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You do not need to have millions to be an investor

You do not need to have millions to be an investor

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Most people usually associate the term “Investor” only to the very rich and highly educated individuals. The word alone either intimidates them or bores them when it is being presented. Thanks to the creativity of entrepreneurs, finance companies, networking groups, insurance companies, and real estate developers, but definitely no thanks to scammers and pyramid scheme opportunists.

While I have tried and positioned a little in everything I have mentioned above, my favorite is still real estate. This is what I know and what I do best. This is the field where I have full confidence to give advice to the first-timers as well as the veteran astute investors.

It took me quite a while to convince myself to start investing in real estate when I was younger. First, just like most people, I had the mindset of just saving enough to buy a property in cash because “ayoko ng may utang”. Well, this may apply to a few who are already awash with cash, but for people like me, it was just a convenient excuse for why I don’t have any properties yet. Later on, in my career, I realized that it is almost impossible to save enough for a property that you want to buy especially if you are just relying on a single-source fixed income. The appreciation of the property that you had your eyes on will always outpace the rate of your savings. Secondly, the price and terms during the early 90’s when we just came out of one of the worst economic crisis that the Philippines has ever experienced, were designed only for the very rich. The most common payment term then was 30% Downpayment payable just 30 days after the Reservation deposit and the full balance to be amortized within 24 months only. Third, as a young, fresh graduate and single real estate salesman making a quite lot more than some senior managers of big companies then, with no one mentoring me about savings and investments, excited with several new credit cards, I was already spending my commissions even before they were released. Things changed only when I have decided to get married and started to have some direction in my life.

YOU, yes you, are very fortunate right now. Prices may be extremely higher than what it was many years ago but that is something that everybody says every single year. What you do not realize that you have now is a lot of options. There are so many projects to choose from based on your investment objectives, whether for personal use, capital gains or to generate passive income from rentals. Banks are friendlier now and the interest rates have been stable for the past 10 years. Payment terms of most developers are so affordable that you can actually use it to your advantage and invest in several projects without presently having millions in your bank account.

If you will only seek unbiased professional advice on which project to invest in, and be assessed properly on your financial capacity to pay your monthly amortizations, you will only need minimal cash out over a certain period and let your rental income pay for the unit itself. You may even enjoy a very good return on the actual money that you invested. This strategy was quite challenging before, especially if you couldn’t find a tenant to lease your unit on a long term basis.  But times have changed and there are quite a good number of professional property managers who can handle your unit and lease it for short-term stays which commands even better rates compared to the usual long term leases. Furthermore, there are also other developers that offer to lease back your unit and join it in a pool so that you can enjoy rental income whether your unit is occupied or not. Now, the critical part here is in the selection of project, developer, operator, and location. This is where you will need professional advice.

Personally, my goal is to accumulate several units while I still can and with minimal cashout. Some of the units I got were already fully paid while some are still paying for themselves through the rental income I get. They should all be fully paid by the time I retire and I can already use the full rental income I get for my retirement. The best thing about it is that I still have something to leave for my children. 

Editor’s note:

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