Tag Archives: Ayala Land

Property business is also for young and not-so-rich

Philippine Daily Inquirer
By Michelle V. Remo
August 25, 2012

With interest rates at historic lows and supply being abundant, the time is ripe for investing in real properties.
Contrary to common notion that it is fit only for big enterprises and the extremely rich, the property business is also something the young professionals and the not-so-rich can engage in.
“While an individual is young, that is the best time to start building one’s property portfolio,” Carl Dy, Property sales coach and Ayala Land Premier sales director tells SundayBiz.
Ayala Land Premier is the developer of the group’s most expensive projects.
At 34, Carl already has several properties in his portfolio from which he earns extra income, mostly from rent.
The property sector in the Philippines has continually grown over the past three years as evidenced by the growing number of condominium buildings among other real assets.
Because Asia is seen to continue driving global economic growth in the years to come, emerging markets in the region like the Philippines are expected to be keeping a robust growth as well.
Carl says that at a time of economic boom, the property sector is one of those that benefit the most. As incomes rise, he says, demand for properties grows as well.
Given this backdrop, he says, business-minded individuals should easily see the income opportunity over the medium to long term from investing in real properties.
“Stars are aligned right now. Because of the economic boom in Asia, the benefits are trickling down to the Philippines. Almost all sectors are enjoying good business, and the property sector is not exempted,” Carl says.
Carl, who grew up in Binondo in Manila seeing his parents run a hardware, says even a young professional like himself can engage in the property business. The business is actually much easier than other types, he opines, as it requires less management effort compared to, say, running a restaurant.

Medium to long-term return
However, Carl says, running a property business requires patience as far as generating income is concerned. Unlike other businesses that could generate profits within the short term, the property business is meant for those who have the patience to wait over the medium to long term to generate significant income.
For instance, one way to earn from the property business is to buy a piece of land, let its value appreciate over the years, and then sell it. He says the increase in the price of land can be significant over the years. Such a strategy does not entail too much management effort, but requires the skill of waiting, he says.
Another way to earn from the property business is to buy an asset—be it a house and lot, a townhouse, or a condominium—and have it rented.
A young, self-supporting professional may not be able to buy a property in cash, and so what he can do is pay for the property in installment basis.
He may not earn significant income in the initial years, Carl says, especially since monthly amortization is still being paid. The income generated from rental of the property will mostly be used to pay for the amortization, he adds.
But once the years of amortization are over, Carl says, the owner may fully enjoy passive income from his property, the value of which will have already increased significantly over the years.
“One just needs patience. Instead of thinking of not being able to generate profit in the initial years, one should think that he is able to fully pay for a real property at almost no cost (because the one renting is the one effectively paying the amortization),” he says.
Depending on appetite and financial capacity, Carl says, an individual may opt to buy a few properties and rent those out to generate much more income in the years to come.

More tips
Carl says there is an option for property owners to rent their assets as fully furnished ones. Furnishing a residential property gives it much more value and allows owners to impose higher rent and thus generate better income.
The property expert also says owners must learn the value of taking care of tenants. If tenants have requests, say household repairs, the owners should agree as long as those are reasonable. It could be regretful if a tenant, especially one who religiously pays rent, leaves because of dissatisfaction, he says. Having no rental income for a month or two because a tenant has left and because a replacement has yet to be found could be much costlier than having granted the old tenant’s minor request, Carl adds.
The cheapest is not always the one that gives the best value for money
On choice of property to invest in, Carl says one should not solely consider price of an asset. Not all cheap properties give the best value for money. He says a property that is of good quality and is comfortable to stay in could easily attract potential tenants and could give better income opportunity in the future.
“A cheap property is not always the one with good value,” he says. He says this is the reason a buyer should also take into account quality of the property because one that has good quality also appreciates faster in value over the years.
Carl, who is an architect by education, says another important thing to remember in being in the property business is the need to know a product before buying and investing in it. Knowing the product means knowing the developer, the profile of its location and of the people living in the area, and the cost of living in the location of the property, among others. Knowledge of said information helps better determine accurate pricing for a property, he says.

Properties vs Portfolio assets

The beauty of buying properties instead of liquid assets, such as securities, is that real assets are difficult to lose and waste, Carl says. Because selling a property takes much more time than withdrawing cash from a bank or selling a stock, the investor is forced to be engaged in an investment for the long term.
“Unlike in the case of cash or portfolio assets, one does not have the urge to sell a real property just so he could buy stuff he wants but does not really need. Investing in real property forces one to become a long-term investor,” Carl says.
Investing for the long term can generate significant income that could help secure one’s future, he says. Since the property business is a long-term venture, starting out young gives one an edge over the others, the property guru adds.

Buoyant consumer confidence ups real estate outlook

The Philippine Star
November 05, 2010

MANILA, Philippines – Sound macroeconomic fundamentals and brighter economic prospects raised consumer sentiment in Q3 2010 and, according to a survey by the Bangko Sentral ng Pilipinas (BSP) Department of Economic Statistics, the country’s confidence index increased 14.7 basis points, the highest reading since the nationwide survey started in 2007.

Condominiums continue to be the most sought after residential real estate in the Philippines and the trend of living closer to work will ensure buoyant demand for these units. This is reflected in the strong sales momentum seen at the Raffles Residences Makati where, backed by strong customer response, the third phase of inventory has been released for sale.

“Build quality and design excellence has always set this project apart and customers are aware of the quality and superior standards that we bring to our projects. I believe the strong response from the market is a testament to this. We are at an exciting stage in the construction process,” said Garry Constantine, project general manager, KHI-ALI Manila.

In keeping with the Raffles brand, the precise engineering of the design has meant that all aspects of this tower are built to the highest quality and consistency. The developers, KHI-ALI Manila – a joint venture between Kingdom Hotel Investments (KHI) and Ayala Land – have ensured that the building meets all international and local building requirements.

As part of KHI’s value creation strategy, the company develops branded residential components alongside hotels in high growth markets, like the Philippines. This strategy mandates internal quality protocols to qualify for superior certification standards by reputed agencies. The Raffles Residences and its designs are being appropriately certified by internationally renowned consultancy firm, Bureau Veritas of France.

“The support for quality construction is reflected by the brisk sales pace the project has seen to date. We are delighted to deliver a product that our owners and guests will be proud of for years to come,” according to Brad Berry, vice president of Real Estate at KHI.

Raffles Residences is developed by KHI-ALI Manila. KHI, headquartered in Dubai (UAE), is the leading international hotel and resort acquisition and development company focused on high growth emerging markets such as the Middle East, Asia, and Africa. The company has ownership interests in 27 properties in 19 countries, including 22 operating hotels and resorts, and four hotels and resorts currently under construction.

Raffles is a collection of luxury hotels and resorts worldwide, each distinguished by its luxury, elegance and residential charm. Each hotel is a landmark in its respective city, positioned at the top of its local market and rated among the very best in the world.

Raffles pursuit of service excellence has earned for its hotels and resorts a legion of international accolades, including Condé Nast World’s Best Places to Stay and Travel and Leisure’s World’s Best Awards. Raffles Hotels & Resorts is owned by Fairmont Raffles Hotels International, a leading global hotel company with over 85 hotels worldwide under the Raffles, Fairmont and Swissôtel brands. The company also owns Fairmont and Raffles branded Residences, Estates and luxury private residence club properties.