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CONTENTS
Let ter from the Editor Letter from the Editor
Departments 4
Market Report Buying Your First Rental Property
8
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Feature Investment Property in the Philippines
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Real Estate Spotlight Are you ready for the new CFPB’s Mortgage Disclosure Rules?
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Profile Jessica Castro Financial Professional
June 2015 • Vol. 8 • No. 6 P.O. Box 24881 Barrigada, GU 96921 Tel: (671) 472-3495 | Fax: (671) 472-3498 email: office@yellowpagesink.com
[ Publisher ] [ Business Sales Manager ] Jay-R S. Dominguez
[ Editor ] Arlene Taitague Taitingfong
Passionate About Helping Families
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From the Experts Make Property Investment Part of Your Retirement Plan
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How to D.I.Y. 5 Traps for DIY Property Managers
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Curb Appeal Protecting Your Investment Property
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Who Ya Gonna Call?
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Classifieds
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Closing
[ Display Advertising ] Evelyn Trinidad
[ Traffic/Circulation Manager ] Carol Aperocho
[ Production Manager ] Mark S. Burke
[ Graphics & Layout ] Mark S. Burke Edwin E. Valencia
[ Website Development ] Mark S. Burke Edwin E. Valencia
[ Editorial Contributors ] Samara Bedwell Siska Hutapea Rey Llaneta Odessa Martinez Joylyn Muñoz Arlene Taitague Taitingfong Kim Anderson Young Cover Photo: Mark S. Burke
Arlene Taitague Taitingfong
Dear readers, We hope you enjoy our June issue. This month we focus on Investment Propety In this month’s Feature, Rey Llaneta gives us an overview of what is available in the Philippines if you are looking for a retirement home or a property investment opportunity. Joylyn Muñoz illustrates the many ways buying a multiple dwelling can help you with future income in From The Experts. She reveals how it is not too late for those of us looking to retire soon. There is so much more to managing your property and tenants than some of us may be aware of. Read Odessa Martinez’s article in Curb Appeal to get the full picture. Our DIY segment by Samara Bedwell, explains what traps that do-it-yourself property managers tend to succumb to if not fully knowledgeable of what they are doing. Our PROFILE this month is Jessica Castro, Financial Advisor at First Command Financial Services, Inc., who has a passion for helping others. Read about how she came to achieve her goal and continues to serve the community. Kim Young reports about the new Mortgage Disclosure rules coming in August. Read how it will affect the loan application process in Real Estate Spotlight. Also check out the latest Market Report by Siska Hutapea. Her article on buying your first rental property is very informative and reveals practical advice for those interested in securing property for investment. Peggy Llagas gives us information about the new disclosure forms that lenders will need to make for their consumers which is to be in place by August 1. Ryan J. De Guzman reports on a trip he and a small delegation from Guam made to Washington DC recently. The group attended the National Association of Realtors® annual Legislative Meeting and Trade Expo. If you have ideas for articles, or are interested in writing for CasaGuam Magazine, or have come comments, please let us know! You can write to us at editor@yellowpagesink.com. And to all father’s everywhere, Happy Father’s Day!
CasaGuam is Published by:
Arlene Taitague Taitingfong
CasaGuam Advertising Disclaimer All Advertisers agree to hold the publisher harmless and indemnify it against any and all claims, losses, liabilities, damages, costs and expenses (including attorney’s fees) made against or incurred by the publisher, officers or employees with respect to, or arising out of, the content, text, graphics or representations of any ad published herein, including but not limited to the sole negligence and/or fault of the publisher. The publisher is not liable for any claims, losses or damages of any kind, arising from the wording, text, graphics or representations of any ad published herein, or the condition of the articles sold through the publication, or performance of services advertised in this publication. All advertising and/or performance of services advertising and/or submissions become wholly the property of CasaGuam Magazine. CasaGuam Magazine is a registered trademark of PTI Pacifica Inc. Copyright © 2008. All rights reserved. Reproduction in whole or in part in any form without the express written consent of the publisher is prohibited. We reserve the right to edit or refuse any ad and to reprint any photo for promotional use.
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Market Repor t
Buying Your First Rental Property eal estate investment is a fascinating industry. I remember my first real estate investment in Guam, a townhouse unit in Flora Pago Gardens in Chalan Pago in 2003. At the bottom of the real estate market, an absentee off island owner wanted to offload his investment and my husband decided to take the chance. With a $10,000 down payment that we borrowed (and paid for) from my mother in law, we officially became property owners. We were planning to move into the unit, but an opportunity came when subsidized military rental tenants offered $1,350 per month to lease the unit. We were staying in a nice two bedroom apartment in Mangilao at below market rent at $600 per month, so we thought why not. It turned out to be the right decision. We were able to pay more to the mortgage principal and build equity. When another opportunity came, we were able to refinance and use some of the proceeds to acquire another condominium unit. We renovated the unit and sold it in 2012 at slightly below market to another proud homeowner. A good friend’s advice of always leaving something on the table for the next person is worth following. Why do people invest in real estate? Several reasons include cash flow, tax benefit of depreciation, capital preservation and various others. Some small, off island investors that acquired property in
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Guam noted that having a US Dollar based investment property diversifies their investment portfolio, hence preserving their capital. For these types of investors, a lower return is somewhat acceptable and they are likely to pay more than local buyers. The first step in investing in real estate typically would be to prequalify for financing. You should visit mortgage departments at various bank and credit unions on island. This will help you estimate how much you can prequalify for and how much down payment you can afford. This is an important step, and even if you do not qualify at the moment, at least you know how to get there. What should you buy? You can choose from condominium units, single family dwelling, or multi-family dwelling. A condominium unit is typically the easiest one to start with. You do have to pay monthly common area fees, but a condominium unit investment requires less hassle. The common area fees typically cover building insurance, common area maintenance and sometimes include security charges. Many good quality condominium projects have units available for sale below $100,000; however, there are various levels of down payment required on condominiums depending on the project. As a prudent buyer, talk to your knowledgeable REALTOR® before deciding on which condominium project to enter. Ask whether the project is fee simple or leasehold, how much is the common area fee, does insurance include typhoon, and try to get minutes from the homeowner’s association meeting(s). A single family dwelling requires more effort than a condominium unit as you are responsible for everything starting from yard to building maintenance. Single family dwellings typically require less of a down payment. If you buy a four unit complex or below, you can still utilize a conventional mortgage. Multi-family, five units and above, typically include commercial mortgages. Before your purchase, you should also think of your target market, i.e. who will be your future tenant. Here in Guam, you should remember there are only three target markets: the military subsidized, section 8 subsidized, and local market. The type of property and targeted rent should correlate with your target market. Due to the transient nature of Guam’s population, rental property is always in demand, which is great for you as in investor; although rent may go down, which may hinder your investment goals.
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Market Repor t
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Feature
Investment Property in the Philippines By Rey Llaneta, MS, CPCM
uying a condominium in the Philippines is a good investment. There has been an increase in buying retirement homes in the Philippines these past few years, and there is good reason why. In 2014, the Philippines became Asia's second-fastest growing economy after China, racking up a full-year growth of 6.1%.
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Feature On YouTube, there is a video entitled “A Rising Tiger in Asia”. The video outlines the reasons why the Philippines is booming and why it encourages people everywhere to invest in the Philippines now. According to the video, the reasons to make your investments in the Philippines are: • • • • • • •
Strong Economy Good Government Large Population Location Business Process Outsourcing Growth (ranked #1 in the world) Infrastructure and there is a real estate boom happening
As an accredited and licensed broker in the Philippines, this is where I can elaborate on buying real estate for investment or retirement purposes. For many, purchasing a condominium is a great way to invest in property, especially if you are looking for a retirement home. The Condominium Act of the Philippines, R.A. 4726, expressly allows foreigners to acquire condominium units. Here are five good reasons to buy a condominium in the Philippines: 1. Resort-like amenities. Many condos offer full size swimming and baby pools, jacuzzi, gym facilities, private music room, computer room, private movie screening room, card playing room, function rooms, security and a reception desk. My condo in Ortigas actually has all these amenities and more! Many condominiums offer access to amenities and luxuries that many homeowners may not otherwise be able to afford. 2. A convenient lifestyle community. Many condominium developments in the Philippines are located within or in close proximity to commercial and retail establishments. That means restaurants, nightlife, and entertainment are minutes away. This allows homeowners to live a convenient urban lifestyle, one that is in close proximity to community attributes such as schools, hospitals, markets and the like. Being “right there” or close to main transportation routes also gives condo owners the advantage of reduced commuting time and costs. 3. Easy maintenance. A manageable-sized condominium unit means less upkeep. One can spend more time living the urban lifestyle, rather than having to worry about yard work. The grass is always cut; the gardening is done; the garbage is picked up and the grounds and hallways are cleaned and maintained. This is all handled by the condominium association and you won’t have to do any of it!
4. Safe and secure. You will find that most condominiums have high end/high tech security systems in place. Some features include secured entrances, CCTV cameras, fire protection alarm system, video intercom, thumb-print access, security patrols, and guest check-in/out. Some condos have personal access card keys to eliminate unauthorized access to certain floors or building areas. 5. A long term investment with higher appreciation value. Investing in condos is a safe long term investment with a historical increase in property values significantly above inflation. Here are three investment considerations to think about: • Value appreciation. At any given time, the real estate market can go up or down, but over time it will always increase. • Build Equity. If the condo is under mortgage (loan), pay it down systematically to build equity. • Get passive income. Rent out the condo when not in use. Rental prices increase over time and this can create a monthly cash flow that will grow year after year. Before you realize it, your return on investment took less time than you expected! If, at this point, you are interested in investing in property in the Philippines as an investment opportunity or as a retirement home, what is the next step? In international transactions, it is always best to go with reliable, reputable, and bona-fide real estate companies. The company should be able to assist you with inquiries and exceptional customer service. There is also an opportunity for everyone to “see for themselves” what investing in properties in the Philippines is all about. There is an event called the Guam Trade Mission to the Philippines coming up June 17 -20, and is set to take place at the Asia Institute of Management in Makati City, Metro Manila. Participants will have an opportunity to listen to distinguished and knowledgeable speakers who will talk about Philippine growth, as well as Guam growth. On June 18, developers will be available to discuss their projects and sign up people for the tours within Metro Manila and outside Metro Maniila, as well as north to Pamganga (Clark) and south to Laguna (Tagaytay). Looking for a retirement home or an investment property will require research, no matter if it’s here on Guam or another part of the world. It is best to first determine what your list of “must haves” are first, before doing your research. It will save you time and money in the long run. About the Author Rey Llaneta Rey Llaneta is the Broker/Owner and President of RE/MAX Asyenda Realty Corporation. You can reach him at (671) 483-1530. CasaGuam.com 9
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On The Cover
Mataguac Mansion eautiful, newly built 3 bedroom/3 bathroom home available for sale. The home includes a family room that can be easily converted into an additional bedroom or be used as an office or den! The property is fully fenced and includes a 2 car garage. Quality interior design! All appliances included: refrigerator, stove, dishwasher, water heater, washer/dryer, & water softener system. Minutes to Andersen Air Force Base!
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CALL FOR A SHOWING AND FOR MORE INFO! 10 CasaGuam June 2015
Buying • Selling • Leasing Property Management & Development CALL US FOR ALL YOUR REAL ESTATE NEEDS! (671) 647-0888 315 South Marine Corps Drive, Suite 201 Tamuning, GU 96913 • www.ellensrealtyguam.com
Ellen Wilkinson Principal Broker 688-0118
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Real Estate Spotlight
Are you ready for the new CFPB’s Mortgage Disclosure Rules? By Kim Anderson Young hether you’re a home buyer or seller, real estate agent, lender, or title agency – you’re looking at a big change on August 1, 2015 when the Consumer Financial Protection Bureau’s integrated mortgage disclosure rule goes into effect. Put into place to make it easier for consumers to shop for mortgages and protect them from costly surprises at closing, its effects will be far reaching. We can help you prepare for the coming changes!
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Since it’s inception in July of 2011, the CFPB has published what is called the CFPB Final Rule that consists of 1855 pages and incorporates dramatic changes in the way lenders and settlement agents will be closing real estate transactions. Some of those changes are detailed below:
Evidence of Compliance
Forms
Loan Application Process
• New Loan Estimate form (LE) replaces the initial Good Faith Estimate (GFE) and the Truth in Lending form (TIL) combining the two forms into one.
Currently a loan application consists of: 1. Consumer name 2. Income information 3. Social Security Number 4. Address of Property being purchased 5. Estimated property value 6. Loan amount requested 7. All other information required by creditor in order to complete the application.
• New Closing Disclosure(s)– replaces the HUD – 1 settle ment form and incorporates both the Loan Estimate (LE) and Closing Disclosure (CD) forms. • New Settlement statements – are being developed by the American Land Title Association (ALTA), including stream lining the naming of fees since the new rules require fees to be listed in alphabetic order. For example, some jurisdictions might name a termite inspection or a pest inspection a wood destroying insect inspection. Timelines A New Three day rule now specifies that the Loan Estimates (LE) and Closing Disclosure (CD) statements must be delivered to the buyer 3 BUSINESS days prior to closing. If the statement is mailed to the borrower, that period extends to a full six business days in advance of closing.
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New rules now require the ability for full transaction documentation and playback including communication between borrower, lender, Realtors and settlement agent.
The Final Rule of the CFPB eliminates item 7, the catch all requirement that helps lenders determine the repayment ability of a potential borrower. Lenders will not be able to require a borrower to submit information verifying income prior to issuing pre-approval (however, banks are allowed to obtain a credit score). The lender cannot take a loan application until the client has selected a property. This will cause challenges to builders and Realtors who previously relied on the pre-qualification process in determining potential buyers credit worthiness. About the Author Kim Anderson Young, president of Security Title, has over 30 years of experience in the real estate industry. Contact her at kim®securitytitle.net or 647.8100.
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Profile
Financial Professional Passionate About Helping Families
By Arlene Taitague Taitingfong
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It has been my experience that the best advice comes from someone who’s “been-there, done that”. I believe the more experienced, the better the advice. When it comes to getting tips on financial planning, I immediately think of Jessica Castro, a beautiful professional with a congenial personality which makes her very approachable to anyone who meets her. Castro currently is the Financial Advisor at First Command Financial Services, Inc. and has been with the company for almost a year. Although she is fairly new to the company, she is no stranger in the world of financial planning services. She has over 17 years of experience in the industry. Her initial start came in 1998 as a Client Associate for an investment firm that catered to high net worth clients. She was the frontline representative of their Guam branch and processed the daily administrative activities of their clients. She learned much about the industry and aspired to one day become a financial advisor. Later, she moved on to another company that administers 401(k) plans, and became the Director of Participant Development and trained participants about the importance of saving for their retirement. Fast forward several years and we find that her goal of becoming a Financial Advisor was achieved after spending many long hours reading, studying, and passing her exams to earn her licenses. In July 2014, she put her certification to work and joined First Command Financial. “At First Command, our mission is ‘Coaching Those Who Serve in Their Pursuit of Financial Security’,” says Castro. “This means that I help our island’s people to fulfill their dreams by creating a simple plan; making adjustments when necessary and provide solid coaching for the years ahead.” The company was also appealing to her because it’s beginnings were triggered by an event that happened on our island. According to Castro, the company’s history began in 1958, when United States Air Force Lt. Col. Carroll Payne worked closely with the families of several crew members that were killed in an aircraft accident on Andersen Air Force Base in Guam. He was saddened by the survivors’ financial difficulties and eager to help other military families effectively prepare for their financial futures. Payne laid down the groundwork of the company that would become First Command. Today, the company provides financial solutions for military families, as well as civilian and federal employees. It is also an employee-owned company whose headquarters are in Fort Worth, Texas. Castro commented that this line of work may not be for everyone. “To be humiliated is to be humble. Putting the well-being of others before your own interest is not only the right thing to do, but it is rewarding by itself ”. She continued, “If you are 14 CasaGuam June 2015
Jessica Castro FINANCIAL ADVISOR FIRST COMMAND FINANCIAL SERVICES
passionate about helping families to fulfill their dreams, this may be the career for you”. She reported that their Guam office is growing and they are currently looking for entrepreneurially–minded candidates. The companies focus consists of Three Cornerstones of Service — Cash Management solutions (checking and savings), Risk Management (life insurance), and Wealth Management (investing). “We do not chase wealth, we create wealth,” said Castro. One of the resources she uses when assisting her clients is CasaGuam Magazine. It is a tool used to create a plan for home ownership. Additionally, when she was in the process of building her home, she turned to the publication for information on land for sale, as well as gathered ideas for home designs. When she is not working, Castro is active in the Guam Council of Women’s Clubs and is currently serving as Secretary. She was President for Soroptimist International of the Marianas in 2013. She also enjoys serving the Lord and the community with her family.
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From the Experts
Make Property Investment Part of Your Retirement Plan
By Joylyn Muñoz
“You are the storyteller of your own life, and you can create your own legend or not.” - Isabel Allende REAL ESTATE, PROPERTY INVESTMENT, and RETIREMENT could be your future! If this caught your attention, then this article is for you. We often find ourselves asking WHEN is the right time to start planning our retirement and HOW do we go about it It’s never too early to start planning your retirement! What is your current retirement plan? Aside from the supplemental plans you may be offered by your employer, there is another way that just might work for you. If you really do your research and put some serious thought into it, the perfect time to start planning your retirement is right out of high school. Some may truly believe there is a retirement treasure in purchasing a piece of property, finding a tenant, and collecting income while they pay off the mortgage. The goal by the time you reach your golden years would be to create a very comfortable lifestyle with the perfect - or near perfect nest egg. If you think about it, do we focus our time and energy on planning our retirement? No, not many of us do. There are those that do start early. These are the lucky ones who have created that very comfortable lifestyle. Most of us start thinking about our retirement in our adult years when we are already mid-way through our careers or even right towards the end. Start now and plan, prepare, and prosper! "Real estate can be a wonderful asset to have in retirement, because when you have tenants, you have money coming in every month and, if you don't have pensions, that's important," says Barbara Pietrowski, a Certified Public Accountant in Roanoke, Virginia, who specializes in rental real estate. Even if you plan to retire very soon, you can still work towards your late-in-life real estate retirement plan. The topic of retirement usually arises during conversations with family, friends, and colleagues, and is often associated with a 401k plan or social security benefits. Retirement can be much more with a variety of options for you using real estate and property investment as part of your retirement plan. Here are a few of the most common and basic options:
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1. Buying and holding for residual income. Stop. Take a moment and think about this and what it could do for you. Imagine if you purchased a duplex with two bedrooms and one bath on each side for $200,000, the mortgage payment for this amount is roughly $1,200 per month. In our current market, two bedroom units average about $650 to $800 per month. Taking into consideration all the expenses like vacancy rates, maintenance fees, and the like associated with this purchase, in the next 30 years, the unit will be 16 CasaGuam June 2015
paid off and the value may be the same or greater, considering the market conditions. Your investment allowed you to make approximately $150,000 and the POSITIVE CASH FLOW that you receive once your unit is paid off is called your “residual income”. 2. Building and selling: Understanding the market conditions will help you foresee where your next purchase would be. This knowledge will help you to understand and plan for your life long real estate investments. You may want to build, develop, and then resell. If planned carefully and properly, you would be able to build at cost, then eventually sell at market value. Again, know and understand your market conditions. The profit you make can be used towards your retirement savings and result in a comfortable and relaxing future after retirement. 3. Buying and selling (also known as “flipping”): We often hear talk about people buying foreclosures or buying property below market value in poor condition. They purchase the property and put money into renovations and eventually resell the property. This is the same with building and selling, and, buying and holding. I recommend you do your homework on the market conditions of your community to determine if it is worth your time, hard work, and money. You do not want to over-improve the property if the surrounding areas are not likened to the same caliber. Imagine a high-end home in an average neighborhood; do not expect a high return just because you spent top dollar on| renovations. If you plan it out right, the nice return on your investment could be deposited into your retirement savings. 4. Research and plan: Ask questions, visit your local bank, talk to your real estate agent, and find out how much you can expect to invest in a property and earn. Do the math and crunch the numbers. While most property investors hope to one day replace their personal effort’s income with cash from their investment properties, most don’t have a plan or strategy to achieve their goal. A real estate agent’s duty is to assist clients in becoming successful in the real estate world. Avail yourself of this information and create your plan of action! The next time you think about RETIREMENT, think of REAL ESTATE! About the Author Joylyn Muñoz is the Principal Broker of Absolute Realty and has been in the real estate industry for eight years. You can contact her at joylyn.munoz@absoluterealtyguam.com or 989-8003.
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H o w To D . I . Y.
5 Traps for DIY Property Managers O
By Samara Bedwell
ne of the most important decisions a landlord will make is whether to manage their rental property themselves or enlist the services of a professional property manager. While DIY property management may sound easy enough, it can actually be quite complex and there are potential traps.
One of the biggest issues facing landlords is the legal implications as risk management is now an important part of property management. If you’re going to do it yourself, you’ll need to a thorough understanding of the tenancy legislation and paper work required. There are also many day-to-day problems that can arise. Common issues that may need to be dealt with are tenants failing to mow the lawn and maintain the gardens, having pets without approval and getting behind in the rent. As many landlords often develop a personal connection with their tenant, they may feel uncomfortable chasing arrears. Property managers, on the other hand, are removed from the emotions. If you are considering managing your own rental property, it’s important to be aware of the pitfalls. Here are five traps to avoid: FAILING TO ASK FOR A BOND This is a security deposit which is held in case the tenant doesn’t meet their obligations under the tenancy agreement, such as causing damage to the property or failing to pay the rent by the vacate date. NOT HAVING A LEASE This is a legally enforceable contract which usually spells out the length of the rental agreement, the amount of rent that will be paid, and the condition the property must be returned in.
done and how much notice must be given to tenants. Failing to issue correct notice can be costly penalties apply. One of the biggest advantages of enlisting a property manager to look after your rental home is peace of mind. They take the hassle out of every step of the process from finding a tenant to collecting the rent, and attending maintenance issues to conducting routine inspections. Although there is a cost involved in using an expert, you are paying for a professional service and the fee is tax deductible.
NOT FILLING OUT A CONDITION REPORT This document describes the standard of repair for the premises and any items included within the premises, such as furniture. It is designed to protect the interests of both parties.
A property manager can also advise you on how to present your property to attract quality tenants and get the best rental return. Even if supply is tight and tenants can be quite choosy – they’re more prepared and starting their search for rental properties earlier.
NOT UNDERSTANDING TENANCY LAWS Property management can be very complex and if landlords don’t comply with the legislation it can lead to fines. There are different Acts legislating tenancies in each state and territory.
So when it comes to property management, think carefully before you decide to go it alone.
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About the Author Samara Bedwell is Property Manager for award winning Queensland builder, Ausbuild. With over 11 years experience in the industry, she manages hundreds of rental properties and knows the secret to attracting quality, long-term tenants and maximising rental returns.
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Curb Appeal
Protecting Your Investment Property By Odessa Martinez ARM, AMS, CMCA, CPS, CPM Candidate
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Acquiring and managing rental property is a popular investment which can have many benefits. Once you make an investment in real estate, taking the appropriate steps to protect that investment will enhance the opportunity for the property to appreciate in value. Although it may seem as simple as finding a tenant and writing up a lease, there are a number of items which need to be considered to protect both you and your investment. Property owners should consult with a lawyer to make sure they are minimizing any possible liabilities. Landlords have been sued for simple slip-and-fall injuries, mildew hazards, and even crimes committed on the property by citing a lack of security. A lawyer can also give you advice on how you should hold ownership of your property. Should you place ownership into an entity such as a LLC (limited liability corporation) to avoid personal liability? Although transferring the property into the LLC may reduce your personal liability in the event of a lawsuit, there are other factors to consider before doing this. If financed, you will need to see if your bank will allow you to transfer the property into the LLC without triggering the “due on sale� clause. Also, keep mind that having too many properties in one LLC, places them all at risk with just one lawsuit. These are all important items and seeking legal advice from your attorney is a very important step to protecting your investment property.
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As a landlord, you must have an airtight lease. The lease is the basis for the relationship between the landlord and the tenant. If anything goes wrong between the landlord and the tenant, the first item produced in court is the lease agreement. It will contain all the basic information such as name, rental amount, lease term, who pays utilities, and due dates. It should also contain any special requirements such as noise regulations, pet restrictions, garbage removal, and parking. Specifics, such as how disputes will be handled, a default clause, and how security deposits are held, must be clearly defined and easy to understand. Federal and local laws may require disclosures for items such as Lead-Based Paint for homes built prior to 1978 and Agency Disclosure (if an Agent). If leasing to military personnel, additional disclosures are required along with onsite inspections to verify that all requirements of the lease are met. Failure to provide your tenants with all the proper legal disclosures required by law is a sure way to end up in trouble, and places your investment property at risk. Landlords must make certain they are complying with local ordinances and regulations. Guam law requires a business rental license and inspections. Maintaining compliance with local regulations is important to preserve the landlord’s ability to enforce a lease, and to avoid a potential code violation. Performing a walkthrough with the tenant prior to occupancy
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is very important. It will detail the condition of the property and will allow the landlord to hold the tenant responsible for damages; and in turn, it will also relieve the tenant from the liability of damages that were pre-existing. It will simplify the move-out process and reduce the possibility of disputes over the return of the tenant’s security deposit. Even the smallest legal dispute can cost time, money, and again put your property at risk. Protect your investment by consulting a reputable insurance agent. An agent will guide you and ensure you have the proper coverage for your situation. Many things can happen to your rental property and many insurance policies do not cover events such as flood, sewage and typhoon. You may not be adequately covered for liability claims if the home is rented; or you may want to consider loss of income coverage in the event the home requires major repairs from a natural disaster. The best solution is to talk with your insurance agent. Make sure they understand your property and your situation in order to ensure you have the right type and amount of coverage to safeguard your investment. Nearly every new property owner will underestimate the cost for general upkeep and repairs. It is strongly recommended that a landlord keep a separate fund for this. If you contribute a specified dollar amount to this fund each month, the financial impact of a major repair will be lessened, and your ability to properly maintain your investment will be easier. It should be no surprise that expenses related to maintaining a property can quickly escalate without regular maintenance and planning. Routine annual inspections and regular service on items such as air-conditioning, water heaters and roof tops, will reduce the possibility of unplanned expenses. When your tenant calls to report a maintenance problem or request repairs, be sure to schedule it within a reasonable amount of time to ensure the problem does not worsen or create a situation which may cause injury or harm to your tenant. A service visit provides you with
the opportunity to inspect the property and attend to other potential problems observed. Remember, keep open communication with your tenants. When a landlord is attentive and responsive, it is less likely that they will damage your property. Hire a professional property manager. When you manage your own properties your liability increases. A property manager understands the rental market and is responsible for helping protect and maximize your property’s Return On Investment (ROI). They understand all the federal and local regulations involved with renting property and can also provide you with maintenance services to ensure your property is maintained. A professional in property management will have the knowledge and skills to prepare a complete assessment of your property and provide you with a plan or goal to safeguard its value both financially and physically. When searching for a Property Manager, be sure to verify that they have adequate insurance coverage in place, such as Liability insurance and Commercial Automobile insurance for vehicles which may be used around your property. Some may even carry extended insurance policies to cover theft of funds in the event of a crime such as an office break-in. When a good property management company is utilized, it reduces your liabilities and helps protect your investment property. Although your investment properties can never be 100% protected, utilizing some of the simple steps described above can reduce the potential for loss of value, loss of income, and lawsuits which may result in complete loss of investment property. About the Author Odessa Martinez is the owner and President of Pacific Rim Management, Inc. and has over 15 years of Property Management and Real Estate experience in the US Mainland and Guam. You can reach her at 685-8322 or 646-7746 if you have any questions for her.
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W h o Ya G o n n a C a l l ?
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Classifieds Commercial Rentals
MongMong-Toto-Maite
Yigo
Ordot-Chalan Pago
Dededo
Economical studio unit. Completely
Single Home. Excellent Condition. 3BD/2BA. Large yard. Good location. $1,400/month or for sale $200K. Call 637-7165/688-0887/689-7700.
Chalan Pago 2bed 1bath SFD for sale. 1169sq.m lot Asking $119K. Call Karen 988-1883
renovated. All ceramic tiles, new cabinets, 106 East Sta. Barbara, Dededo 4bed/1 ba
new split A/C, typhoon shutters & double
corner house, fenced, and gated. Centrally
paned windows. Call Deanna @ 688-2855.
located close to church, school & malls. $1,200/mnth. Call MYRNA @ 488-0144
Piti
Ordot-Chalan Pago
MILITARY APPROVED! 1 & 3 BR Close to Port, Naval Station, Polaris, Park and Beach. Ocean Breeze Apts. Max two tenants. $650 unfurnished. (Price does not include utilities) (Right across the beach!) Call 649-8265 or 727-8265
Commercial space for rent. Approx 850 sq ft., video store or retail business. Asking $850/mo. Please call ANGIE @ 727-2228
Talofofo Executive 2-story house with a great view, fully fenced and a quiet area. 5bd/3ba w/ 2 huge balconies. SS appliances, wash/dry, 2-car garage. Huge storage shed, a must see, Military OK! $3500/mo. Call Joe @ 483-3333!
Residential Sales Barrigada
Two homes for sale! House 1: Full concrete, 2 bed, 1 bath House 2: Semi-concrete, 2 bed, 1 bath Asking $94K for both. Call owner at 727-4985 Two 2BD hse. 1 Full Concrete & 1 semi concrete in one lot. $96K. Negotiable. Call 727-4985.
Residential Rentals Talofofo Agat
Large 4BR/2Ba 1800sqft. House Only 248,000 637-7165 / 688-0887 / 689-3333
Ipan home less than one mile away from 1 & 3 BR in Agat. Ocean View! Renovated. Near Base, Stores, and Schools. Call 649-8265 or 727-8265
Asan
the beach and golf courses. 2 story, for more information.
Tamuning
Nimitz Hill, 2BD apartment including Sunrise D Condo. Large 2BD/2BA. Pool. ocean view. $950/mo. Modern upgraded, all ceramic tiled, typhoon shutters. Call 687-6900
Multi-Family House/Good Investment located front of Dededo Mayor’s Office/Park & Library Greath Neighborhood / Gated/ Corner Lot/Serious Buyers Only! FOR SALE BY OWNER. Call/LvMsg 727-6456
Very nice. 1,000 SqFt. $1,000/month. Call 637-7165/688-0887/689-7700. NEWLY BUILT TAMUNING VILLA HOME
Barrigada 3BD/2BA, 2 carport, fully fenced, basic 2b/1b, near Subway with water $830/mo. Please call 637-7165 / 688-0887 / 689-3333
Dededo
4BD/3BA plus studio. Call 707-6923/4
appliances included (split AC, ref, stove, washer, dryer, heater, drain disposal) $2,500/mo. Call 727-7670 or 988-7671
Harmon
Villa Rosario Condo: 3bd 2ba Excellent Condition, Pool, Tennis Court, Play Ground. Good Location $160,000.00 Call 637-7165/688-0887 Las Palmas Ph3. 3rd Floor. Large 3BD/2.5BA/2Den. Pool. Excellent Condition. $255,000. Call 637-7165 689-3333/688-0887
San Vitores Terrace Condo-2bd/1ba, 3BD/2.5BA Townhouse. Pool. Security. Tennis Court. $1,900/month. Call 637-7165/688-0887/689-7700 Large 4BD/2.5BA. Single home. Pool. Security. Tennis Court. $2,450/month. Call 637-7165/688-0887/689.7700. Harmon Ct. Townhouse. 3BD/2BA. Sec. 8 OK. $1,200/month. Call 637-7165 689-3333/688-0887
3bd/2ba - walking distance to beach, rest/bars, church. Asking $950 -
Pacific Gardens. 1st Floor. Pool. Security. 1BD/1BA. $47,000. Call 637-7165 689-7700/688-0887/689-3333.
Tamuning Exec. 2 Story/Very Spacious For Sale by Owner. Growing in a great location beside Cost-U-Less Tamuning and Guam Premium Outlet. Great lifestyle and community environment with 5bd/3ba corner lot; nice sized bd on 1st and 2nd flr; master suite w/ jacuzzi spa tub; quality granite staircases; red hardwood railings; crown molding all over the house with open spacious kitchen. Dream home and a good investment! Call/LvMsg 727-6456 For Sale $195K Fee Simple. 3BD/2BA Tamuning Condominium Low Common Area Fee @ $50/month. Call Jo 488-4563.
Tumon Tumon View Condo. 2bd 1ba. Near beach. $110,000. Call 637-7165/688-0887/689-333 Lily Village Tumon Condo. Nice. 3BDM 2BA Fully Renovated. $2,000/mo.
$1800/mo. CSR- PB 649-6088
Tumon Blue Pacific Lattice Condo. 2bd/1ba. Backup generator, securted entry, pool, mailbox, room A/C units, stove/oven, refrigerator. Call Deanna @ 688-2855.
For Sale By Owner Summer Palace Estates Located close to Cost-U-Less in Harmon 4Bd/2.5Ba 2100 Sq. Ft. Secured gated community/swimming pool, tennis court, & playground. New granite countertop and tile floor throughout / typhoon shutters. $440,000.00 Please call 777-0951
Land for Sale Yigo 5,545 SQ/MTR Off Rt 1, past Hillside Markiet. Water/power on site, paved access. $300K-negotiable Call 988-7671 or 727-7670
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Closing
Message from the President Ryan DeGuzman 2015 President
Message from the Executive Officer and Government Affairs Director Peggy Araullo Llagas Guam Association of REALTORS®
Guam Association of REALTORS®
Hafa Adai from the District of Columbia, A small delegation from Guam, and representatives across every state and U.S. Territory, gathered together in the thousands to attend our National Association of Realtors (NAR) annual Legislative Meeting and Trade Expo in Washington. Our main objective was to push through important real estate issues with Federal regulators, top industry executives, and members of Congress, so that our voice is heard on the hill, especially on all key issues that impact our real estate businesses, communities and the clients we serve. Here’s a list of our Legislative and Regulatory Priorities: HOMEOWNERSHIP & REAL ESTATE INVESTMENT TAX POLICIES • Mortgage Interest Deduction • Mortgage Debt Cancellation Tax Relief • Capital Gains • 1031 Like-Kind Exchanges CREDIT AND LENDING POLICIES • Credit Availability • GSE (Fannie Mae/Freddie Mac) Restructuring, Liquidity and Lending • FHA Single-Family Mortgage Program • FHA Condominium Requirements BUSINESS OPERATIONS • Dodd-Frank Act Regulations (3% Cap on Fees and Points, RESPA/ TILA Harmonization) • Technology Issues (Data Privacy & Security, Copyright Protections, Net Neutrality, Patent Reform) • Appraiser Independence Regulations Our distinguished panel of government officials and industry experts included: Donna Brazile - Political Strategist, Georgetown University Professor, Actress, and Vice Chair of Voter Registration and Participation of the Democratic National Party Ed Gillespie - Political Strategist, former Counselor to the President, U.S. Senatorial Candidate and Chair of the Republican National Party Ryan O’Hara- Move, Inc. CEO Lawrence Yun - NAR Chief Economist Chris Polychron - NAR President Julian Castro - Secretary of Housing and Urban Development Richard Cordray - Director of the Consumer Financial Protection Bureau There was a wealth of valuable information received at the NAR Conference. It truly gives us insight on some of the changes to be expected in the near future, and reinforces our GAR commitment to serve the best interest of our clients and our island community - nationally and locally. We hope to keep you posted and thank you for this opportunity to share.
New Disclosure Forms Alter Transactions According to the National Association of REALTORS®, major changes are coming to real estate transactions starting August 1st, 2015. Any transaction involving a mortgage will use the new disclosure forms created by the Consumer Financial Protection Bureau (“CFPB”). The Truth-in-Lending Act/RESPA Integrated Disclosures (“TRID”) creates timing requirements for disclosures that lenders need to make to consumers. Not only will the new forms be used in transactions, the relationship between the lender and other parties like the closing agent and the mortgage broker is now altered because the lender can be liable if certain costs exceed the tolerance limitations set forth in the TRID. In addition, the changes may also delay a transaction if certain changes occur near closing, as TRID requires a three-day waiting period prior to closing and certain changes may cause lender delays. TRID Overview Through the Dodd-Frank Act, Congress ordered the creation of TRID in order to improve the loan disclosures made to consumers. TRID combines the prior TILA and RESPA disclosures into two forms: the Loan Estimate and the Closing Disclosure. The new forms are required to be used in all transactions starting August 1st, and cannot be used for transactions prior to that date. TRID contains many intricate requirements for the disclosure forms. More details will be released as the information evolves. Real Estate Professional Takeaway While real estate professionals do not have any direct responsibilities under the TRID, they still have a role in the process. Real estate professionals need to educate their clients about what has changed and help them understand that the transaction will take longer. In addition, clients also need to be educated about the possibility for closing delays and so should be wary of scheduling back-to-back closings, as there is risk that one of the transactions may be delayed. Finally, real estate professionals need to help their clients understand that attempts at last minute negotiations could derail the closing and so the parties should try to have all issues resolved well in advance of closing. In particular, changes made within the three-day waiting could cause a delay to the closing. - National Association of REALTORS® -
The Guam Association of REALTORS® shall remain your leading advocate for promoting and protecting homeownership on Guam. Are you working with a REALTOR®? Visit our website at www.guamrealtors.com.
Sincerely,
GUAM ASSOCIATION OF REALTORS®
Ryan J. De Guzman GAR President "Love, care and serve!"
Suite 236A Julale Center 424 West O'Brien Drive, Hagatna, Guam 96910 Office: (671) 477-4271 • Fax: (671) 477-4275
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The Voice for Real Estate on Guam
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