Lumina Sessions: Real Estate Investing for Beginners

14 May 2022

Do you know what’s the reality and advantages of having a real estate investment?

Let’s join Theresa, from Lumina Marketing Bicol as she discussed about Real Estate Investing for Beginners in this week’s Lumina Sessions.


FAQs in Real Estate Investment

1. How does it work?

Real estate investing is all about buying and owning a property with an intention of generating a profit from it. Most investors will tell you that your own house is not necessarily a real estate investment.


The main reason real estate is profitable is because the price of your real estate property almost always appreciates. The more developed the area is, the more people will want to live there. And with more demand, the less supply the area will have making your property value appreciates.


2. How can we earn from it?

One can earn through real estate through different ways:


Capital appreciation

This happens when you buy the property at a lower price and sell it a higher price.


Rental income

There are various ways that you can rent out a property. You can rent it as a bare lot or you can build structures such as a condo unit or as a house and lot. You can have it rent whether it is furnished, semi-furnished, or bare.


A lot of people prefer this kind of income because you will have earnings every month, especially if you have fixed tenants.


3. Why should we invest in real estate at our 20’s?

There are a lot of reasons why we need to invest in real estate in our 20’s.


Time horizon

As young as you are, we should buy a property as our investment so when we reach our 30’s, the value of your real estate investment already grows. With this, you can earn a lot from it over a decade whether you are planning to sell it over time or want to rent it out.


Forced savings in your 20s

Paying every month for the down payment or amortization of loan forces you to put your money in an asset that appreciates in value.


Power of leverage

It is a way of borrowing capital money for your investment with an intention to earn from it.  Home loan is one of the cheapest forms of loan here in the Philippines with minimum of 6% to 8% interest rate.


Kinds of Real Estate

When talking about real estate, most people think that it’s all about residential properties that include condo, townhouses, single firewall units, or duplexes.


What most people don’t know is that they can also get a commercial property in real estate that they can use in retail, offices, leisure, or industrial properties which they can also use for warehouses or factories.


Another kind of real estate is bare lots. This has a lot of potentials for development.


We know that during the pandemic, many people are looking for properties which are located in provinces but still have a vibe of a city center. Good thing that Lumina Homes offer these kinds of properties in Bicol region particularly in Legazpi City, Albay and in Sorsogon City, Sorsogon.


The potential progress of these cities is now on its way up the ladder. This is perfect especially if you want to invest in your 20s as you can enjoy both perks of capital appreciation in your real estate investment as well as rental income from that property that you bought.


4. Ways to Buy a Real Estate Property

There are two major ways in which you can buy a property:


Directly from the developer

When you buy it from a developer, you can choose to buy it in its Pre-selling phase, Ready for Occupancy, or buy a lot.


For Pre-selling or Not Ready for Occupancy, it means that the home that you will buy is not yet constructed or developed. Meanwhile, Ready for Occupancy units mean that your home has already been built and now ready for occupancy. The last one is buying a bare lot in which you can build your own home from scratch.


Secondary market

It means that you buy it from the Facebook MarketPlace, websites, real estate agents, and similar ways. In here, you can buy a resell property and build on it such as foreclosed properties. These kinds of properties are usually being offered by banks or pag ibig.


5. What we need when we invest in a real estate property?

Keep in mind the following things that you need to prepare when you are planning to start a real estate investment:


Good credit

This is especially important if you are planning to avail a loan through bank financing. You can get good credit by doing the following:

  • You can get a credit card
  • You can also take out smaller loans and pay them back in time and in full amount
  • Make sure to fill out your Income Tax Return or ITR annually. This can help you to get a good credit standing.


Familiarize yourself

Knowing all about the property that a developer or seller offers and also the policy that come along with it when you avail it will help you a lot in the decision making. You can do this by watching videos like Lumina Sessions or by checking out the real estate property website online.


Money for reservation and down payment

When availing a property, you should have at least a cash amount of 10 % to 30 % of the total contract price on hand that you want to avail in order to start investing in real estate.


6. Type of Real Estate Investors

There are many types of real estate investors that you will encounter in this market:



This is a person that hunts for foreclosed properties.



This type of real estate investor buys a property that is not necessarily in the best condition. The flipper will then renovate it and sell it for a profit.



This type of investor prefers to buy lots only then develop it, build a home, and sell it at the end.


Swing Seller

These are the investors who buy a lot of Pre-selling properties, mostly found in subdivisions. Then, right before the community is finished, they sell it for assumed.



These are investors who acquire a property to rent them out.


Cons in Real Estate Investing

Now that you know that advantages of real estate investing, you might still have doubts to start investing as you are not sure about the cons of real estate investment. To make clearer for you, below are the disadvantages that you may encounter when investing in a real estate:

  1. A huge chunk of money is tied down in real estate.
  2. The upkeep and maintenance of the property that are usually experience by landlord owners those who rent out their properties.


It is important to be aware of the cons of real estate investment so that you can be prepared for it in the future. If you don’t manage your investment properly and straightly go for real estate which is a high-risk investment, then you will be classified as “House Poor”. It means that although you have your own property, you can’t easily sell it over a short period of time in times of emergencies.


And this is where our Lumina Sessions end for this week. We hope that our first time real estate investors learn a lot from this session. See you on our next Lumina Sessions!

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