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How to Make Money in Real Estate

House and Lot For Sale - Real Estate Investment Trusts

Real estate in the Philippines is one of the country’s thriving sectors. Despite the inconsistencies in the real estate market, the pandemic that led many sellers to withdraw their listings, and interest rates hitting a record low, Filipinos continue to find a profession in this business advantageous and rewarding.

WHAT IS REAL ESTATE

A real estate property includes land as well as anything permanently related to it, such as water, trees, minerals, buildings, dwellings, fences, bridges, and anything else, man-made or natural. Real estate varies from personal property or items that are not permanently tied to lands, such as automobiles, equipment, furniture, and electronics, in that it is a type of real property.

We are frequently confused as to whether land, real property, and real estate are synonymous. Land and real property may appear to be the same as real estate, but they are not. The term “land” refers to the earth’s surface from the poles to the airspace above. Real property refers to the interests, advantages, and rights that come with owning real estate. Real estate, on the other hand, consists of land and anything permanently linked to it, such as a house or building.

TYPES OF REAL ESTATE INVESTMENT

There are four common types of real estate- industrial, commercial, land, and residential.

Industrial Real Estate

Industrial real estate refers to properties that are associated to and utilized in the development, manufacturing, distribution, storage, research, or production of goods and products. We are frequently perplexed as to whether land, real property, and real estate are synonymous. Land and real property may appear to be the same as real estate, but they are not. The term “land” refers to the earth’s surface from the poles to the airspace above. Real property refers to the interests, advantages, and rights that come with owning real estate. Real estate, on the other hand, consists of land and anything permanently linked to it, such as a house or building.

Commercial Real Estate

Commercial real estate refers to properties that are utilized by enterprises to create profit, capital gains,  or rental revenue.

When dealing with multilevel structures that serve as tenant dwellings, the distinction between residential and commercial real estate is sometimes blurred. A residential real estate structure is meant for residential use and not for commercial use, whereas commercial real estate is intended for commercial use. The landlord considers the multi-level property to be commercial real estate since it generates rental money for him.

Real Estate for Residential Use

Residential Real Estate refers to properties planned and constructed for residential use, ranging from bungalows to townhouses, and from the lowest slum to the wealthiest suburban development and community.

Residential real estate is regarded as one of the finest financial investments since its value seldom falls. Some people acquire real estate to sell or lease it, but most people buy it to have a home that they can call their own and live in.

Land

A lot or land is a parcel of property held or intended to be owned by someone in real estate. It is available in a variety of sizes and forms, with specified boundaries or borders that are registered on property titles.

The land is a significant financial resource because its price never falls, it may be utilized for agriculture, or it contains natural resources such as oil and gas.

WHY CONSIDER REAL ESTATE INVESTING AND CAREER

If you are looking for an investment that will provide stable returns with long-term capital growth, real estate may be the perfect option.

Financial Security

Most real estate salespeople, whether brokers or agents are given a consistent monthly salary or income if they work for a real estate business. Aside from that, they are eligible for commissions once a deal is closed. Normally, a real estate agent’s commission per sale can range from 3% to 5% if they work for a real estate business, while those who are not linked and operate as freelancers can earn up to 5%. Brokers, on the other hand, can earn up to a 6% commission when a deal is completed. For example, if an agent closed on a property for Php 2,500,000, his compensation would be 3% of the purchase price, or around Php 75,000 minus tax.

Networking

In the real estate profession, you will come into contact with, meet, and connect with individuals from all walks of life. Working in the sales side of this sector necessitates the salesperson to develop rapport with their customer and learn more about them in order to supply them with the property that they want or desire. Aside from that, pleased homebuyers might refer or refer new clients to their agents, allowing an agent or broker to build and expand a network of potential purchasers.

Anyone Can Work as a Real Estate Agent

Whether you finish college or not, you can become a real estate agent or broker if you are a Filipino citizen, have a two-year residency or have completed 72 units in college, have a good moral character, and have not committed any crime involving turpitude, and have undergone training and seminar of at least twelve credit units in real estate brokerage.

READ ALSO: How to Become a Licensed Real Estate Agent and Broker in the Philippines

Real Estate has a monetary worth at all times

Having a property or a house has monetary worth that increases with time. The monetary worth of a property can be affected by variables such as location, local zoning restrictions, and inflation policies. Its value rises quicker in growing areas or in places near commercial centers, business districts, and tourist attractions.

A two-story townhouse in Metro Manila now costs between Php 2,500,000 and Php 3,500,000, while a 66 square meter home and lot for sale in Camella Sorrento, Pampanga costs approximately Php 2,119,998 and a pre-selling house and lot property in Camella Candon costs around Php 2,065,000.

Real Estate has the potential to generate income

The most popular technique to create revenue from real estate or a house is to either share it with someone or rent or lease it out. Tenants are continually looking for new areas to reside, especially in commercial or business districts such as Ortigas, BGC Taguig, and Makati. If you own a house or property in these locations, or in places near malls and tourist attractions, you have a great potential to earn passive money by either enabling bed spacers or transients to stay in your home, or by renting or leasing your house or property.

If you are not comfortable with long-term rentals and leases, you may transform your home into a temporary utopia for either pleasure or business travelers by becoming an Airbnb host.

You may also convert your home into co-working spaces. Before the epidemic and following the Telecommuting Act, co-working spaces have grown in popularity throughout Metro Manila. Converting a house or a room in your house into a co-working space with a fast internet connection, comfy tables and chairs, a pleasant environment, free coffee, and a smoking area may give a quiet place to work or study for freelancers, students, and entrepreneurs.

Real Estate can be converted in cash in the future

There are two main methods for converting a house or property to cash: hold and sell and fix and flip

Hold and Sell is a long-term real estate investment strategy in which a real estate investor  purchases  an investment property, such as land or a house, with the intention of holding the asset for an  extended period of time.

House flippers, on the other hand, search for undervalued homes or houses that need to be renovated, renovate the home, and sell it for a profit that is either two or three-folds the price they bought the house.

Low risk, high return

Risks are inherent in all investments, but real estate is often regarded as one of the safest. Market fluctuations have little effect on real estate investments. As a result, the value of a particular property will only increase with time. Plus, the longer you own real estate here, the more money you’ll make! As a result, real estate is a dependable source of cash for future investments.

WHO CAN START A CAREER OR BECOME A REAL ESTATE INVESTOR

Anyone can start a career or invest in real estate.

Becoming a real estate salesperson is achievable, whether you finish college or not, you can be a real estate agent or broker as long as you are a Filipino citizen, had a two-year residency or had finished 72 units in college, have a good moral character and did not commit any crime involving turpitude and have undergone training and seminar of at least twelve credit units in real estate brokerage.

On the otherhand, you can invest in real estate properties as long as you have the capacity or can be approved by financial institutions to have one.

HOW TO CREATE MONEY WITH REAL ESTATE

There is an incredible amount of money to be made in real estate, but it just takes the right strategy and knowledge.

Make it accessible for rent or lease, as well as for bedspace.

The most popular technique to create revenue from real estate or a house is to either share it with someone or rent or lease it out. Tenants are continually looking for new areas to reside, especially in commercial or business districts such as Ortigas, BGC Taguig, and Makati. If you own a house or property in these locations, or in places near malls and tourist attractions, you have a great potential to earn passive money by either enabling bed spacers or transients to stay in your home, or by renting or leasing your house or property.

Turn it to a vacation house

If you are not comfortable with long-term rents and leases, you can turn your house into temporary heaven for either traveler who are either on a trip for leisure and work by becoming an Airbnb host.

As hotels and Apartelle (also known as an Apartment-Hotel or Serviced Apartment which combine the best service and quality of a hotelwith the freedom and space of apartment living) is getting more expensive, travelers are on the lookout for cheaper places to stay, and that’s where Airbnb listing became popular, not just in the Philippines but in some other countries.

Many Filipino homeowners and real estate investors, especially those living near business or commercial districts and travel hot spots in the country, converted their spare homes to vacation houses with the basic requirements of travelers and listed them on Airbnb.

Airbnb hosts oversee their own property as they can set their own prices, the number of days and guests that are allowed to stay in their house or place and set the ground rules on how travelers should use their amenities.

Co-working space

Before the pandemic and following the Telecommuting Act, co-working spaces have grown in popularity throughout Metro Manila. Converting a house or a room in your house into a co-working space with a fast internet connection, comfy tables and chairs, a pleasant atmosphere, free coffee, and a smoking area may give freelancers, students, and entrepreneurs with a quiet place to work or study.

For home and studio filming

Another way for your property to provide a service and generate income is to suggest or propose it to various scouting managers or to allow professionals such as filmmakers and photographers to rent it as a studio or for home filming, especially if it is in a secluded area, near a tourist destination, or on a busy street or subdivision where soap operas and local films are usually shot.

Parking space

With the DILG’s No Garage, No Car policy. Some towns and municipalities encourage property owners with spare spots to convert them to parking spaces in order to serve individuals who own automobiles but lack a garage.

This also applies to homeowners who live near shopping malls, restaurants, cafés, and churches and have spare spots that can be transformed into parking spaces for rent.

Can be used in Businesses

A property may also be utilized as an operating asset since it can be used in the day-to-day operation of a company or business to produce and develop money or resources from the primary business initiatives or projects of the firm. How?

The majority of successful and multibillion-dollar firms and corporations began at home. Home companies are sometimes considered as a side pastime where you may earn some additional income, but persistent entrepreneurs see beginning and running a business from home as a benefit since they can use a readily available asset rather than paying for and renting a property.

Turning your open areas or properties into a garden and selling the goods online or in your community is another option to leverage your land as an operational asset. This can save you money on groceries while also providing additional revenue for you and your family.

Depending on where you live and the size of your open area, you may set up a tiny organic farm with organic products such as vegetables and fruits, or a garden to nurture flowers, succulents, and plants popular among plantitas and plantitos. You might sell vegetables, fruits, and plants not just to your neighbors, but also to other merchants.

Hold and Sell

Hold and Sell is a long-term real estate investment strategy where a real estate investor buys an investment property, which is either land or house, with the intent to hold the asset for the considerable future.

House and Lot For Sale - Home Buying Journey

Fix and Flip

In this strategy, house flippers search for undervalued homes or houses that need to be renovated, renovate the home, and sell it for a profit that is either two or three-folds the price they bought the house.