Can You Afford That Property?

There you are looking at the classifieds, searching for the perfect home for you and/or your family. You don't want to get the services of a broker because you thought you'd have to pay him/her (FYI, you don't) so you're going to take your chances and find something on your own, your pride depends on it!  Well, OK, sure, why not, it's your prerogative if you don't want to get the services of a broker, but just so you know, you don't HAVE to pay the broker/agent.  Let's clarify some terms before we move on to the meat of the story.

An agent may or may not be a licensed broker.  An agent is somebody utilized by the developer to market their properties.  In that sense, even a licensed broker may work as an agent for a developer.  However, a salesperson is somebody who works for a licensed broker.  So if you were looking to find a property that is no longer owned by the developer (resale properties), then you should not be talking to an agent, you should seek the assistance of a licensed broker or a salesperson who is accredited under a licensed broker.  So if you want a property that is still sold by the developer, talk to an agent working in-house for the developer, or find a salesperson with a broker who's accredited with the developer, or the broker himself.  If you want a resale property (property that's being resold), then look for a salesperson accredited under a broker, or a broker, not agents. 

Why look for a broker or salesperson accredited under a broker?  Well, the seller is the one who pays the broker/salesperson the commission, not the buyer.  Of course, if you want to give the broker/salesperson some incentive for helping you out, or you're so very happy with the service extended to you, then you may do so, but you are under no obligation to.  In fact, if the broker is being compensated by one party (either buyer or seller), he should make it known to the other party so the other party may choose not to pay the broker anymore.  So really, it's to your best interest to get the assistance of a licensed broker or an accredited salesperson (or an in-house agent) if you're buying property because IT'S FREE!

Now, once you find that dream property, how do you know if you can afford it?  It's really easy.  Well, I say easy in terms of computing for it, not in terms of affording it.  That's up to you!  If you know the monthly amortization, how do you know what your gross income should be to find out if you can afford the monthly payments?

• Monthly amortization / 30% = Gross income needed

If all you have is your gross income, how much can you afford in monthly amortization payments?

• Gross income x 30% = Monthly amortization

Let's have an example:  Your gross monthly income is P50,000.  How much monthly amortization can you afford to pay?

• 50,000 x .30 = 15,000

Another example:  The ad you saw says that the monthly amortization is P12,000 for 15 years.  Your gross monthly salary is P30,000  How do you know if your income can pay for that?

• 12,000 / .30 = 40,000 (Since you only make 30k a month, you can't afford it)

Now don't feel bad.  This isn't the end of the world.  You have other options.  One is to look for a bank or lender with lower interest rates.  Another is to look for a co-borrower.  One other option is to look for a lower-priced property.  You could also opt for in-house financing, if it's available.  Yet one more option is to marry a rich guy or girl... Just kidding!  If you can find an acceptable property priced just right, and find a lending institution that has low interest rates (preferable less than 10%) fixed for 10 years, then that would be great.  After doing your due diligence when looking for a good bank, make sure you ask your broker to help you figure out if it's the best deal.

Good luck!

Jon

Should Condo Dwellers Expect Higher Fees Soon?

This is a synopsis of the article "Higher Fees For Condo Dwellers?" by Mr. Jun Ramirez that appeared in Manila Bulletin on November 8, 2012 in the Metro News section.  No representations are made or claimed.

Condo dwellers and owners are likely to be paying higher association and membership dues soon because the Bureau of Internal Revenue (BIR) has decided to impose income and value-added tax (VAT) on these monthly charges.

Apparently, in previous BIR rulings, condo corporations that collect said fees were exempted from paying the taxes (income tax and VAT) on the grounds that these were not for gain nor profit, but for managing and maintaining the condominium property.  However, BIR Commissioner Kim S. Jacinto Henares appears to disagree and has withdrawn the tax exemption privilege in her recent Revenue Memorandum Circular No. 65-2012 because "it has no legal basis."  She maintains that association dues and membership fees form part of the gross earnings of the condo corporations, thus subject to both income and business taxes.

Commissioner Henares further explains that the VAT collection is in line with Section 106 of the tax code, imposing it on persons or entities engaged in the sale of goods and services.  Thus, even non-profit and non-stock corporations, and even government entities, are subject to VAT on the sale or exchange of goods and services.  This ruling was affirmed by the Supreme Court on its March 30, 2000 decision (BIR vs. the Commonwealth Management and Services Corporation).

In other words, this withdrawal of the tax exemptions might (or should I say 'will?') increase the association and membership fees as well as service fees because the condo corporations and operators most likely will pass on the extra financial burden to their residents and unit owners.  

For those who do not know, VAT is currently 12%.  So if this is going to happen, expect your dues to go up by at least that much.  Ah well, it's still worth the convenience of living in a condominium, isn't it?

Keep your chin up,

Jon

Love, Sex, Money, Time and Distance

Alrighty, what do you think of the title?  Perhaps it's strange that I'm writing about this now, since this is such a break from what I usually blog about.  But on the other hand, I think it's about time I write about it.  Truth is, I once was married.  We've separated since and had our ill-fated union annulled, but the words she left me as to the reason why we didn't work out haunts me to this day.  She actually mentioned just three: love, sex, and money.  2 out of 3 is okay, she said, but we only have 1 out of 3, so it wasn't worth the effort.  I've taken the liberty of adding the fourth and fifth: time and distance.  I've realized that most, if not all, relationships fall by the wayside due to these 5 factors, and I've decided to just tackle them today.  IF by any chance you think I'm wrong, feel free to call my attention.

LOVE.
So, what about this general term?  Let's not mince words, I'll put it in bullet form.

• fell out of love
• fell in love with somebody else
• too little
• too much
• not in love in the first place (situational)

SEX.
Ahh sex.  So good, yet so bad.

• too little sex (usually for one of the parties involved)
• too much sex (again, usually for one of the parties involved)
• having sex with somebody else
• no sex at all (no more attraction or too much anger that the intimacy is lost)
• unsatisfactory performance of one or both parties (when one or both won't give in to the desires and wants of the other for satisfaction, assuming it's reasonable)

MONEY.
Money makes the world go round.  And relationships last, apparently.

• too little money (it's always more is better, yes?)
• no money! (supposedly, husband is lazy and not doing enough to make money... You expect the wife to work?!? No, they're for staying in the house looking all pretty and taking care of the kids - with a nanny and maids, of course)
• no money!! (where's the future in a relationship when the guy can't even afford the finer things in life eh?)
• NO MONEY!!! (you can't even get married the right way, don't expect to hold on to a relationship)
• lots of money (maybe in some VERY rare circumstances only, if any)

TIME.
What competes for his/her time? 

• family, work, friends, hobbies
• iPAD, smartphone games
• Twitter, Facebook, Foursquare 

DISTANCE.
Distance is not only a physical separation, but can also be emotional, spiritual, and mental.

• differences in opinion (pride on who's right)
• spouse is abroad
• differences in religion, upbringing, beliefs
• differences in education (boredom might set in)

There you have it, my 5 main reasons why relationships fail.  There might be subsets, but these, in my opinion, are the real culprits.  LOVE is a category all its own actually, since falling out of love might be a result of a lack in the other 4 reasons, or it just happens that even though everything else is perfect, you just lose it.  The other 4 are things you can do something about (be more open-minded about sex, work harder, don't spend too much time with other friends, etc.) but if love fades, it's game over anyway.

The real reason why I wrote this is to acknowledge the power of these factors in my life.  And because I'm bored and I want to write a new blog post.

See you next time!
- jon

4 Months with Alveo Land: My Thoughts

Okay, I know that's a long title, but I wanted it to be as descriptive as possible.  Yeah, I've been quiet for some time, and I feel bad about not updating my blog, so here I am again.  This time around, I'm going to rant about the 4 months I've spent with Alveo Land (subsidiary of the famed Ayala Land Inc. here in the Philippines).  Well, rant may be too strong a word.  It's really more about my thoughts, my experiences, my insights as an in-house property investment consultant (PIC) with Alveo Land.  PIC is a glorified title given to sales agents in Alveo Land.  And while licensed real estate consultants aren't too happy with it, there's really no law against using the word 'consultant' unless they copyright it, which is impossible.  As a licensed real estate broker myself, I understand where they're coming from, but like I said, this is a losing battle.  Now on to my official rants!

Allowance
Lest I be misunderstood, I will state beforehand that I am happy we're given an allowance.  An allowance enables us to go to work, eat, commute, and invest in our individual and collective sales efforts.  Don't get me wrong, it's by no means enough, but it never was supposed to be in the first place.  If all you lived off on was the allowance, you'd never be able to marry and have kids, buy a house and retire later on.  There's just no way that's going to be enough.  This is one critical lesson I learned being an in-house agent: you gotta give your agents an allowance.  As a licensed broker, I am allowed to have sales people under me, and prior to joining Alveo Land, I did try to recruit sales people, with dismal results (should I say ZERO results?).  It was because I didn't offer an allowance.  Even for their seminar I didn't say I was going to shoulder it.  Now I know better.  Have allowance, will have sales people.  Trouble was, I was broke (still am).  Plan for later: save money to have enough to offer as an allowance to at least 3 sales people for at least 12 months.

Manning
What can I say?  I've never really thought I had the guts to approach people and hand them a flyer.  I guess I was always too proud of a bast@rd.  I have to admit though, I thoroughly enjoy manning our booths.  It gives me the chance to observe people while not being stuck in an office.  Add to that, it's almost like I'm just spending my day in the mall while actually improving my chances of putting myself in front of an interested prospect.  An important lesson I learned is that flyering without getting a prospect's information is a waste of time.  The real function of flyering is to get contact information to follow-up on.  One thing I can say about Alveo Land (and other subsidiaries of Ayala Land), is that having Ayala as a parent company is a definite godsend.  Without Ayala malls, where would we be?  We'd be on the sidewalks or parking lots, playing hide and seek with guards.  Yup, Ayala's the best.  However, I have to be honest, on the downside, Alveo's marketing department leaves something (actually, a lot of things) to be desired.  Our booths pale in comparison to even Avida and Amaia (our middle-class and most affordable-class brethren).  In some cases, aside from a table and some chairs, we don't even a scale model to show off.  If you've seen Avida's booths, you know what I'm talking about.  Still, it's all good, I'm not gonna bite the hand that feeds me.

Projects
Alveo Land's projects are... hard to classify.  We're not middle-income, yet not exactly top of the line (that would be Ayala Land Premier).  I'll just say that I think there's a little blurring of the lines between Ayala Land Premier and Alveo Land.  Our target market are those people who can afford and have the means for Ayala Land Premier but are more... practical... for lack of a better word.

Terms of Service
As with all other sales outfits, sales agents are only given 3 months (or 1 quarter) to hit sales quotas, or you're out (more specifically, out of payroll or OP).  Aside from that, we are required to submit 15 (or more) customer contacts via customer info sheet (CIS) weekly,  at least 2 site trips (viewing of model units) every week, and at least 4 guests during events.  Of course, the real measure is closing a sale or sales, but if you hit most of the targets, your team lead would be more inclined to give you an extra month if you haven't closed a sale yet in 3 months.  Sales is a numbers game, so if you contact more people, there's a better chance of actually finding a prospect who's motivated, interested and has the means. Cold calling was recently introduced to me, an activity that I didn't think I could do.  It's like making prank calls, which is fun in a way, once you warm up to it.  Lately, I've taken a liking to coming up with scripts to raise my success rate of setting appointments.  No appointments yet so far, but I'm sure it's just around the corner.  Suffice to say, if you keep at it for 6 months or more, your chances of closing a sale and succeeding in sales increase.  I'm pushing 4 months without a sale yet, so I'm really really looking forward to that sale happening soon. 


Parting Words
I really like working for Ayala, and I will take it hard if I'm unable to sell before I have to work without an allowance...  Worse comes to worst, I'll have to go back to working in the call center industry again and giving up sales for the meantime.  I hope that doesn't happen.  Unfortunately, a lot of financial considerations are already clamoring for my attention, and a temporary failure in sales will seriously tie my hands behind my back in terms of continuing with this endeavor.  I can use all the help I can get.  So if you know somebody who's interested to invest in real estate and can afford an Alveo, please refer me.  I will share the good karma, promise!

Time Value of Money: So What?

I know there have been a lot of speculation and general mystery on  whether or not one investment vehicle is better than the other over a period of time.  Some people think why should they invest their money, and would it be better to invest it elsewhere? 

The answer generally lies in the time value of money (TVM), what a certain sum of money will be worth later in the future depending on a specified rate of return.  For savings accounts, it's typically around 0.375% per annum.  For mutual funds or stocks, around 7%, and for time deposit around 3% per annum.  Specifically for Ayala projects, the rate of return is projected to be anywhere from 8% to 20%, so that should already be a good indication how much the project would be worth after a period of time, especially for our pre-selling projects. 

For example, over a 5-year period, with the above-mentioned rates:

• Savings account: Future value of a 3M investment will be 3,056,673.46
• Mutual funds or stocks: Future value of a 3M investment "could" be 4,207,655.19 (stocks and mutual funds are not fool-proof and carries with it a certain degree of risk especially if not managed properly)
• Time deposit: Future value of a 3M time deposit for 5 years will be 3,477,822.22

Ayala projects with a projected rate of 8% conservatively, the future value of a 3M investment in a condo project such as The Lerato or Kroma Tower in Makati would be around 4,407,984.23 at time of turn-over.  More so now that Ayala is investing around 60 billion in the ongoing development of Makati, real estate property rates will typically trend positively as well.

That's just an example of how much your investment might be worth 5 years from now, with rates remaining more or less the same as they are now.  If you want to read up more on TVM, click HERE.  Play around with a future value calculator to get a better feel of it.

Hope that helps you understand how to make better investment decisions! 

-Jon

Alveo Land: Learn From The Best!

I joined Alveo Land last April 16, 2012.  Although I'm a licensed real estate broker, I joined as a regular in-house property investment consultant (PIC), or a sales agent in other words.  During the interviews, I was asked why I was agreeing to a sort of a step back instead of getting accredited as a broker (which pays a higher commission).  Truthfully, it's not a step back at all.  It's a step forward for someone like me who has no actual working sales background.  So I was elated when I was accepted to their ranks.

For those who don't know, Alveo Land is an Ayala Land subsidiary.  Ayala Land has diversified their real property business to address income segments.  Here's the breakdown for your information:

• Ayala Land Premier (ALP)
• Alveo Land
• Avida Land
• Amaia Land

More people can now enjoy the prestige and value offered by Ayala Land properties because of this diversification.  The diversification does not affect the quality of the properties.  What actually sets them apart is how near the property is to a commercial business district (CBD), and the size of the properties.  For Premier property owners, they enjoy accessibility and proximity to major establishments and business centers.  For Alveo Land property owners, they might have to walk a little.  For Avida Land property owners, one or two rides away.  And for Amaia Land property owners, their property might be on the outer fringes of the city, or already in the suburbs, which makes it very affordable.

Our current projects in Metro Manila are:

• The Lerato (tower 2) - pre-selling, turnover in 2016, Malugay St., Bel-Air, Makati
• Kroma Tower - pre-selling, turnover in 2017, Dela Rosa St., Legaspi Village, Makati
• High Street South - pre-selling, , south of high street in Bonifacio Global City
• Two Serendra - The Sequoia - pre-selling, final tower in Two Serendra, Bonifacio Global City
• Ametta Place - townhouses in Pasig City, turnover in 2012
• Ferndale Villas - townhouses in Quezon City near Commonwealth Ave., turnover in 2014
• Celadon Park (tower 2) - condo within Celadon Residences, Sta.Cruz, Manila (behind SM San Lazaro)
• And the one in Tagaytay - Kasa Luntian, pre-selling, turnover in 2017

It's been said that Ayala properties are expensive...  But are they, really?  If you're serious about real estate, sooner or later you'll start thinking of Ayala properties.  The Ayalas have been in the Philippines for more than 100 years now, and they have a reputation to protect, so you can always expect the best and the finest from Ayala properties.  Ayala properties are not the lowest priced, that's true, but they're the lowest risk (and ISO-certified!), and if you know the value of money, that should be enough to tell you why Ayala properties are very well regarded in the industry.

So what are you waiting for?  Our inventories are always almost sold out within 1-2 years of launching.  Invest wisely.  Invest in Alveo Land.

We have an ongoing promo for The Lerato, and now is the perfect time to invest in Makati.  Wanna know more?  Call me, text me or email me, I'm here for you.

 
Live Well,
Jon

For Announcement Only: The Aventi Townhomes

Wow, I haven't blogged in such a long time!  Once a blogger, always a blogger I guess.  It's one of those things you just have to do, otherwise it's going to nag at you after some time.  So here I am again, with one project I'm proud to present - The Aventi Townhomes.  Located along Panay Ave. in Quezon City, this townhouse development is ideal for those who want everything to be close by.  Sure, those who work in Makati or The Fort might have to take some shortcuts, the location still is ideal overall.  It's flood-free, in a relatively quiet neighborhood, just a few blocks from schools, the Amoranto sports complex, Capitol Medical Hospital, and the lively Timog area for all your gastronomic and party needs.  More than that, this is a green development, designed to reduce electricity needs which lowers your overall electric bill!  It's beautiful and practical, and priced just right for the value and benefits you get!

Here's a gist of the project:

• Townhouse property, not condo.  You get a title for the land and the house (TCT)
• 4-storeys, 115 sq.m. lot area, 350 sq.m. floor area, 3-car garage
• Maid's room, driver's room, small office or guest room, den, family room, garden
• 200K to reserve, 16-17M to own, turnover tentatively this December 2012

For more information and tripping, please contact me!