Chasing the dream

by Steve Van Derodar

San Francisco High Rise Listing | Photo via SVDerodar

If labor is work, then the fruits are as precious as gold; they say, a dream becomes so as a result of the pursuit, it’s not the cause of it.

Many of us chase the dream in matters of economic prosperity. Owning an income-generating property is the topmost desire for many of us. Who wouldn’t like having a few as they can be profitable? As many have become increasingly aware of the opportunities in property investments, it’s no wonder that some people just don’t have one; they try to acquire more when able.

Believably, properties are the best way to build wealth. Typical to Filipinos, investment in real properties isn’t only for primary residential intents; they use these as a source of income. Many of them have some passive income through rentals overseas or those living outside of the country; having a piece of the Philippine Property often offers a sense of pride in its ownership.

Market trends show the preference for high-rise living among tenants, especially if they design superior condominium units with a sophisticated touch. It includes building renderings that are unmatched and distinctive. These are, without a doubt, high-yielding in rental rates. And for investors, giving them more reason to finalize purchases and begin cashing in as properties tenanted on a long-term basis.

A few years ago, I was impressed with a financial professional from Jakarta, Indonesia seeing him walk around on his newly bought Makati loft property. I learned that he has been diversifying investments through properties. When asked if it’s his first investment with the developer I work with, he answered no; in fact, he has a handful. He has been putting investments into properties on his belief in them as sound investments. He has had active rental units and is quite satisfied with his income.

I remember the book depicting the ancient Babylonians as the first people to discover the universal laws of prosperity, The Richest Man in Babylon, by George S. Clason, revealing their secrets for creating, growing, and preserving wealth. Through the entertaining tales of merchants, tradespeople, and herdsmen, they say there’s much wisdom on how to keep more out of what you earn. Also, get out of debt; put your money to work, attract good luck, and choose wise investments. Safeguard a lasting fortune … and real estate investment is very much part of it.

There’s no doubt that there is real excitement and pride in owning. A friend of mine in New York City was ecstatic in saying, “I got approved for a home loan. I finally have a condo of my own, I have been wanting one if not more!” She added, “I only provided a Certificate of Employment showing my monthly income, an Identification Card, and of course a down payment, that I have saved for years. I really wanted to have a property that can be income-generating.” She and many others are proud of this real property acquisition, and some are building a portfolio with their rental units, which they often enroll in property leasing management.

“Real properties are tangible examples of asset building accruing value and appreciable income. Even if you start with not-so-expensive units or entry investments in great locations, it should still be a wise investment.”

Often, in random conversations, we share our dream properties, and while we know that the ‘sky is the limit’ with imagination, others pursue their dreams. That’s why others work hard to achieve their goals. Real properties are tangible examples of asset building accruing value and appreciable income. Even if you start with not-so-expensive units or entry investments in great locations, it should still be a wise investment.

For first-time buyers, it is quite an easy process to own properties. You have to have a disposable income, and that your monthly amortization should not exceed 30% of your monthly gross income. Banks in the Philippines are more than willing to lend you money to help you buy your dream home but first, you need to prove your financial capability and submit the required documents. If you qualify for home loans, you can borrow up to 80% of the property’s value. Banks base your financial capability on how much you are earning. Banks take on fewer risks by lending to high-earning clients. The higher your annual pay is, the higher are the chances of getting a home loan. Whether you are thinking of 5 million, 10 million, or higher value units, you should be able to determine your affordability.

Banks will check your credit history; you are more likely to get approved if you can keep up with your payments. If you have tons of debt like personal loans, credit cards, and car loans and have a hard time paying for all banks, you will reject your application. Having a savings account or a current account you can link to your home loan can benefit your situation. If you have a savings account, this proves that you have a good credit standing. Another way to determine if you can afford a housing loan is by getting your DSR or your Debt Service Ratio. The formula for getting your DSR is DSR = monthly debt repayment obligations/take-home pay per month. In the Philippines the acceptable DSR is 50%, as set by the BSP (Bangko Sentral ng Pilipinas).

“At the end of the day, real estate remains a wealth-building vehicle. Take time understanding its processes to your profitability. Many have been quite successful with it, capitalizing on its overall potential. Haven’t you been dreaming all these? It takes commitment, responsibility, and willpower to realize a dream.”

I may have seen clients on the full spectrum, from those acquiring their very first investment property to those who constantly invest when a perfect opportunity arises. However, real estate isn’t necessarily for everyone because of the financial commitment and, most importantly, the risks involved in any undertakings. Mortgage payments aren’t a joke, as the initial payment covers both the interests and the principal. The extra costs also of maintaining a property can be costly. However, property managers take care of those when their services are fully enrolled.

At the end of the day, real estate remains a wealth-building vehicle. Take time understanding its processes to your profitability. Many have been quite successful with it, capitalizing on its overall potential. Haven’t you been dreaming all these? It takes commitment, responsibility, and willpower to realize a dream.

Going back on the book’s subchapter, the Five Laws of Gold. It said that “Gold is reserved for those who know its laws and abide by them.” It is apropos to say that it takes wisdom to build wealth, “Who can measure in bags of gold, the value of wisdom? Without wisdom, gold is quickly lost by those who have it, but with wisdom, gold can be secured by those who have it not, as these three bags of gold do prove.”


(Stevenson’s experience in Philippine Real Estate spans more than 15 years. He has been involved in horizontal, vertical, vacation, and commercial properties. He has worked as an International Property Specialist to markets in Asia, Europe, and North America with Ayala Land, Federal Land, and Century Properties. Through PhilHouseHunters, he offers real estate investment opportunities, marketing, and consultancy with a key focus on Metro Manila and Mega Cebu areas. Visit www.philhousehunters.com. Email at derodarsales@gmail.com.)

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