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Income generating property or guaranteed appreciating vacant lot? Which to buy?

richpulubi · 7 · 3062

richpulubi

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I'm thinking of buying small income generating properties for retirement income. 

BUT there is a vacant commercial lot for sale, in a newly opened wide road that has several developers (DMCI and SMDC) that are putting up condos and townhouses along the same road.  All the commercial lots are gigantic, but there is one small lot left!  And so...I'm tempted to get it, hold it and sell in a few years, or even build a small commercial building.

What would you guys do?  Buy sure income properties(all tenanted, income of 7-10% of value of property), or speculate on a lot that has a future upside?


Wills

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Buy it and build a small commercial building! Do it now! ASAP!

Tsong it's a no-brainier decision.


richpulubi

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Buy it and build a small commercial building! Do it now! ASAP!

Tsong it's a no-brainier decision.

Thanks tsong, parang gusto ko ring i-risk...

Parang it's deciding to buy bonds(income-generating) or stocks(vacant lot)!


Wills

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Based on the scenario I would assume that the lot is still cheap, I woyld act fast if I were you.


Parang it's deciding to buy bonds(income-generating) or stocks(vacant lot)!


Either way will yield positive result, but I wouldn't compare that to bonds because as you mentioned earlier you can get a coupon rate of 7-10% per annum and its a commercial lot so it is sustainable. In bonds you cannot get that rate in a long period of time.

For me its buy, build and hold property I wouldn't sell that unless you see TEL at 1200 pesos or MWC at 14 pesos!hehehe


richpulubi

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Real estate investing has its own set of risks though, and involves many more people, like a lawyer, broker, maintenance, etc., while buying stocks and bonds is as easy as a click of the mouse of your computer.


bauer

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What would you guys do?  Buy sure income properties(all tenanted, income of 7-10% of value of property), or speculate on a lot that has a future upside?

^The sure income properties (income of 7-10% of property value) if it is a yearly basis is not attractive for me due to deductions for income tax, insurances, realty taxes, repairs & maintenance, etc.

The small commercial lot plus a commercial building later on, I suggest you make a simple mathematics computation.  If it is too good to be true, why is it still not taken?


richpulubi

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^The sure income properties (income of 7-10% of property value) if it is a yearly basis is not attractive for me due to deductions for income tax, insurances, realty taxes, repairs & maintenance, etc.

The small commercial lot plus a commercial building later on, I suggest you make a simple mathematics computation.  If it is too good to be true, why is it still not taken?

Well, small is kinda relative.  The other lots are 5000sqm to 20000sqm.  At 45K per square  meter,  the market may not be that big.

Nevertheless, it's only been offered this year, so I'll need to do my due diligence...


 


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