BY KAYE ESTOISTA KOO
ILLUSTRATIONS BY JASRELLE SERRANO
The simple premise is: everyone wants to live nearby.
As Franklin Delano Roosevelt famously said, “Real estate cannot be lost or stolen, nor can it be carried away. Purchased with common sense, paid for in full, and managed with reasonable care, it is about the safest investment in the world.”
When you own a plum space and you lease it to a well-paying tenant, the money that comes in is essentially one of the smartest, most cost-effective ways to grow your resources. Real estate is coveted as one of those lasting, tangible assets that, whenever possible, any responsible adult should aspire to have.
“Real estate cannot be lost or stolen, nor can it be carried away. Purchased with common sense, paid for in full, and managed with reasonable care, it is about the safest investment in the world.” –Franklin D. Roosevelt
Even the most expensive technological innovation loses its value the moment it leaves the store. Real estate on the other hand, has an excellent resale value, something investor and multi-billionaire John Paulson calls, “a keystone of wealth, both financial affluence and emotional security.”
Real estate, like jewelry, only becomes more valuable over a period of time. Commercial growth around residential land (or vice versa) can profoundly affect its value, like if a new train station, airport terminal, or even flyover is established nearby. Cerilo NUVALI, for example, offers a well-rounded lifestyle with its residences and commercial hub and easy accessibility from Metro Manila. The residential developments in the immediate vicinity immediately multiply their premium exponentially because of the new transportation access to the area.
But first, let’s address the quintessential elephant in the room. When should you invest in real estate? Should you begin to invest when you can afford it? The answer is yes. The ideal scenario is for you to invest in a piece of real estate that you will eventually establish as your primary residence and then, if possible, get another real estate property nearby (duplexes in townhomes or several units in condominiums) so that you can start rolling money around. By having tenants lease your secondary investments, you are helping your properties pay for themselves.
Secondly, the fact that real estate appreciates in value should automatically make you want to consider it. Getting your property appraised on a regular basis helps you gauge exactly how much you can make from it, should you divest. Properties bought on a pre-selling deal, for example, are computed at a certain value, but once they get turned over, their market value go up.
“Ninety percent of all millionaires become so through owning real estate. –Andrew Carnegie
Thirdly, real estate is an investment that keeps giving back. It could be financially, meaning, your tenants who take on long-term lease agreements with you, can become a source of income. Imagine owning property in Arbor Lanes ARCA in Taguig. Cubicle dwellers in nearby BGC are always looking to skip the traffic jams and stay nearby. It’s an intriguing passive setup.
Putting your property on a short-term rental basis by converting it into an Airbnb listing also helps the property pay for itself. If you have the scenic views of Greenfield Estates in Laguna, it’ll be easy to lease a vacation lifestyle (while still keeping it available for yourself should you require a little R&R away from the city). Or, when you need to establish ties to the country, having real estate in your name is excellent proof that you intend to stay in your home country.
Andrew Carnegie, businessman and philanthropist, said it best, “Ninety percent of all millionaires become so through owning real estate. More money has been made in real estate than in all industrial investments combined. The wise young man or wage earner of today invests his money in real estate.”
And later on, when your children want to leave the nest, but choose to study in schools in the metro, having an extra unit on hand, which they can turn their condo and housing, is pretty convenient.
Ultimately, investing in real estate helps keep you grounded, especially if there are monthly amortizations and regular payments to be upheld. But once you’ve paid it up, as John D. Rockefeller said, “The major fortunes in America have been made in land.”