BASIC FAQ’S ABOUT REAL ESTATE

By Mark Ferry John A. Lamsen, 25 June 2025, 9:42 pm

 

Filipinos working on various industries may have heard the term “real estate” and mostly associate it to the moneyed and affluent people. However, if one is to go deeper into its real definition, real estate is actually everywhere, and not just for the rich and famous. Here are some of the basic frequently asked questions (FAQs) about it.

 

WHAT IS REAL ESTATE?

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The term “real estate” is defined as the land and any permanent structures or improvements attached to the land, whether natural or artificial (https://investopedia.com). So, as long as a structure is attached to the land, or just simply land itself, it is real estate.

 

CAN EVERYONE OWN REAL ESTATE?

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Anybody can own real estate – rich, poor, young, old, male, female, etc., subject to legal limitations. And even if you just simply rent a space, then you still have real estate. That’s a basic truth.

 

From a simple renting a bedspace, a transient house, a house – to buying mansions or warehouses or office towers, real estate encompasses every space need or requirement of every person or organization. Kahit simpleng upa ng maliit na kwarto o bahay o low-cost housing, it’s real estate.

 

WHO FOUNDED REAL ESTATE?

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As a true Christian, I only know the One who created the land, the primary real estate of every human or animal – the one and only true invisible God, the Creator of heaven and earth. Without this earth that God created, we have nothing to discuss about.

 

HOW CAN ONE HAVE REAL ESTATE?

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One can have a piece of space or land by renting a space (property rental/leasing) or buying a property (asset acquisition). Since the real estate industry is a highly regulated one among all other industries, there are several laws governing these transactions, particularly the New Civil Code, the Condominium Act, PD 957, the Maceda Law, and the like.

 

WHAT ARE THE TYPES OF REAL ESTATE?

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1. Residential real estate: Any property used for residential purposes. Examples include single-family homes, condos, cooperatives, duplexes, townhouses, and multifamily residences.

2. Commercial real estate: Any property used exclusively for business purposes, such as apartment complexes, gas stations, grocery stores, hospitals, hotels, offices, parking facilities, restaurants, shopping centers, stores, and theaters.

3. Industrial real estate: Any property used for manufacturing, production, distribution, storage, and research and development.

4. Land: Includes undeveloped property, vacant land, and agricultural lands such as farms, orchards, ranches, and timberland.

5. Special purpose: Property used by the public, such as cemeteries, government buildings, libraries, parks, places of worship, and schools.

 

PROS AND CONS?

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Pros

Capital Appreciation – unlike cars and other assets, real estate values grow over time

Steady Income – for invested apartments, houses for rent or even kiosk stalls for lease

Asset Wealth – effective wealth building

Can Be Used for Leverage – can be used as collateral for future loans

Generational – can be passed on to future generations

 

​Cons

Illiquid – will take time to convert to cash

Subject to external factors – such as economic downturn, zonal value increases (which also lead to higher real property taxes)

Management/maintenance costs – to keep the property in good upkeep

Large investment cost outlay to acquire

 

HOW TO START?

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First, assess your actual need. Your family size or your business requirement will determine the type of property that you might need. Do you need a 3-bedroom house? Or are you OK with just 1-2 bedrooms? Does your business require large office space for 100 people, or is a 150-sqm office layout already fit for your lean operation?

 

Major consideration aside from your need is the property location. Are you OK traveling from north or south of Metro Manila every now and then for work? Is your business capable of working efficiently if your office address is 2-3 hours away from your manufacturing site? Can you serve clients located around the metropolis without sacrificing quality?

 

Last major consideration is your financial capability. Can you pay upfront in cash so you can fully possess the property you wish to acquire? Can you capable of paying the monthly amortizations for the loan you wish to obtain to finance your dream project, your dream house and lot, based on your salary? Can you carry the associative maintenance costs upon full property acquisition (realty taxes, repairs, security and janitorial costs, etc.)?

 

If you say YES to all three above, then go and get that property you dream of. Remember, it’s an INVESTMENT, not just a cost on you. An intelligent investor maintains his investment, not letting it slip away from his hands.