Apartment as Investment

[g-gurl]

I need the inputs of those who are renting out apartments, houses and condos.

How do you compute your profit? Parang ang tagal pa namin mabawi ang aming investment. We are constructing a four door apartment (town house style) which will roughly cost P5M. Rental will be P12,000 - P15,000/month per apartment. There are other costs to consider like the annual real property taxes, maintenance, repairs and insurance. The location of the apartment is very good, it's near malls, schools and hospital. Maraming apartments/boarding houses in the area, a few high end ones and a lot of low end/old ones. Halos puno-an.

We decided to go for a near high end apartment para maka demand kami ng higher rent and cater to the taste of good paying tenants.

We are done with our building plans and building permit pero ngayon i am having second thoughts whether to push through with our project or not. Half of the construction cost will come from our savings (P2.5M) and the other half will be financed by bank with an interest of 6.88%.

Are we better off putting our money in mutual funds and stocks? Gusto ni hubby that we will proceed with the project --- he is a visual person kase parang hindi nya ma appreciate ang mga paper assets.

Hindi ako magaling mag-analyze at mag compute. I hope may mag-share ng kanilang experiences.

[Tea97]

Siguro it will depend on kaya ba icover ng rentals nyo yun loan payments? Approx 23k per month yun 2.5m at 6.88% for a term of 15 years (I assumed 15 years). Kung 2pinto na 12k, halos break-even lang. If 3pinto, 36k less yun 23k, may extra 13k ka pa na maitatabi para sa realty tax, insurance, maintenance. Try to get an estimate of your realty tax and insurance. Yun maintenance naman siguro kahit on the 2nd or 3rd year of operation ka na magbudget assuming maayos naman magiging tenant mo. Importante lang na may pataan ka in case mabakante, so make sure you also set aside some of your ongoing savings to cover your loan payment (mga 6 mos siguro so 23k x 6). Btw set aside some cash for meralco, water connection - malaki laki ding expenditure yan.

Between funds and real estate - mas gusto ko ang real estate. Kasi you can earn from: 1 - ongoing consistent income (funds dont always give dividends, and you wont know how much/when to expect); 2 - capital appreciation, which you wont realise this until you sell. Pero most times ang real estate pataas ang prices, whereas funds can lose their value below the acquisition price. And you can loan against your property, to fund another project.

Hope this helps.

[flighty_phoe]

from our analysis, real estate/apartment investment is really long-term, more than 10 years just for the ROI. so after 10 years pa talaga yung profit mo. baka best case pa ito at 100% occupancy.
what's good about this is the passive income that you'll get kahit pagtanda nyo.
based sa figures sa binigay mo:
15K * 4 units = 60K. i think this is more than enough sa amortization.
60K * 12 months = 720K per year
kung 5M, ROI ka ng 7 yrs. this is good na comparable na halos sa mutual funds.
include mo na lang yung mga addnl expenses na binigay mo.
it's a matter of choice kung long term or short term ba yung gusto nyo

[miss resilient]

hirap naman ng computation na yan

iyong unang bahay na binili namin yun ang plan namin paupahan...gusto ko ring negosyo ang paupahan parang less effort...

[m_lim]

^yan ang akala ng madami...

tandaan: mabilis magpa upa, mahirap maningil. madaming umuupa ang di nagbabayad.

in short, madaming makakapal. hahahaha

[Tea97]

I think dapat din maging vigilant ang landlords sa pag prequalify ng tenants - kaya importante humingi ng referral letters from their former landlords or from their HR.

Kung puede nga lagyan ng security sa credit card - like what hotels do, that would be better, kaso that last one is hard to implement.

[bomfalleralla]

Just found a good blog about landlords.
http://www.landlordzone.co.uk/landlordzone-update/the-business-of-good-landlord-ing

[hisana]

^yan ang akala ng madami...

tandaan: mabilis magpa upa, mahirap maningil. madaming umuupa ang di nagbabayad.

in short, madaming makakapal. hahahaha

Medyo agree ako. My parents rented out properties before. Pahirapan pa nga di ba nung unang panahon, ikaw pa yung pupunta sa kanila para mag-collect tapos magugulat ka na lang sa delaying tactics ng ibang tenants. Kaya eventually nag ibang business na lang yung dad ko. My mom still rents out 2 apartments, yun lang daw kaya nya i-manage.

As for me, a serial renter (LOL), madami na rin ako nakuhang horror stories from the various landlords and caretakers. Sometimes feeling ko swertihan lang din talaga. Someone who looks good on paper might skip out on you later on or be disruptive (kagaya na lang nung isang neighbor namin dito, kesyo bakit daw sya ganun, doctor pa naman daw. Eh ano naman ngayon kung doctor? Being one doesn't mean you automatically have good character, ewan ko why people assume that. He could be a sociopath, for all we know). Meron iba na questionable nung una pero okay naman pala. Hirap din ma-gauge in the beginning kasi.

[be_Jenuine]

^yan ang akala ng madami...

tandaan: mabilis magpa upa, mahirap maningil. madaming umuupa ang di nagbabayad.

in short, madaming makakapal. hahahaha

just an advice wag magpapaupa nang kamag-anak for sure away yan. ahaha My parents owned 2 units one in DMCI and one in Robinsons but ayun nga pinaupahan niya sa relatives. Ang result dahil kamag-anak di na nagbabayad.

[rasee16]

^tama. parang obligasyon mo pa na patirahin sila doon eh ang kapal lang.

But really, real estate is a tricky business. Malaki ang puhunan, matagal ang ROI. HIndi rin sigurado na hindi mababakante. Mas maappreciate siguro ng mga anak mo yung naipundar mong apartment. Sila talaga yung makikinabang kasi hindi na nila need maglabas ng pera, puro papasok na and rental income. Need nalang nila siguraduhin na makahanap ng ok na tenants na magbabayad on time at hindi bababuyin ang unit.

[eischied_21]

Mas nag-aappreciate ang value ng property kesa invest sa stocks/MFs.

Wala talagang easy money.

[pollard96]

We are accomplished with our constructing plans and constructing allow Pero ngayon i am having 2nd ideas whether or not to push thru with our challenge or not [average utility bill in the USA Half of the building price will come from our financial savings (P2.5M) and the different half of will be financed by way of a financial institution with a hobby of 6.88%.