Condotels: Worry-free Investments (continuation)
Investors can elect to occupy their unit whenever visiting the area, or use them solely for rental purposes. When units are placed into rental inventory they are rented like regular hotel rooms. The developer. Which is often the hotel managing company. Owners are also free from time and energy devoted to designers and contractors when it comes to room decor. Everything is provided including furnishings and linens by the hotel developer. If an owner decides to sell their condo hotel unit, it is relatively easy because today’s resale market is very promising. There is potential for appreciation.
News And Events
Traffic mess pushes demand for condos
BY AMADO P. MACASAET
A MAN and his wife, yet childless or with only one child, are both working in Makati. It takes them about two hours to go to work from their home in Fairview Village, Quezon City.
Since they are just starting out in life, they have not saved enough to buy a home. They are renting a reasonably descent apartment for P10,000 a month.
There are many such couples living in places far from work, according to Danilo Ignacio, president and chief executive officer of Eton Properties, a property developer largely controlled by the companies of Lucio Tan.
Fewer are those who are retired and living in posh homes in Forbes Park and other exclusive villages.
The young couples and the retired rich constitute a big market for apartments. The young couples discover that they are effectively saving a good part of their income if they buy condominiums close to their place of work – walking distance if possible – on installments in amounts similar to the rents they pay.
Apart from that, the couples avoid frayed nerves, fuel expense if they have cars and transportation costs if they take public transport.
Old retired people, on the other hand, Ignacio explained, have children they hardly see. They are making a living for themselves.
Those with financial sense invariably sell their mansions or rent them out. They buy expensive apartments in Makati or nearby places like the Taguig part of the Fort. Or they rent out their expensive homes preferably to foreigners working in private companies in the Philippines or have jobs in their countries’ embassies and legations.
The rich retired couples make a pile selling their mansions or make handsome income in rentals by buying expensive three-room apartments.
The potential demand for the middle market is so huge, Ignacio said. The backlog for this sector is about 3 million units or homes.
According to Ignacio, demand for apartments from the middle-income sector will rise even faster as the economy grows in tandem with the uncontrolled increase in the number of people.
In the next 15 or so years, there could be daily traffic gridlocks in many parts of Metro Manila. Delays in arriving at the place of work have economic costs in terms of manpower losses.
Ignacio said many companies deduct the length of tardiness from the pay envelope.
The attraction in buying affordable apartments is savings, avoiding frayed nerves and eventual ownership of a home which may not be possible if the couple continue to live in rented apartments.
Eton has a syndicate of banks that provide financing for apartment buyers. The rule of thumb, according to Ignacio, is total income (man and wife, if both are working) divided by three. One third should to the amortization of the apartment.
Eton has apartments that sell on installments for as low as P10,000 to P15,000 a month. That amount, according to Ignacio, is about the same as the rate for renting apartments, which is a never-ending process.
Buying apartments in installments makes homeowners of people after 10 to 15 years or even longer.
Thus a couple who pay P10,000 a month for renting a decent apartment end up coughing out P1.8 million in a 15-year period without considering the escalation clause. This amount could well be spent in payment for an apartment in installments.
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