Buying a house/ property is both exciting and stressful. Selling your property is just plain stressful. Many people do not know where to even begin when they are buying or selling their home. This is why it is essential for home buyers and home sellers to find a great Realtor to help them through the process. Follow these ten tips to make the process of finding a Realtor less difficult.

Great Property For Sale or Rent. Two Bedroom Fully furnished unit in the heart of Makati.

1. Find a Realtor that you trust. There are so many real estate agents so take the time to interview each agent before you decide to work with him or her.
2. Choose a Realtor that knows his or her facts. Most real estate agents have charisma, which makes it hard not to like him or her. When it comes down to it, choose a Realtor that provides you with honest facts, even if it is not what you want to hear.
3. A Realtor should know his or her way around the area. As a buyer you want to know that your agent can get you to each house on your list without getting lost. An agent that pulls over to look at a map does not instill confidence in a buyer.
4. The highest selling agent in the office may not be the best for you if you need extra attention. Choose an agent that has time to meet your specific needs and is not overwhelmed by other customers.
5. Choose a Realtor that works full time. There are some agents who work part time and buying or selling real estate requires the work of someone who can be there for you anytime.
6. Avoid pushy agents that push you to buy a house that you’re not sure of or that pushes you to list your home with him or her. Big decisions require time, avoid pushy agents. You wouldn’t believe the horror stories about pushy agents… I just recently worked with one who was actually pushing me to take a LOWER OFFER just so he could get the commission! Stay a thousand miles away!
7. Choose someone that is internet savvy and up to date on technology. A technological agent will have the world of real estate at his or her fingertips.
8. Choose an agent that has a strong network of professionals around him or her. This can be personal assistants or a great home inspector. If your Realtor recommends someone to you, it is likely that there is a good working relationship between the two professionals.
9. Find a Realtor who enjoys what he or she does and is happy and excited to work with you.
10. Word of mouth. Get a recommendation from someone that knows a great Realtor.

A good Realtor can make even a bad deal seem not so bad. Following these tips will help you to hand pick a Realtor that will help you with your real estate needs.

The single thing almost all investors have in common is the desire to know the answer to the question “How much will I make on my investment?“. Put another way, investors want to know what the return on their invested dollars will be, or what their return on investment will be (ROI). The ROI performance measurement or Yield, as it is sometimes referred to, can be applied to measure the effectiveness of all types of assets and is especially useful in real estate. The ROI measurement captures the relationship between Net Operating Income and Invested Capital, Cash Flow and Invested Capital and the Asset’s Total Return versus Invested Capital.

The first of these “ROI” measurements is Net Income ROI, or the relationship of the Net Operating Income (NOI) versus your Invested Capital. This is helpful to investors who focus primarily on the traditional income statement. Net Operating Income is derived by subtracting all items classified as expense from gross revenues. NOI is calculated both before and after taxes. I posted a PDF Form that should help to calculate your NOI. You can download it again here.

Important Note: When applying an expense item to Mortgage, it is important to remember that the interest portion of that payment should be applied and not the principal portion. The principal portion is treated as a balance sheet item and has no effect on the income statement.

The formula for NOI Yield is;

gross income – operating expense – interest cost – depreciation – taxes
= ———————————————————————————–
owner’s equity (invested capital)

Example:

• Property: 400 Square Meter Office Condo in Makati
• Acquisition Cost or Invested Capital is: Php 20.5 Million
• (Please do not include VAT since that is creditable)
• Gross Income from Rent: Php 3.0 Million Annually
• Operating Expense: Php 106,000.00
• Corporate Income Tax 35%: Php 1.0 Million

Using the formula and assumptions above, we calculate our NOI Yield as follows;

3.0 Million – 106,000 – 1.0 Million
= ——————————————
20.5 Million

Net Operating Income Yield = 9.2%

The complete excel worksheet is attached and can be downloaded here. Feel free to use and revise as necessary.

So what does a 9.2% yield mean to you? As we discussed during the last issue, Performance Measurement is RELATIVE. Compared to other investment instruments 9.2% may not seem that attractive but once you consider the level of risk, the proposition takes on new meaning. Furthermore, if you compare the same return to instruments of its kind, a 9.2% yield for an Office Condo in Makati is something you will not want to miss.