Google Pampanga Real Estate Guide, Trend and Review: STEPS IN MAKING CASHFLOWS THROUGH REAL ESTATE RENTALS

Wednesday, February 20, 2008


Are you happy with the pay you receive?

Earning extra-income is one of our foremost priority in making both ends meets. There are times that we as workers have to settle for a measly sum heavily deducted our overtime pay with tax when we are toiling for hours in a dead end job that doesn't pay and compensate you much. It is a good thing if you have extra cash on hand then why not make money work for you through passive income. Better yet to "Work Smarter, Not work harder".

There are certainly many potential streams of passive income where you can sit tight and let it grow. Example of these are investments through stock, mutual funds, time deposits, money market and bank deposit but these streams cannot compensate much in terms of Return of Investment. However these are also ideal and advisable for those who are building up their assets (wealth in general), diversifying through as additional cash flow and live a fruitful retirement during our old age.

Real Estate is still the king wherein it has become advantageous for most people nowadays as the construction of residential and commercial building are sprouting in the skyline of Metro Manila. Thanks to the influx of foreign investment brought about by the strong peso, Business Process Outsource (contact centers) and remittance of our Overseas Filipino Workers (OFW) who have been the lifeline in the Philippines. Demand for properties especially in Makati for BPO is high including residences for foreign expatriates who want to retire as well.

As a real estate professional, I too have mixed feeling of the tall skyscrapers blocking the view of the blue sky of the Metro Manila plus the progress we are experiencing. Hopefully, we are not affected with the U.S. subprime crunch wherein there are too many foreclosures in America. A piece of advise, much better to buy a property now in the U.S. It also becomes a happy notion for me that I can sell a residential condominium and give a satisfied client with a smile on his face on moving-in and living in his own condo unit or house.

Real estate rentals have become a lucrative business for most people. An example of this is Lito, he inherited a property from his parents a 365 square meter bungalow home located in corner street in Cubao, Quezon City built in 1960s. The property is accessible to Aurora Boulevard which is few minutes away and is inside a busy street of Public Utility Jeepneys. Although it is old, he did rehabilitate it a little just to make it presentable to possible clients. In two months time, it attracted a couple working nearby a call center in Libis at a agreed price of PhP 7,000.00 per month on the rent for this three bedroom bungalow property. The place is a bit busy but for the couple it is conveniently close to their workplace so they decided to get it.

Cash came flowing from the start and at the same Lito received the one month deposit and two months advance for the house. Let say, the house is earning PhP 7,000.00 per month multiplied by 12 months it will be earning at net of PhP 84,000.00 annually. Other expenses like taxes, repairs and other unforseen circumtances like unpaid dues etc are not yet included in the computation. Just be ready for anything.

Another example is Ren, he is involved lease-hold and sublease properties wherein he is using another man properties and subleasing it to other people. Here is how it works. Ren finds a property close to a university in the U-Belt. It is a few minutes away from UST and FEU and close to Espana. Let say he finds a property, an old two storey wooden house. Somehow it was rehab by the real owner and is renting it at PhP 6,000 per month. Ren sees an opportunity on this and focused its hind sight on this income earning potential. He grabbed it and asked the owners if he can sublease the property

Better to insure your property with non-life insurance like fire and others if ever you want to recuperate your investment from disasters.

Read the new laws on rental control. I believe the Senate have passed recently a law updating the old rental control law which expired last 2005. Right now, the laws governing the rent control was extended till December 31, 2008.

Residential condominiums are also excellent investment as real estate rentals. You can buy one at a low price during its pre-development stage and when it is ready for occupancy. You can but in the "FOR RENT" sign on the homeowners bulleting board. Right now, the best location to invest are those close to the university and schools wherein parent of students coming from the province need to find a place to live close to school and which is convenient at the same time than living in a dormitory. A colleague of mine owns a condo close to De La Salle University in Taft Ave, Manila. He leases at PhP 18,000 per month and is earning at least PhP 216,000.00 net. It is a cash cow indeed. You'll just have to worry paying the monthly dues for the maintenance. Other utilities will be shouldered by the lessee.

In Rental properties, you see to it that you make an monthly inspection or sometime quarterly inspection on the property. Check for leaks, termites and other problem that your tenants might call your attention to. Always establish rapport with them and even better if you talk to them from time to time.

So if you intend to be a landlord, you therefore will have sufficient passive income for your wealth or asset to grow in terms of money without much exerting physical effort in working for a company.

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