy city, the unit will naturally appreciate as the demand for housing near business districts swells.

Now, you have two options: Either you choose the rent-to-own track, meaning you can occupy the unit yourself, or you rent out the said unit while you settle the loan in predetermined terms. This way, not only will you have possession of the property, you are also settling your dues with no hassle.

Another option, especially for those who are just starting, is to find a venture partner. This will not only help distribute the financial burden but will also widen opportunities, as two heads work better than one.

If you still think you have to start with a lot of money, just remember that investing can be done in baby steps.

It's easy as one-two-three. 

Let's say you have overcome the first hurdle in investing and are stable to acquire more properties. Should you just lay back, enjoy your drink, and expect yields to just roll in?

The answer is no. Real estate investing takes a lot of work. It requires a clear understanding of the concepts not just in investing but also in law and the economy, among others. As Forbes put it, real estate is not really complicated at its core, but this does not mean the job is simple.

You would not go to battle without having a strategy, and the same goes with investing in a market as particular as real estate. Knowledge of the current market situation of potential locations is vital. You should be able to determine the demand for spaces in the area, as well as your target clients. For example, if you have your eyes set on a residential area with not so much retail presence, then it would be wise to look for nearby properties where you can set up commercial spaces.

For others, hiring a financial advisor is necessary. However, even with an advisor, you should not take the job so lightly as you would still have to manage your accounts, attend to your tenants' needs and concerns, and maintain your network.

The priority is keeping your property occupied.


While this is partly true, it is still important to profile your tenants. As Eric Tyson and Ray Brown from Dummies.com point out, investors often overlook the importance of tenant selection.

The crucial thing here is making sure your property is marketed in such a way that it would attract those who are most qualified. Investors can achieve this by targeting their advertising to a specific market.

Likewise, the investor should have the knack of determining early on if the tenant would want to stay long-term. Of course, this is on top of other qualities an investor should look for. It is essential to determine if the tenant can help you settle the mortgage and build the value of the property.

In a nutshell, the journey to having your property always occupied does not end with having tenants who come and go. It is always better to encourage longer commitments from them.

Go big or go home.


Most investors believe that you have to go big to get ahead in the game. This is not the case, however, in real estate investing.

This is especially true if you are a nascent investor—you can always start investing in small properties. For instance, you can snag a property within a stone's throw away from the University Belt and turn it into a viable student accommodation. According to Lamudi, the built-in demand for these student spaces makes investing in this area a great start to your real estate portfolio. And with an already determined market year in and year out, student spaces have the potential for greater cash flow.

Take note, however, that gains in this market are not instant as it would take time for you to get that steady and good cash flow. But this should not discourage you from starting small. As stated earlier, baby steps will get you a long way.

All you need is luck.

Luck should always be welcomed with open arms when it comes your way. However, relying on it will get you nowhere if you are investing in real estate.
It pays to do your homework and research on current market trends, allowing yourself to be well-versed on how you can utilize a property's location or how you can acquire a property at a fair price.

As they say, before you invest your hard-earned wealth into something, invest in your own plethora of knowledge first. Many misconceptions are rooted in superstition and unproven claims. Instead of trusting luck with the direction of your investment goals, you should use your own judgment and analysis of things to pave your way to your desired outcome.


Real estate investing, like any other type of investing and financial planning, requires only two things from investors: financial security and the willingness to take risks. Investors who are gunning for high rewards must, therefore, expect the high risks that investing could entail. It is important that this concept is taken not as a caution but rather as a challenge for potential investors, young and old, to thrive in this exciting market.

ABOUT LAMUDI
LAMUDI is a leading global property portal focusing exclusively on emerging markets. It offers sellers, buyers, landlords and renters a secure and easy-to-use platform to find or list properties online. Lamudi was established in 2013 in Berlin, Germany and it is currently available in Latin America (Mexico, Colombia and Peru), Asia (Philippines, Bangladesh, Indonesia, Myanmar, Pakistan, Sri Lanka) and Middle East (Jordan, Qatar, Saudi Arabia, United Arab Emirates). Within fewer than three years, Lamudi has established its presence as a key online real estate marketplace in the countries where it is operating. 

Sep 3, 2017

How Bitcoin and coins.ph can make Filipinos and OFW life easier



I have wrote an article before about Bitcoin: The Future of Payments and gave basic ideas about Bitcoin. I haven't made any follow-up article about it after that and its been two years now. There wasn't also any major news about it until just this month when its price against US Dollar surge to 1 BTC* (Bitcoin) for USD5,000++. So, if someone bought 1 Bitcoin (BTC) on 2015, it have already grown 1500%** in value. That's a huge profit in two years!

It is indeed a revolutionary invention in our time but one of the questions I would like to answer in this article is "How Bitcoin can make Filipinos and OFW life easier". I will be giving four (4) best examples on how I have utilized the potential of bitcoin in my daily life and hopefully you can find value on it and somehow make you and your family's life easier.




Here are the four (4) best usage of Bitcoin for Filipinos and even OFWs that will make their life easier:

1. Buying Prepaid Load.


You don't need to go outside and look for the nearest store just to load your prepaid number. You just need to Register an account with coins.ph, download their Apps and Cash-In to load your account.

Not only that, You get 10% back on all your prepaid load purchases.


2. Pay Bills.

You can pay your Meralco, Telecom & Broadband Bill, Cable Subscription, Credit Card, Insurance, and for OFWs, you don't need to ask someone to pay for your Philhealth and SSS, you can now pay Philhealth Premium and SSS Contributions with your coins.ph Apps. All you need to do is Register an account with coins.phdownload coins.ph Apps




3. Hang Out and "Pay Peer-to-Peer"
Source: nypost.com

If you typically hang out on Friday with co-workers or friends and you end up always paying the bill or you unintentionally forgot to pay your share and your good friend reminded you about it, then here's a simple solution I can share which me and my friends have been doing everytime we hang out.

If you always pay for the bill, immediately divide the total expenses and let them know how much is their share and tell them to send PHP or BTC via your coins.ph digital wallet. It will be much easier if you will use your QR Code to minimize giving your wallet address or email/SMS/Facebook account.

How? Just click "RECEIVE" and "Scan QR Code"

If you find this article helpful, you can 
send a little donation to help support maintaining this site and be able to 
reach out and help more filipinos and helpspread financial literacy. 
You can donate by scanning the QR Code above. Thank you!

And if you will be paying your share, all you need to do is to request for the QR Code or wallet address and input the amount and "SLIDE TO PAY".

4.Virtual Debit Card
If you have difficulty applying for a Credit or Debit Card, it is now easy to purchase anything online with your Virtual Debit Card. You just need to Activate it and put "enough" funds in your card in order to complete a purchase online.

What are the advantages of using the Coins Virtual Card?
The Coins Virtual Card is a convenient way to make online purchases wherever Visa cards are accepted.  Our Virtual Card accounts link directly with your Coins.ph  wallet in order to provide the same convenient cash-in options.  Additionally, your funds on the Virtual Cards will be stored in US Dollars, enabling convenient international purchases as well as local online purchases in Philippine Pesos.

Where can I Use Coins Virtual Card?
You can use your Virtual Card wherever Visa cards are accepted online, including leading internet services like Amazon, Zalora, Uber, Grab Credits, and many more.

For more FAQs about your Coins Virtual Card, you can visit this link.


* BTC is the symbol used to represent Bitcoin
** - assuming purchase price was during all time high of 2015 and its current value as of writing is $5000 as of Sept 2,2017.

For those outside the Philippines, you can use COINBASE to buy bitcoin. 

Aug 4, 2017

Five Common Misconceptions about Insurance in the Philippines

Photo courtesy of Siala via Pixabay

Although life insurance is a crucial aspect of a healthy personal finance, only 2% of Filipinos have life insurance. This is mostly because of the insurance misconceptions that are rife in the Philippine society. The lack of awareness of the benefits and importance of insurance is why many have failed to take action. The following are some of the misconceptions that keep people from getting an insurance.

That you don’t need it

Yes, you need it, especially if you have people depending on you. One of the main purposes of life insurance is income continuation. This means that should you meet an untimely death, your dependents can continue having the same quality of life at least long enough for them to gain their footing and become financially independent themselves. You see it all too often on the news,  the family’s breadwinner figures in an unexpected tragedy and the loved ones are left reeling not only with the loss but because of the financial uncertainty they are left to deal with.

Photo courtesy of Geralt via Pixabay

That your HMO is enough

People often confuse their HMO coverage for life insurance. While both are great products, they serve different purposes. While some life insurance offerings include hospitalization, they generally do not cover checkups and annual physical examinations, which are the specialities of HMO. Life insurance, on the other hand, is very helpful in the event of an accident, permanent disability or critical illness. These things can be just as sudden as an untimely death, and the hospitalization and medicines they require can easily deplete whatever savings you may have, especially as you are likely to lose your job and be without the HMO insurance it provides.

While these things can be awfully scary, dealing with them head-on is crucial. It is an unavoidable fact: our time will come. And there is simply no telling if an unexpected tragedy will befall you. No one is completely immune to such things. The most you can do is to be prepared, not just for yourself but for the people you care about. 


Photo courtesy of DariuszSankowski via Pixabay

That life insurance is only for grim events

Beyond just fortuitous events, life insurance actually has other uses. It can fund your retirement, pay off tuition fees, and help you reach milestones. If, say, you retire at 65 and live 15 years more, you would need funds to live off of for the rest of your days. How would you do that if you no longer have your salary? As any financial expert will tell you, what you will receive through SSS is just not enough. Your food alone, if each meal costs Php100, would add up to Php1.6 million. How about the cost of maintenance medicines, utilities, and loans you may still be paying by this age? You will find insurance plans that provide maturity benefit that will let you withdraw the full cash value of your fund at a certain age. This will help you enjoy the same quality of life even when you no longer have an active income.

Life insurance is also great for funding your children’s education. You don’t have to be one of those people who have to downgrade their kids’ school or have them stop schooling altogether because you are going through tough times. You can avoid this by going beyond just covering the costs head on. You can put your money in a fund that will grow in time instead and keep up with the yearly tuition fee increase. You can do this by choosing plans that link insurance with investments, such as the Variable Unit Linked (VUL). This has become increasingly popular because of its ability to beat inflation.

Your life insurance can even help you reach some of your major life goals, like your dream of owning your own house, car or business. You will find plans that offer living benefits, allowing you to withdraw your funds so you can purchase or fund these things.

Photo courtesy of Jarmoluk via Pixabay

That it is expensive

Life insurance is not as expensive as you’d expect. Term insurance is by far the most affordable. A 30-year-old can have a Php500,000 coverage after paying for only Php3,000 to Php4,000 each year. That amounts to only Php300 per month, or the equivalent of two cups of coffee from a coffee shop. A VUL can cost as low as Php1,200 to Php2,000 per month. With an investment component, you get the chance to earn just enough to recover all the premiums you paid. A group or corporate insurance costs even less with some offered at a premium of less than Php100 per per year for each member of a group. Life insurance really does not have to be expensive. Mind you, you can even find plans like the Palawan Pawnshop Insurance that only require a one-time payment of Php20. 

Photo courtesy of Monoar via Pixabay

That it can wait

The truth is that you should secure protection while you don’t need it just yet, and for several reasons. For one, as you move through different life stages, you will have to deal with different needs. You may be single in your 20s but would have to be married soon and have children whom you would have to provide for, then you will grow old and stop actively earning an income. Life is simply much easier when you have a sound financial foundation. Moreover, the rate of premiums increases as you age. This is because the risks associated with older people are higher, especially in terms of health. Also, people do tend to acquire illness as they grow older, which can cause insurance applications to be declined. Insurance providers do take the efforts to manage risks. Insurance companies are known to reject applications by people who are already in a critical medical condition.

Another great reason to start paying for a life insurance now is so you could leave your investment with more time to grow. You should use the power of compounding to your advantage. This allows the fund value of your VUL plans to increase over time. You also have to remember that deaths and accidents can be sudden. No one really knows when their time on earth will end. Plus, you have to be aware of the contestability period often included in policies. If an accident or death occurs within the period, the insurance company can deny the claim after duly investigation.

Learning about the prevalent Filipino insurance misconceptions is a great start at finally taking your steps toward a financially-sound foundation. The best time to work on your financial health is now.

Contributor:



Patricia Evans
Twitter: @patevans016
A mum blogger who loves travel and interior designing

Patricia Evans is a part time interior designer and a full-time mother. She has worked in Marketing before but she quit her job to pursue her true passion: fashion and interior design.



Apr 21, 2017

Why Rental Yield is Important When Buying or Selling a Property

What makes a condo, townhouse, or house and lot for sale in the Philippines a good investment? One might think that buying a property in a prime location like MakatiTaguig or Ortigas (Pasig), automatically equates to a good investment. Any real estate broker or agent will often tell you that the best property investment highly depends on the property’s rental yield. Having knowledge of rental yields will give you a good idea of how quickly you can recover or make profit from the money you’ll invest
.

How to calculate rental yield

By definition, rental yield is how much rental income a property produces each year compared to its total value. The formula is as follows:
Gross Rental Yield = (Monthly Rent * 12 / Property Cost ) * 100
The property cost should factor in the property purchase price, along with additional costs like Stamp Duty, Brokerage Fees & Renovation or Maintenance Costs.

Higher rental yields mean better investments

Once you have the rental yield for the property you want, it’s time to compare. Most people only look at affordability or location as points of comparison without thinking too much about the return. It’s a sound approach, since properties are assets that appreciate through time. On the other hand, a more serious investor would want to compare properties by their rental yields to get a better idea of how much time it would take to get the best returns out of their investment.

A comparison of rental yields in Metro Manila

The Data Science Team at ZipMatch took a look at a year’s worth of data from 75,000 Metro Manila properties for for sale and for rentlisted on its site. Out of this data, they were able to get the average rental yield for each city in Metro Manila.

This heatmap shows the best cities to invest in based on rental yield. It is important to note that at a rate of 6.51% to 7.98%, Metro Manila’s rental yields are impressive compared to the 4.2% average gross rental yield in the Asian region.
It is evident that most cities with the highest rental yields are located in the western and southern part of Metro Manila–ManilaPasayParañaque and Las Piñas. Over the past year, these cities near the coastal area of Manila Bay have surprisingly outranked the more popular business districts like Pasig, Makati, and Taguig. Besides the fact that popular tourist attractions can be found here such as the SM Mall of Asia, Solaire Resort and Casino, and the City of Dreams Manila, a newly constructed SkyWay exit has largely contributed to the massive growth of new condo developments. This accessibility has also added interest in Las Piñas as an affordable residential option for young professionals working in Metro Manila’s CBDs.
Below is a table of the average property price and average monthly rent of cities in Metro Manila with the best rental yields.

It’s interesting to note that costlier cities like Taguig and Makati provide lesser rate of rental return compared to more affordable locations. For example, when choosing between a studio unit in Makati priced at Php 4.5M and a studio unit in Manila priced at Php 2.8M, one might initially think that the former has better investment potential than the latter. By looking at rental prices for both cities–Makati at Php 28,000 and Manila at Php 20,500, it is safe to conclude that a Manila property will provide better return on investment.
Parañaque, leads the rankings with the highest rental yield of 7.98%. It also ranks as the second most affordable city to buy property, at an average sale price of Php 1.65M for a studio unit and Php 3.4M for a 1BR. The city has a total land area of 47.28 square kilometers, and is widely known for being home to Baclaran, the Ninoy Aquino International Airport, and BF Homes Parañaque–known as the biggest subdivision in Asia.

Conclusion

These cases demonstrate that affordability or location might provide answers on which properties would best fit a buyer’s present needs, but being well-informed of various rental yields can certainly help in coming up with a more confident decision when investing on a property.
Contributor: 

ZipMatch The belief that Filipinos can own their dream home inspired us to innovate the real estate industry in the Philippines and make buying and selling of properties faster and easier.

ZipMatch offer information on real estate trends, investment advice, and personalized service by a network of top industry professionals, all with the easy convenience of online shopping—everything you want and need, and nothing you can’t understand, all at the click of a button.

They aid you through the homehunting process from start to finish: meticulous, client-specific guidance from the initial search (whether through our comprehensive online database or via a phone-in or email inquiry) to follow-up consultations and meetings down to all final decisions are facilitated with the help of our in-house real estate experts.

Jan 22, 2017

Ten Philippine Cities to watch this 2017



There is more to the Philippines than the typically well-known Metro Manila cities, and in 2017, it will be more evident in the continued development of these cities to watch, compiled by Lamudi Philippines

With sustained progress in the real estate industry backed by an overall economy that various financial institutions predict to grow between 6 to almost 7 percent in 2017, many places in the Philippines are becoming increasingly ideal to live and/or invest in.

Whichever reason to move: a fresh start, exploring new career and business opportunities, or a growing a family, ten of these places in the country, compiled by global real estate website Lamudi Philippines, stand out, and are worth your consideration for this year, and even beyond.

6. Lapu-Lapu City



Secondary cities continue to be in demand due to their proximity to capital or major cities while remaining relatively more affordable. In the Visayas, one such place is Lapu-Lapu City, a popular alternative to costlier Cebu City. In 2016, two-bedroom houses for sale in Lapu-Lapu City listed on Lamudi averaged Php2.295 million.

While having always had tourist opportunities due to the presence of the Mactan-Cebu International Airport and its different natural and historical attractions, local real estate stock in Lapu-Lapu looks to also increase soon, with projects like Megaworld’s Mactan Newtown, Sta. Lucia’s Arterra Bayfront Residences, and Futura Homes – Mactan by Filinvest Land. The Philippine Reclamation Authority is also set to start its Mactan North Reclamation and Development project.

7. Mandaue City



There may be no better alternative for accommodations and real estate to Cebu City than Mandaue City. The latter is located at the former’s immediate northeast, and is the ideal location for home-seekers that want to invest on a home near the Visayas capital as opposed to renting a more expensive house in Cebu City itself. On Lamudi, two-bedroom houses for sale in Mandaue average Php2.631 million.

New developments continues to enter the city, as homegrown developer Iron Wood Property Ventures topped off its Northstar condominium project at the end of 2016, while firms like PrimaryHomes, Inc. have gone on record to say they are exploring Mandaue as a location for future projects. Echoing the sentiment, Colliers said it expects condominiums in the affordable segment to rise in the city.

8. Dasmariñas



With declining developable land and increasing property costs in Metro Manila, neighboring CALABARZON continues to see an increase in real estate demand, particularly from buyers foregoing starter homes for long-term properties. Seemingly one of the most viable areas in the region is Dasmariñas which, based on Lamudi’s listings data, has some of the most affordable average prices for houses for sale among CALABARZON and Metro Manila cities in 2016.

At Php2.1 million, houses with two bedrooms or more remain reasonably priced in Dasmariñas. It seems the city also offers the most options, averaging the most listings (415 per month) for multiple-bedroom homes for sale in CALABARZON. This stock will likely be furthered via upcoming projects like Sta. Lucia’s Mesilo, 150-hectare first class development, and Alveo Land’s Ardia, a prime residential subdivision set between Dasmarinas and Imus.

9. General Trias



While Dasmariñas can be deemed the option in CALABARZON for mid-priced and mid-sized residences, General Trias is seemingly the place for more modest properties. This Cavite municipality has one of the lowest average selling prices for smaller houses (at most two bedrooms) at Php833,992. Based on 2016 Lamudi data, General Trias on average has 70 such properties—two bedrooms or smaller—listed on the website in a given month.

General Trias has become a go-to location for developers and their innovative takes on affordable housing, with developers like BellaVita (an Ayala Land subsidiary) and Suntrust Properties (a subsidiary of Megaworld Corp.) having established such projects in the city. General Trias is not limited to the affordable housing market, however, as diverse projects like the 140-hectare Maple Grove, the 21st township project by Megaworld, will also soon be established in the city.

10. Davao City



Seemingly a result of the elections win of now-President Rodrigo Duterte, whom the Davao City Investment Promotions Center deems the “the perfect marketing ambassador for the city’s investment and tourism potentials,” Davao City has seen a surge of investments come from local and international parties. The Board of Investments (BOI)–Southern Mindanao affirmed this, reporting Php2.5 billion total BOI applications approved and registered from January to October of 2016 were poured into the city.

While increased awareness comes increased interest in Davao that will likely result in more investments in 2017, prices for homes for sale in the city for now have remained favorable, with two-bedroom houses listed on Lamudi for an average of around Php2.5 million in 2016.


ABOUT LAMUDI
Lamudi is a leading global property portal focusing exclusively on emerging markets. It offers sellers, buyers, landlords and renters a secure and easy-to-use platform to find or list properties online. Lamudi was established in 2013 in Berlin, Germany and it is currently available in Latin America (Mexico, Colombia and Peru), Asia (Philippines, Bangladesh, Indonesia, Myanmar, Pakistan, Sri Lanka) and Middle East (Jordan, Qatar, Saudi Arabia, United Arab Emirates). Within fewer than three years, Lamudi has established its presence as a key online real estate marketplace in the countries where it is operating. For more information, visit Lamudi Philippines on Facebook, Twitter, Google+, LinkedIn, and Instagram.

ABOUT MYPROPERTY
Established in September 2010, MyProperty.ph is one of the leading Philippine real estate online and print brand that brings property buyers and sellers together. The website’s main offerings are listings of pre-selling properties and properties for sale and for rent. Both website and magazine also provide relevant and updated industry news and information for its clients and consumers. And with the release of its mobile version, finding or selling a home is made even easier. For more information, visit MyProperty on Facebook, Twitter, Google+, and Instagram.

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