In today’s market, investing has been a significant demand to the society mainly because of the pervasive relevance of Covid-19 to the livelihood of everyone. No one expected that this situation will take place, however we are all aware that we need to secure our future from these unforeseen events. Most of us are consuming time surfing through internet and setting up meetings with different financial advisors just to ask for guidance on how to have triumphant investment but in order to achieve that, you need to take the risks and turn failures into lessons. There are a lot of investment varieties, one of which are mutual funds, stocks and bonds however, there are still other avenues that can also be rewarding in the long run such as investing in landholdings. Real estate investment is a financial strategy that make use of rental, ownership and selling of property with the aim of profit, this could also be the best lucrative way for your retirement plan. Even though real estate is ideal for investment, it takes a lot of dedication, research and planning to become more profitable. Many of investors uses this famous formula in order to maximize the profit potential of an asset or property and they call it the “1% rule”.
What is 1% rule in real estate investment? 1% rule is a long-known guideline or strategy for investors in which they use for them to calculate if a property is worth buying. Most of the real estate investors used this technique to strategize if that certain property will produce enough cash returns to cover its respective mortgage. It helps to determine if the rental income from a piece of investment property will surpass the monthly mortgage payment of that property. However, the 1% rule does not apply to every situation since it will not give you the exact answer or computation but rather a quick estimation only. It only gives the investors an idea of what to expect or what will be the potential income of that property since the formula does not take into account additional costs such as upkeep, insurances and taxes. How does 1% work in real estate investment? This formula comes with a simple calculation, you just need to multiply the purchase price of the real estate property by one percent and the result will determine the base level of monthly rent. Once they come up with the result, that will be the investor’s basis on how much to charge for the rental income in order to cover up the potential monthly mortgage payment and give the owner of the property a better understanding of the property’s cash flow. Let as set this for an example, there is an investor is in the marketplace looking for properties that he can used for rental income and after some careful research, the investor decided to buy a property amounting to PhP 555,000. However, the investor plans to rent the property and wanted to make sure if he will benefit from it and that is where the 1% rule comes in. From the PhP 555,000 multiplied by 1% which will result to PhP 5,550 and as the product, the investor would need to find a mortgage loan with a monthly payment of less than and absolutely no more than PhP 5,550 if they wish to have profit monthly. When to use the 1% rule in real estate investment? The 1% rule formula is used before the purchase of the property since investors wish to determine how much they would need to rent the real estate asset and expect risks to come. It is designed for those investors that desire passive income. If you are one of the investors that wanted assurance of their money and wish to understand more if the property will really give them the best cash return then yes, this is the best strategy for you. When not to use 1% rule in real estate investment? Again, 1% rule will only give you a result of estimation, so if you are looking for an exact answers then this rule is not the best for you to use. In this formula, other costs like upkeep, insurances and taxes are excluded that is why it will only give you an idea of the monthly rent. Is 1% rule in real estate investment profitable or not? The rule is commonly used by well-informed real estate investors and has actually gained success from it. It is very popular that it is consider as ‘proven and tested’ technique in the real estate world. A very much example of where to use this famous rule is in Bria Homes, investors can really gain much profit from purchasing a unit in Bria Homes since the monthly amortization is lower than its base level. Investors has a wide-range options of house and lot where they can choose according to their needs in home. Bria Homes is the most suitable choice for normal Filipino workers and OFWs who desire to invest in a home of high, reputable quality that is also relatively inexpensive. For as low as PhP 1, 897.00 per month, any Filipino can purchase his dream Bria house, which is perfect for those who are not yet as financially established. Bria’s house and lot packages can range from Php 460,000 to Php 1.5M while its condo units range from Php 1.5M to Php 3M. Truth be told, any Filipino will find it difficult to score or land cheaper deals that those offered by Bria Homes. Summary Overall, investing in real estate can be lucrative for long-term investors. The one percent rule is no more than a simple multiplication problem thus it helps investor to decide whether or not a deal is worth pursuing. As a result, this particular strategy is yet another tool for investors to mitigate risk and tip the scales in their favor. Again, it takes a lot of dedication, research and planning when investing in real estate that is why there are a lot of strategies, formula or techniques when it comes to real estate investment. However, when the time comes that you already are a successful investor, then you can say that those risks are worth it.
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Have you heard of the hit Netflix show “Tidying Up with Marie Kondo”? A series where tidying expert Marie Kondo helps people declutter and organize their homes. In case you haven’t, let me introduce you to the concept of decluttering. By definition, decluttering is the removal of unnecessary items from an untidy or overcrowded place. The concept of decluttering has been very popular lately all thanks to Marie Kondo’s book entitled “The Life-changing Magic of Tidying Up: The Japanese Art of Decluttering and Organizing”, in which she referred to decluttering as the process of getting rid of things that “does not spark joy”.
There are many ways to declutter but given the current global pandemic, now more than ever, we find ourselves spending more and more time in the confines of our homes. Which is why in this article, I listed down 10 benefits of decluttering your home. SAVE TIME, MONEY & ENERGY One of the benefits of decluttering your home is spending less time and energy cleaning and dealing with your belongings. On average, a person spends two and half hours cleaning a two-bedroom house. So instead of spending hours tidying up during the weekend or on your day off, decluttering your home gives you extra time and energy to spend on something else. In addition, decluttering also saves you money. It prevents buying duplicates or making frivolous purchases. Having cluttered home sometimes blinds you to what you already have, because you either can’t find or remember what you already own. You can save a lot of time, money & energy if you raise your standards of what is good enough to occupy space in your home. EASIER TO CLEAN AND TIDY Keeping your home clean and tidy is a very demanding task to do. From vacuuming to dusting—it will be a lot easier when there aren’t too many things sitting around that needs to be picked up or moved. The lesser clutter, the easier to clean. Decluttering is a great chance to get rid of the things that you do not need and no longer use, it is also a great time to re-organize your home. Owning less does not necessarily mean having a perfectly neat and tidy place all the time. Your home can still get messy, but it is a lot easier to fix. REDUCE STRESS AND ANXIETY Most of the time, having a lot of unnecessary things around can be overwhelming. And when these things get out of hand, it breeds stress and anxiety. A cluttered home equates to a cluttered mind. As psychologist Sherrie Bourg Carter explains in Psychology Today, “Messy homes and workspaces leave us feeling anxious, helpless, and overwhelmed.” There are many studies that show having excess clutter in your home increases your cortisol levels which is the stress hormone in your body. By getting rid of the clutter, you are actually getting rid of stress. So, if you find yourself feeling stress and anxious in your home you should definitely give decluttering a try. It is a useful tool that will help you relieve stress and anxiety by creating physical and mental space. INCREASE CONCENTRATION AND PRODUCTIVITY Decluttering boosts your concentration and productivity level. Being surrounded by clutter at all times makes it difficult for most people to concentrate. Having excess things surrounding you distracts your mind, and it negatively affects your ability to focus and pay attention on what you are doing, therefore it decreases your productivity. For instance, studying or working in a messy and disorganize space makes it hard to focus on the task at hand. By removing the clutter, it takes away the distraction and help you concentrate and be more productive. LOCATE ITEMS EASILY Have you ever run late for work because you can’t find your car keys? You’ve looked everywhere—under the sofa, beside your bed and even inside the fridge? You’ve looked everywhere but you still could not find it. Perhaps you’ve got too much stuff around that nothing in your home had a specific place that it belonged. You would be surprised at the amount of time you spent looking for your misplaced belongings. Having a decluttered home will help your day-to-day routines go smoothly as it will be a lot easier to find items. When your place is well organized and not too crowded with stuff you would know exactly where to locate your belongings. No more wasting time looking for things and never knowing where to find them. GAIN MORE LIVING SPACE Having a cluttered place makes your home look and feel a lot smaller than it actually is. If you do not have excess stuff sitting around, you would have more living space to use and enjoy. Decluttering can maximize and transform your home. Try looking around your house and go through all your belongings, decide whether to keep or dispose them. Clearing up your clutter will give you much more extra space to use in your home. Sometimes, having less is more. MAKE MONEY OUT OF DECLUTTERING Not only can decluttering help you save money, but it can also help you make money. When you declutter your home, you can find valuable things that you no longer need or use which you could then sell for cash. Sometimes, the things you consider worthless may be considered valuable by someone else. As they say, one person’s clutter is another person’s treasure. So, if you have some items that you want to get rid of, try selling them online on Facebook Marketplace or you can even have a garage sale if you have several more items that you want to dispose. IMPROVE SLEEP Have you ever woken up feeling tired? A study showed a direct correlation between high levels of clutter and poor sleep quality. It turns out that reducing clutter in your sleeping environment improves the quality of your sleep. Your bedroom is your sanctuary. It is where you are most comfortable and most at ease. Having a cluttered room causes stress and stress in return causes restless sleep. If your room is crowded with things your brain mentally processes the external stimuli of all the clutter resulting to a poor and disrupted sleep cycle which could lead to insomnia or over-sleeping. LOOK FORWARD TO COMING HOME Your home is your safe haven and your comfort zone, it is where you rest and relax after a long day from work or school. But what if a huge pile of clutter is waiting for you at home? When you know that there isn’t a bunch of clutter, chores, or things to do waiting for you when you get home, you literally look forward to coming home every day. It can totally change your perspective and how you feel when you are entering your house. A HAPPIER OUTLOOK IN LIFE Decluttering can transform not only your home but your life as well. Some say that clutter signals that you do not have control over your life. When clutter gets unmanageable it starts to take a toll on both your physical and mental well-being. It has a negative impact on your physical and mental health as it causes unwanted stress and anxiety. Decluttering can improve your emotional outlook in life, it is a way of achieving happiness. Just like exercising, decluttering releases a hormone called endorphins which helps in dealing with stress and reducing feelings of pain, by doing so it makes people feel emotionally and physically better. That is why the less clutter the happier you become. Most Filipinos think that OFWs earn big money and live in luxury, but they don't know the sacrifices they make for their family. Sometimes they do not earn enough for themselves and their family. They will prioritize their family's needs instead of their own to give them a good life.
OFWs are now considered modern-day heroes because of their hardships and their contributions to our country's economy. They have many tribulations to go through and challenges to face. Everything our dear OFWs do is not easy — every adventure always comes with hardships and trials. But for the sake of their families, they continue to work hard. For OFWs, not only money is important to them, but also time. If only they can do more than one work at a time to earn enough or more. But there is a way to earn extra income without spending a lot of time. It is called passive income. Passive income is money you earn without too much extensive effort. You can earn extra income while doing your primary job or you’re just in your room doing nothing. It is like making money while you sleep. In other words, passive income is one of the best ways to improve your financial situation. There are many ways to make passive income, and one of them is to invest in house and lot in the Philippines. OFWs can buy house and lot and earn passive income. While earning abroad, they're also earning in the Philippines. House and lot investing is not just an asset, but an investment too because it’s a safe place to put your money, and home values generally increase over time. WAYS TO MAKE PASSIVE INCOME WITH YOUR HOUSE AND LOT:
On the other hand, reselling means the investor sells a property that he previously owned at a price that is larger than its original cost. With a few touch-ups, he can enlist his property at a higher price, since he is reselling a product that is an improved version of its former self.
Buying a rental property depends on the location. It is a good idea to research a good area for your rental property because good tenants are usually looking for a house near to their employment, as well as high schools, universities, shopping malls, grocery stores, restaurants, and community parks.
One example of short-term rental or vacation rental is Airbnb. Many people are looking for a house or unit that can be rented for a day or a week. Tourist destinations and popular business trips locations have a higher occupancy rate for Airbnb rentals. Short-term rentals have gained momentum in recent years as their flexibility allows travelers to rent anywhere from a few days to a few months. Short-term rentals, also called vacation rentals, are typically furnished apartments, condos, or houses where renters can feel more at home. Short-term rentals can be more appealing than hotels because of the prices, furnishings, and amount of space they can often provide.
REIT allows anyone to own shares of real estate properties such as house and lot, rent to own homes, housing developments, and other big properties without actually having to go out and buy, manage or finance a property. REIT is good for long-term investing. Most of the income goes back to investors. The company may likewise take time to grow because it has less money in acquiring new assets. Also, it can be an option for those who are looking to diversify their portfolio as it provides a way of exposure to the real estate industry. Indeed, it can give recurring income on a long-term basis. OFWs can enter the real estate market with minimum capital. The promise or hope of a lucrative return of investment is still there despite the low barrier to entry, as some REITs offer regular dividend income aside from income by way of normal stock gains.
The secret to earning more profit in house flipping is buying a unit that is below market value. If you cannot do this, chances are you would not even make a noticeable income. Before immersing yourself in house flipping, make sure that you consult a real estate agent who is very knowledgeable about the potential of the houses that you seek to flip for profit. Bria Home is truly the best choice to invest house and lot. It offers affordable yet high-quality houses for ordinary Filipinos- from OFWs to local workers. Bria takes pride in its affordable, high-quality houses and fast construction. All Bria communities are near major roads and highways. They are also within proximity of places- schools, churches, shopping malls, and hospitals. It is time to invest in a home for you and your family. |
AuthorA real estate marketer in Philippines. Archives
October 2021
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