Comments on: I Have Seen The Light…

By: Nowell

Nowell — Tue, 21 Oct 2008 01:32:08 +0000

Hi MM,

Very informative. just confused on compounding interest. how do you compute that? example on 5000 savings per month in 30yrs you get 11m…. thank you in advance MM :)

By: Grace

Grace — Sun, 19 Oct 2008 20:21:37 +0000

Sorry for posting 3 times in a row.I was just browsing thru your replies catching up, as i normally visit the food and recipes that you post more often. I’ve learned so much from this topic, infact I’M SO THANKFUL as this can be a great tool for us. I gathered that you gave another interesting example for real estate investments that didn’t turn out well. I too have heard of someone who bought Pacific Plaza at 16M from its original price of 25M. I guess it pays to study your investment very well before buying it. After reading the analysis that you did i’d like to be called fried-neurons as well! Just kidding :-) but seriously, if you really are trained to do the math and you’ve seen rental trend in your area(especially if its located in a developed area), I would say that it is indeed better to rent and invest your other money in a more lucrative investment. That is if you are like MM who’s an investment banker or atleast have a good cosultant . As I see it real estate is best for some people because they just have to find a GOOD LOCATION and a GOOD DEVELOPER and wait for it to appreciate. That’s why its a good thing you post another topic on how stock market can easily be understood this will give people an option on what they really need..

By: Grace

Grace — Sun, 19 Oct 2008 19:19:31 +0000

To your reader Canadian Man, i can recommend him to some of the broker’s that i know he can probably just choose who among them and if he wanted a project from our company then he can email me :-)

By: Grace

Grace — Sun, 19 Oct 2008 19:06:45 +0000

I'm surprised you did a great job here (as always) by helping so many people and yes the company that i worked for really did a great job in terms of real estate development but you're absolutely right (with the alabang development) that's why their greatest project to date is still Forbes Park (and ofcourse makati). As to those balikbayan's if you really have the need to buy a condo for you have a place to stay whenever you visit manila i suggest you go for a condotel type of development. It is best if you want it for investment as well:-) I used to work with a developer who successfully run a condotel in the south and the owners are very happy with the income since their hotel is fully booked most of the time as there are limited no. of hotels in the area. Bottom line, it is still best to buy a property (for investment) with a good location. For personal use it will always be comfort and accessibility to the things that are important to you :-) You may drop by at my site and pm me if you have some questions about properties i'll be glad to help you.

By: Jun

Jun — Thu, 16 Oct 2008 01:59:23 +0000

Hi MM,

Cool so you are very familiar with Singapore and thanks for the advice. Actually when I think about it deeper what are we going to achieve if I sell the house now. Probably be able to upgrade in a bigger house once the market price drop further and $100k richer but again I have to pay higher on amortization. Currently I only pay about 10% of our household income on the amortization. If I rent I will still pay the same amount or if I upgrade I will pay about 20% of our household income. Will it change our life dramatically? Not really I will still need to work till I have enough on my retirement nest.

But should I wait for my retirement?. Like you I have the courage to go back in 1998 in Manila to try our luck in food business but we got burn and lost our savings. Me and my wife still have that passion for food and we are thinking of starting something again. This time we will be wiser I will continue to work :) while my wife manage the business. This time our objective is to satisfy our passion to share good food not merely to profit from it. I’ll keep u posted ;)

By: Marketman

Marketman — Wed, 15 Oct 2008 10:20:00 +0000

Jun, you probably live in Singapore or a place like that, I lived there too for a few years, though I worked for an international company, and wasn’t part of the local provident fund system. Actually, in that sense, I like the way Singapore FORCES people to save and it is generally a good bet to have real estate in Singapore as a small island nation with great fundamentals will typically result in a fairly good real estate market over time… Please consider your moves carefully and not only base it on this post… conditions vary from market to market and with different local rules and taxes…

By: Jun

Jun — Wed, 15 Oct 2008 10:09:05 +0000

I bought a house in 2005 for about $300k and I’m paying a monthly amortization of about $1.4k now. The current rental today is about $1.9k and projected to fall to probably $1.5k in a year time due to economic condition. If I sell my house now I will gain about $100k as the market price is still high for the low end property in the country that I’m living now. I am contemplating to sell it now after reading your posting and probably take the money to invest somewhere else and use it again to buy another house later on when the housing price hit the bottom. BTW here in the country that I stay with 30% of our salary are automatically taken out by the Gov to put in a provident fund where certain amount can be use for housing, investment, education, retirement and medical. This is the reason why almost 90% of family here own their house.

By: Marketman

Marketman — Wed, 15 Oct 2008 04:35:44 +0000

Hi Atoniette, of course, go with your gut feel. But from my perspective, I can say this. Pag-ibig loans at 6% are VERY cheap compared to a commercial loan at say 12-14% so that already makes the deal better than most. But don’t forget to look at maintenance costs, taxes, etc. as part of your analysis. At PHP5 million, the home shouldn’t be in a low cost subdivision… and renting is much more flexible…owning is a major commitment…

By: Antoniette

Antoniette — Wed, 15 Oct 2008 03:27:44 +0000

Hello MM,

The huge amounts and financial terminologies seemed intimidating. I am just a regular employee and makes less than P20000 a month. but i just need to ask you this…because i am not financially savvy, and I am in a bind.
we have been renting for the past 5 years and lucky for me, my landlady had not increased the rent since we lived in it. my hubby wants to buy a house, but since we do not have enough money to buy it outright, we are thinking of getting it through Pag-ibig. I am in mindanao where land is still cheap and properties in good locations can sell for an average of 5 million with 300 to 500 square meters of land. Pag-ibig offers an annual interest of 6% and it takes 20 to 30 years to pay, of course the house would be in a low-cost subdivision with an average lot area of 120 square meters. With monthly amortizations of say P4000, i would end up paying for a house and lot 3x more than its value. at present my rent is just P2000… i know it is very cheap and I am really fortunate, newer apartments here rents for P4000, townhouses at P10000. and i live walking distance from my work so i don’t spend money on fare. my instincts tells me that the low-cost housing loan is not a good idea just by looking at the numbers. am i right? i am also not that keen on buying a house…renting seems to be more practical.

By: zel

zel — Tue, 14 Oct 2008 09:13:18 +0000

Hi,

This is really a great post. We are currently paying for a condo and moving in by April next year. At least now we still have time to think about it & do the math. Thanks for posting this.