Mortgage Retention Insurance: What you should know about this

Photo Credits

Have you wondered what does Mortgage Retention Insurance (MRI) is for when you are paying to your respective lending institutions like Home Mutual Development Fund (PAG-IBIG) or at commercial banks or private lending companies? Sometimes, the licensed real estate agent professionals might have missed out to discuss to you about these about this type of insurance included in your other charges or they might have discussed this to you but you have forgotten about it or still figuring out the charges on your computations.

PERSONAL FINANCE 102: WHERE TO PUT YOUR MONEY

Courtesy of Freedigitalphotos.net

The economy is turning good and the Philippines is still on the investment radar of most international companies and venture capitalist. With this in place, local businesses and small investors are also joining up the bandwagon. Most folks are enjoying their profit in the recent Philippine Stock Exchange boom and it is hitting at 7000 mark last August of this year. 

Although, our government forecast has lowered it to 6.5 - 7% growth on Gross Domestic Product (GDP) with previous forecast of 7.3% for the full year by National Economic Development Authority (NEDA) brought about by the recent natural disasters and uneventful situations. 

People are asking me a lot of questions on where to invest their hard earned money this year and beyond? How much to invest? How much can recover and get their return of income (ROI)?  For me it is an unending process of teaching and advising on where to invest. It depends on their objectives or personal goals in life, their risk appetite and portfolio of investments and financial instruments they intend to create with. 

As a registered financial planner, I give them these advices and what options or alternatives they could give them better decisions with a short period to a long term type of investments available and also give the pros and cons of these types of investments. In the end, these would be beneficial for both us client and financial planner with less compromise when building a client’s portfolio.

QUID PRO QUO

Photos courtesy of World Vision Australia

 In the past month, we’ve seen tragedies, conflicts and natural disasters around the country. From the Zamboanga City uprising of the MNLF faction of Nur Misuari to the 7.2 magnitude earthquake that hit hard in Bohol and Cebu and now the Super Typhoon Yolanda (International Name: Haiyan) which affected the almost the entire Visayas region. The internal conflict on Zamboanga crisis can be controlled but natural catastrophes that happened is beyond control of man alone and it seems Mother Nature had brought its wrath upon humanity.

 A few days after Typhoon Yolanda made its landfall, I was totally shocked and awed to see on TV what the extent of damage and devastation had brought in Tacloban City, Guian, East Samar and other nearby towns and cities in Leyte and Samar which are in the direct path of Super Typhoon Yolanda. The damage to property and infrastructures is insurmountably high with estimated cost at around P 10 Billion or more.  Loss of human life as of this writing is almost at 4000 with missing people at 1500. Around 10.3 million people in the Visayas region are displaced and affected with Yolanda’s onslaught according to National Disaster Risk Reduction and Management Council (NDRMMC) estimates. As we can see on media, the survivors are pleading for basic necessities from food, water, hygiene kits including temporary shelters to sleep with and body bags to bury the decomposing bodies of their dead relatives and loved ones.

For many of us fortunate and with the Christmas season coming in a few weeks time, it is better to give and help to them in many ways.

On Buying Your First Home

By: Benedict F. Baluyut, RMT, REB, RFP

Source: Freedigitalphotos.net

"Have you dreamed of acquiring your very own home? Have you imagined, seating on your porch, sipping your morning coffee and reading your newspaper. Seeing your neighbors in the street mowing their lawns or cleaning the front yard? Or just getting ready for morning rush of going to work."

Buying your first real estateresidential property requires tedious and multiprocessing tasks of properly planning and making wise but crucial decisions. Buying a house doesn’t involve you as a breadwinner but involves your wife as a co-maker and a borrower and the whole family as beneficiary in securing your very own home and in the right neighborhood where you can live and flourish.

Protecting against losses

Author: Benedict F. Baluyut

Published at: Monday, September 3, 2012 on Business Mirror

IT has been wet and rainy for a couple of days now and not seeing much sunshine.

A few weeks after the devastation brought about by recent typhoon Helen and monsoon rains (“hanging habagat”) that major portions of the Luzon area and Metro Manila were severely affected. People are slowly recovering from the recent disasters that pummeled the island of Luzon and affected the populace. As I remember back then, it has been raining very hard and almost all day. Everything happening on those days was grounded to a halt with floods affecting the flow of traffic, schools and business establishments temporarily closed and people worried on their lives and properties on what to do next and how to get on their previous life on track again.

Floods, typhoons and other disasters

MANY of the known areas where flooded and a great majority of people got stuck in their second floor of their homes or at their rooftops for those living in bungalows. Local government units have mostly declared their municipalities, cities and provinces under state of calamity. These provinces and major cities are located in flood map areas of the country. It was good that the population and the government are prepared from these disasters in which Typhoon Ondoy served as a lesson for most of us and a basis on what things may come in the future with the rapid climate change and destruction, depletion of our natural resources and improper waste segregation and management in which we the ordinary people should be aware of.

Major government and non-government agencies come prepared and gone along way on their risk reduction and disaster management operation in the recent calamities after 2009 with faster response time. There have been some problems encountered during rescue and evacuation but still people living in the flood hazards zone are resilient and instead stay behind on their homes because they have sentimental value of the things they are going to leave behind and were just asking for relief goods other opted to temporarily evacuate on higher grounds or shelters provided by the local government units.

Typhoon Ondoy caused damage to property estimated at P6 billion, including P4.1 billion in damage to infrastructure, P1.9 billion in damage to schools, and P882.525 million in damage to agriculture. Typhoon Helen and the southwest monsoon caused damage of more than P3 billion worth of infrastructure and agricultural loss, according to the National Disaster Risk Reduction and Management Council (NDRRMC) in September 2009 and August 2012 reports.

Our country, the Philippines, is no exception to natural and manmade disasters because it sits on the center path of major tropical storms coming in from the Western Pacific Ocean and more than 20 or so typhoons can come across our archipelago in a year and so the need for Non-life and life insurance is greatly needed in such times of need.

What are non-life insurance and life insurance?

To give you a brief background on life and non-life insurance, non-life insurance is defined as insurance for property and casualty and is specialized on different categories in order to customize the needs of the policyholder.

Many non-life insurance companies can give different package from fortuitous events such Fire insurance to other allied peril insurance such as flood /typhoon, earthquake in which these are specialized insurance products. They can also have extended coverage from burglary, valuable items protection, riot, smoke, and others that are offered from these non-life insurance. Sometimes these non-life insurance providers can also include life insurances package such as hospitalization, personal accident, and personal liability for those who avail this.

Life insurance provides a monetary benefit to a decedent’s family or other designated beneficiary, and may specifically provide for income to an insured person’s family, burial, funeral and other final expenses.

People think that insurance is just a waste of money but in can work a lot of ways of helping the policyholders in which insurance is defined as the equitable transfer of the risk of a loss, from one entity to another, in exchange for payment. Insurance is a form of risk management primarily used to hedge against the risk of a contingent, uncertain loss.

Other types of insurances are crop and livestock insurance (agricultural / aquaculture), motor vehicle insurance, mortgage redemption insurances (real estate) and many others.

Life and non-life Insurance can both work hand in hand and could be a useful tool in protecting yourself against unfortunate events such as what happened a few weeks ago.

In choosing the right Insurances for your needs, the providing company must be registered and abide by the rules and regulation set forth by the Insurance Commission of the Philippines. The Insurance Commission’s mandate is to regulate and supervise the insurance industry in accordance with the provisions of the Insurance Code in order to ensure that adequate insurance protection is available to the public at a fair and reasonable cost and to assure the financial stability of the insurance industry so that all legitimate claims of the insuring public are met promptly and equitably.

For those interested to avail of insurance, you can check out the website of the Insurance Commission if the insurance companies offering you are legitimate and also to better shop around and research first for the ideal insurance products that fits your need before selecting and deciding the right one for you.

Amidst the hardships and anxiety, resiliency and the “bayanihan” spirit still exists

It proves that “The Filipino spirit is waterproof” as what was circulated in the social media networks like Twitter and Facebook two weeks ago. The resiliency and spirit of helping others have been seen among ordinary citizens who are willing to risk their lives for others. The fortunate souls who were not affected were able to give the affected and those in need the help and relief with their unwavering support and gracious hearts.

It was also a time even in these disasters that people of various walks of life affected from this tragedy have high hopes and still learn to smile and be happy in order to cope up with the extremes weather condition we are experiencing and eventually triumph from it.

****

Copyright 2009 - 2012. PinoyMoneyVantage| Personal Finance Help Philippines

The RESA Law, Republic Act 9646: What can it do for the Real Estate Industry in contrast.. Part 2

This is the continuation of the first part published February 2, 2010.

Recently, the RESA law or Republic Act 9646: Philippine Real Estate Service Act of 2009 has gone a long way from being a obscure idea into reality of professionalizing the real estate service industry and expanding the satisfaction and needs of our real estate clients and investors with value added protection unscrupulous entities and individuals. A lot of people say that the law was hastily made but in real sense it was twenty-two (22) years in the making with lots of disapproval's from the previous congress and some real estate developer who do not adhere with the basis of fair and just treatment of the licensed real estate professionals who are abiding with laws and ethics of the realty trade.

Dr. Eduardo G. Ong

Generally speaking, those that were affected are the in-house brokers and agents who have not taken the real estate brokers / appraiser / consultants / assessor licensure examination being given in the past few years with the advent of the new rules governing the examination which was previously given by the Department of Trade Industry - Bureau of Trade Regulations and Consumer Protection to the Professional Regulatory Commission (see article). These affected people will either have to work for a licensed broker in order for them to practice the profession they know and have to apply for a Real Estate Salesman License and must have acquire or education at least second year college or 144 college units in order to qualify as a Real Estate Salesman. Another option is to take up a degree in Bachelor of Real Estate Services or Management Course once proposed curriculum under the technical panel of Commission on Higher Education (CHED)  is approved and to be offered by colleges and universities can offer this course to the public.

Finally, Professional Regulations Commission has appointed Dr. Eduardo G. Ong as the chairman of newly established Professional Regulatory Board of Real Estate Services. Dr. Ong is a broker / consultant and lecturer on business, entrepreneurship and real estate consultancy for more than 25 years. With his experience and knowledge of this, he is well suited for the task of overseeing this newly created board in policing the ranks of the real estate industry. Dr. Ong was made an honorary member of Real Estate Brokers Association of the Philippines (REBAP) last March 25, 2010 during the First Quarter General Membership Meeting and Assembly held at Makati Sports Club in Leviste Street, Salcedo Village, Makati City.

See other related posts:

The RESA Law, Republic Act 9646: What can it do to the for the Real Estate Industry in contrast.. Part 1


Copyright 2009 - 2010. PinoyMoneyVantage| Personal Finance Help Philippines

Aftermath of Disaster: Typhoon Ondoy and Pepeng what we learned from the past

Its been a few months after the tragic event that changed the course of Philippine history last September 26, 2009 as we braced the heavy impact of supertyphoon Ketsana or Ondoy. A lot of people have already recovered but some are still recuperating physically and emotional on the aftermath of this worst disaster that hit us black and blue in just one day.

It was this time during the onslaught of typhoon Ondoy or International name: Typhoon Ketsana kept me awake, I was busy with work that day and at that time venturing out on a cold stormy night would given me spine tingling chills and suicide if you cannot find a public transport your way home

Remembering that fateful whole day and next few days post-Ondoy was not a good picture, People lost their homes, property and even their loved ones on that tragic day. Like those that happened before wherein the typhoons brought havoc in the past and have left a post-traumatic experience for the victims. The physical manifestation may not appear on the hapless victims but can make a lifetime emotional scar in them - this what most psychiatrist say as POST-TRAUMATIC STRESS DISORDER (PTSD).

I still remembered the time when Typhoon Millenyo hit our home in 2006, I myself seen falling debris and roof flying over our head and coconut trunks and leaves flying over the air as the winds blow hard then the heavy downpour of rain with no stopping at all. Have brave on knee deep waters during my high school days when the town or city where I grew up in Pampanga became flooded with high waters plus lahar in nearby areas back in 1995 when the lahar hasn't compacted since Mt. Pinatubo erupted back in June 1991 and I was between the ages of 9 or 10 as I vividly recall up today.

Property Values go down.

Most of the affected areas within Metro Manila and nearby provinces such as Rizal, Laguna are very much affected the recent Felino Palafox, Jr. (Palafox and Associates) said that the Marikina River Valley is not suitable for development wherein it rest at the foothills of the Sierra Madre Mountain ranges so in the case of heavy rains from the nearby the mountains. The waters will subside down to the low lying areas. The water outlet should be flushed out to the Manila Bay and Laguna de Day. However the waterways are blocked with informal settlers and the government haven't done much to put things in order. Although the boom on the economy of the nearby Quezon City is adamant.

Value of Insurance.

I never had a doubt that insurance on certain things will be useful especially if you are covered with force majeure or the so called ACT OF GOD in your life and non-life insurances. As a consumer, we should better check on the policies we received what type coverages that this insurance can give us in case we ran into disasters or emergencies in this uncertain times.

Copyright 2009 - 2010. PinoyMoneyVantage| Personal Finance Help Philippines

Pampanga Real Estate Trend, Guide and Review - The new real estate online resource in Pampanga, Philippines

I am proud to announce that the Pampanga Real Estate Trend, Guide and Review has its new domain - www.pampangarealestatetv.net, on which it will focus on the current updates on the real estate industry in Pampanga, Philippines. It will serve as a resource guide for our fellow Filipino investors especially those who are from Pampanga, Kapampangan OFWs or those who intend to move into this growing province which has transformed from agricultural province devastated by natural calamities like Mt. Pinatubo eruption in 1991 to one of the progressive and agro-industrial hubs in Central Luzon under the Central Luzon "W" Growth Corridor.

This will also feature news, available property for sales, available, current market analysis of properties, economic analysis and growth of cities and towns within the selected areas and other useful researched data for investors to know before putting their hard-earned money into a fruitful investment in years to come.

Forum section is also available wherein it will handled by Real Estate Brokers Association of the Philippines, Inc. - Pampanga Chapter- the network of professionals in the realty trade commited to serve your needs. Click and visit the forum section.




Copyright 2009 - PinoyMoneyVantage| Personal Finance Help Philippines

Fresh Outlook on Philippine Real Estate for 3rd and 4th Quarter 2009

Recently, I made some lectures and slides on my lecture series as a resource speaker of Real Estate Brokers Association of the Philippines - Pampanga Chapter. I was invited to this because of my knowledge and experience in selling with new advancement in technology through internet. The title of the seminar "ABCs of Selling Real Estate Online". Members of our organization where there to see for themselves the new trends in selling real estate in an unconventional ways from the traditional marketing we were brought up with lesser time and efforts with maximum inquiry and closing of sales for the members.

To start off with, the Philippine Real Estate has become a lucrative business in the beginning of early 2000 wherein our country had already recovered from Asian Financial crisis of 1997 that affected most of the rising tiger economies such as Singapore, Malaysia, Thailand, The Philippines and other nation within the Asian economic sphere such as Japan, Taiwan and others.

There is a sudden increase of Overseas Filipino Workers or OFWs in terms of remittance wherein it grew at about US$ 17.4 billion this year from US$ 16.4 billion in 2008. In percentage, there is a growth of 4% according to Goldman and Sachs and Bangko Sentral ng Pilipinas figures.

Demand for real estate has become high with the increase in population growth in our country plus incoming investment of our fellow balikbayans especially Fil-foreigners opting to retire in the Philippines in their prime years. Also, our country has overwhelming housing backlog – wherein estimated there should be 3.75 million homes that still needed to be built.

Even if Real Estate in United States and other western countries have experienced economic decline in the past few years. The Philippine Real Estate’s overview in the future is still bright even it slowed a little bit due to global financial crisis.

The growth of Business Processing Outsource (BPO) in the country also helped promote job generation giving young professionals opportunity to make a living. Recently, the Philippines has won the 2009 Offshoring Destination of the Year Category at the National Outsourcing Association (NOA) Awards held last October 15, 2009 in London, United Kingdom.

Philippine peso and US dollar foreign exchange remains fairly stable at an average of PhP 45.00 to US $ 1.00 as of early December 2009. With the Philippine peso remaining strong compared to the US$ dollar.

Lending Rates in banks still remains low at an average at 9.0% to 12.0 % per annum compared to previous years of around 15% to 21% interest rates p.a. However, PAG-IBIG lending are very low at 6% which is very competitive against bank’s lending rates.

The passing of Republic Act 9646 also known as The Real Estate Service Act of the Philippines (RESA/RESAP law) sponsored by Sen. P. Lacson et al. The passing of Real Estate Investment Trust Bill of 2009 sponsored by Sen. Edgardo Angara

Being optimistic after the recent calamities and catastrophes that happened in the Philippines would not deter us of achieving and aiming our goal as a tiger economy again.

Copyright 2009 - PinoyMoneyVantage| Personal Finance Help Philippines

The 3rd Annual Philippine Real Estate Festival 2009

Video courtesy of: www.rtvm.gov.ph

I was able to attend the Philippine Real Estate Festival last July 23, 2009. It was great to see some of the industry players attending this event.

The afternoon forums on the status of our real estate industry is very informative and useful in terms of economic outlook expected in the future and bright prospect our country can attain with high demand of Filipino professionals in the overseas work and business processing outsource sector, the near completion of infrastructure and telecommunications development projects around the countryside with sigh relief of pending slow economic recovery of the world.

Tourism Secretary Ace Durano is pushing the Philippines to have take chunk of the tourism market the Department of Tourism's aim is to promote property tourism, medical and ecology tourism in which it will showcase our lush beautiful sceneries and bountiful resources to foreigner and also our very own local tourist. Also in the forum are Philippine Retirement Authority Chairman Edgardo Aglipay who has given a short lecture on capturing the foreign retiree markets of baby boomers, people born before World War II. Mr. Antonio Antonino, the president of Ayala Land Inc. in which he discusses about real estate investment in the diverse Philippine market, Secretary Margarito Teves of the Department of Finance discussing on the investment outlook in the Philippines, Vice President Noli De Castro, the chairman of HUDCC on how the Philippines escape the subprime mortgage crisis and Director General Lilia de Lima of Philippine Economic Zone Authority on how locators still stayed in the economic zone in the Philippines.

I am very hopeful and optimistic on the positive news that we received from this movers and shakers of the real estate industry in the hopes of strengthening and putting our faith on real estate in order to hedge inflation. We are experiencing slow growth in our economic overview but with hopes of slow economic recovery of the United States and the whole world in which it will takes months to years before the happy days are here again.


Copyright 2008-2009 - PinoyMoneyVantage

Fresh Outlook on Philippine Real Estate for 2009 (part 2)

There have been some woes and slow growth recently in the real estate sector as the industry was affected with the current global financial crisis which was have written on the previous post back in February 2009. There have been major changes among the Business Process Outsourcing Companies (BPOs).

The task taken by government in keeping our country afloat has been monumental. During the recent speech by Gov. Amando Tetangco of Bangko Sentral ng Pilipinas (BSP) last April 14, 2009 on the occasion of Australian-New Zealand Chamber of Commerce Annual General Membership held at Hotel Intercontinental Manila, Makati City mentioned that "no economy is immune from the effects of this crisis, but those which have built up buffers are more likely to fare better than others".

According to the 4th Quarter of 2008 Reports of Colliers International Philippines, in the past months shows that rising vacancy and inventories of office, commercial and residential especially on commercial business districts of Makati have reached around 2.6 percent. Movements of tenants elsewhere around or nearby these areas are on the rise. These actions should complement their needs, requirements, specifications in order to lower the costs of a companies' operational expenses compared to a high-rise buildings which are only suited for office settings due to their expected expansion and growth. Factors to be considered are power consumption, telecommunication equipment setup, shifting operations and others affected the buildings' suitability for these BPO companies. Moving to a more viable and amiable locations such as Clark Freeport (Pampanga), City of Sta. Rosa (Laguna), Quezon City, Cebu City and other nearby areas would benefits these other site from the rapid growth of the contact center industry.

A few weeks ago, Secretary Ralph Recto of the National Economic Development Agency has reported that the Philippines is in a collision course of near recession with growth of 0.4% on the first quarter of this year. With government expectation of a growth rate of 4.4% for the first quarter it turned out the slowly as the world recession is rearing its ugly head again. The government is taking steps on bending and curbing the mass lay-offs from happening by providing alternatives such as other jobs and livelihood for the poor such as Comprehensive Livelihood and Emergency Employment Program.

On foreign ownership of land in the Philippines, many suggested that government should open up shores of this country to foreigners in order to invest more creating more Foreign Direct Investments(FDIs). However, research done by the IBON Foundation reported that revising our laws as spearheaded by House Speaker Prospero Nograles would make the real estate prices skyrocket with the notion that the masses and middle class Filipinos will no longer be given the opportunity to buy or acquire property if this happens. The real estate industry needs regulation on acquisition if they are about to change the law limiting to 10% of the lands as disclosed by an anonymous real estate leader if the government and people are open to it.

On the brighter side, Banks are now offering low rates are getting lower now at 7.5 percent since January 2009. Home Mutual Development also known as PAG-IBIG has already lowered its interest from 7.5 percent to 11.5 percent. The lowest that a home lending government agency can offer. With these developments, refinancing of previous real estate bank loans can be done if a home buyer has a current loan mortgages in order to reduce and readjust the monthly amortization.

Despite the good news, the banking industry has become hesitant with the growing number of non-performing assets (bad assets) due to default or foreclosures by a borrower on properties and others. However for a real estate investor and speculator, this is a sign of a gold mine of new opportunities in a current global financial turmoil with growing number of these properties are located in highly populated and commercialized areas within the metropolis. Best time to buy is on a down market. Right now developers are encouraging potential buyers and investors to buy properties offering them more affordable longer and attractive payment schemes with lower interest rates at fixed terms from banks and other lending institution which is enticing indeed.


Copyright 2008-2009 - PinoyMoneyVantage

Updates on PAG-IBIG Loans (Home Mutual Development Fund) for 2009

Last 1st April 2009, Vice President and Housing Czar Noli De Castro recently announced that the Home Development Mutual Fund (HMDF) also known as PAG-IBIG Fund have approved the increase and adjustments on loan structures from the previous maximum loan bracket of PhP 2.0 Million to PhP 3.0 Million. These adjustments are great news for our folks who are given a more wider choices and options in a purchasing a home.

This move not only will benefit all members which focuses more from middle income earners and workers in highly urbanized areas in the Philippines and the Overseas Filipino Workers (OFWs) but also the real estate development companies as well in providing housing to our people. Thus empowers, the buyers with maximized purchasing power which help the real estate industry at the same time.

Here are the new Pag-ibig housing loan structures per annum:

For loan up to P400, 000 -- interest is 6%
Over P400,000 up to P750,000 -- interest is 7%
Over P750,000 up to P1 million -- interest is 8.5%
Over P1 million up to P1.25 million -- interest is 9.5%
Over P1.25 million up to P2 million -- interest is 10.5%
Over P2 million up to P3 million -- interest is 11.5%

All are fixed rates. For new developer, HMDF funds requires a 30% equity for their buyers to acquire a property and 70% loanable amount with strict compliance of requirements. If development company has a proven excellent track record , they can request to lower the equity requirement to 20% or 10%. Loans can be paid either 10 Years, 15 years, 20 years , 25 years to 30 years maximum.

Copyright 2008-2009 - PinoyMoneyVantage

Betting on Real Estate: Foreclosed Property Sector in the United States!

Foreclosure in America is high and rampant nowadays. But still even if the U.S. is in recession there are still a lot of ways to earn money through real estate which is the highest and lucrative among all the investments you can think of. Right now property inventories are high and you can still flip lots of it as long you have extra cash on your sleeves with the growing demand of properties coming from other nations such as Canada which is least affected with the financial meltdown. Canadian economy is still resilient and in tip top shape compared to their neighboring America because less credit fall out. An example of Canadians moving down south to America especially in Las Vegas, Nevada wherein the prices are hitting rock bottom as what the video shown above. Other nationalities that are paving their way to the U.S. soil are the mainland Chinese who have the money and resources to tour and venture in America.

Las Vegas is a sin city or sin capital of the world but indeed even if there are no angels around in this heaven on earth. The real estate in this place is lucrative once the ailing economy recovers in a matter of months to years. President-elect Barack Obama later report his plan of creating a stimulus package in the ailing economy and in order to spur the once booming America back to its knees one step at a time. As an investor and a real estate broker I am hopeful that the world would become vibrant again and somehow will manage to survive the gloom over the dark clouds this 2009.

What about us, Global Pinoy or Filipinos? We can still manage to buy a property in the United States as long as you have the ample amount of funds in buying that dream home in their soil plus it is a very good investment and a plus if you are trying to impress the immigration official if you plan to migrate in America.

Included also in this blog write up the history of the credit crunch in 2007 and how it affected America and in the World as explained on CNN.

See the second part of this segment.





Copyright 2008-2009 - PinoyMoneyVantage

MONEYVANTAGE: Rent is up for Property Rental Sector

Yesterday, I was alerted with the TV report from ABS-CBN regarding that the rent control law has finally lapsed last 31st December 2008 (see Republic Act 9341: Rent Control Act of 2005). I thought it was no big deal after all and finally realized that we do have rental residential/commercial properties in hand somewhere in Quezon City. I felt a bit ecstatic but somehow felt sorry for the people who we are leasing our properties. However we are adamant NOT to increase rent in order to compensate with the sudden slump in food business in which our tenant are involved with.

The demand for rental property is still high among urbanized cities particularly in Metro Manila. Still with the rapid urbanization and the immigration from people to these major cities the need for space and housing is still needed as major locators are not moving yet to closer provinces plus the business process outsourcing (call center) is still ongoing even with the slump in America and shifting to other countries not or less affected with the global financial crisis. Companies are still in need of housing for their personnel. Location of rental property, environment and neighborhood is also a key factor why people are looking for. As mentioned before, it should be close proximity, accessible to transport services and convenient for the tenant to get to where he/she works or intends to go. The closer the rental property to these factors the higher the rent is.

Somehow the RENT CONTROL LAW is beneficial for the poor and low-income families but the distributional effects are minimal since non-poor families have equal access to rent-controlled units. Philippines Rent Control Act of 2005 Provides rent control for properties with monthly rent not exceeding PHP10,000 in cities and PHP7,500 in other areas. Rent control maybe necessary to prevent economic eviction and abuses on payment of key monies.

Some lawmakers are encouraging people to avail the PAG-IBIG Housing loans in which they their rates are at 11.5% interest p.a. compared to their previous offer of 18% interest per annum a few years ago in order to acquire their dream house and residential condominiums.

Copyright 2008-2009 - PinoyMoneyVantage