Uncategorized

8 Key Numbers to Know Before a Real Estate Investment

  1. Your Mortgage Payment

       

The Debt-to-Income ratio compares your total family monthly income with your total monthly debt payments (not just your mortgage but other debt too). Banks typically require your ratio to be 30%, but some go up to 45% depending on your credit past and emergency cash.

مقالات متصلة

2. Down Payment Requirement

 

It’s 10% to 20% of the total contract price of the real estate, from your own cash, typically spread monthly for 3 years. Or you can pay on the “spot” to get valuable discounts.

  1. Income Eligibility to Qualify for a Mortgage

It’s 30,000 to 50,000 Pesos total family monthly income to be eligible.

  1. Real Estate Price to Disposable Income

The Price-to-Income Ratio compares real estate prices and yearly disposable income in a specific market. The lower the ratio the more affordable the real estate is. Manila’s ratio as of this writing is 18.45 which is 18th highest among 65 active Asian & Middle East markets. This means Manila prices are 18.45 times the yearly disposable income in Manila.

  1. Price-to-Rent Ratio

The Price-to-Rent ratio compares real estate prices and the rent you get. It’s a measure whether it’s better to rent or buy. A ratio of 15 or below is not good if you want to rent out your real estate, but good if you want to live in it. Ratios from 16 to 20 are good if you want to rent out, ratios of 21 or above is way better. Manila’s ratio as of this writing is 20.50.

  1. Gross Rental Yield

The gross rental yield compares the rent you get with the total cost of the real estate (total cost adds improvement costs to the contract price). Manila’s gross rental yield as of this writing is at 4.88, ranked 22nd among 65 active Asian & Middle East markets.

  1. Net Rental Yield or Capitalization “Cap” Rate

This is a more valuable measurement than the gross rental yield. This compares the rent you get, MINUS your operating expenses (repair, taxes, insurance, vacancy costs and agent fees), with the total cost of the real estate. A net rental yield of 1% more than the mortgage rate is typically good.

  1. Cash Flow

If the mortgage, interest, and operating expenses are covered by the rent you get, you’re at positive cash flow. And positive is good

Seems like a good start? Because rest assured it is, and now CONGRATULATIONS: you can truthfully add Savvy Real Estate Literate to your resume just knowing these 8 key numbers. Onwards and upwards to Savvy Real Estate Investor!

Ayala Land is the Philippines’ most experienced real estate developer, with roots tracing back to 1834, Ayala Land’s legacy was built on the vision of its founders and through the generations of leaders who recognized unique opportunities for transformation.

Ayala Land sees steady growth in building sustainable communities with Ayala Land Premier maintaining its dominant position in the luxury segment, and Alveo cementing its position as the market leader in the upscale segment.  Ayala Land also continues to grow its leasing business through commercial, retail, and office spaces, resorts and hotels and the launch of Seda hotels, the first all-Filipino hotel chain for the urban traveler. New business such as QualiMed, continue to enhance the sustainable communities that underpin Ayala Land’s operations as it enters new growth centers.

اترك تعليقاً

لن يتم نشر عنوان بريدك الإلكتروني. الحقول الإلزامية مشار إليها بـ *

زر الذهاب إلى الأعلى
Languages - لغات »