REAL ESTATE
April 22-28, 2021
SM Prime sets P80-billion capex this year
20
At 60 do I s�ll want to own a house?
Caller: Hi Ken, I have been following your columns for many years and they are very informative and delightful. I am turning 60 and wanting to buy a in Capiz. By Jeanne Michael Penaranda home again, I am retiring in a couple more years and The company also aims to launch 15,000 would like your opinion on this subject. I sold my PASIG CITY – SM Prime Holdings, to 20,000 residential units with its primary house in 2006 because I read your article about cashing out profits because the market was getting too hot Inc. (SM Prime) has earmarked P80 bil- residential business segment, SM Developand a possible melt down in the RE market is inevilion for capital expenditures this year to ment Corp. (SMDC), sustaining its growth table. I am really grateful that I followed my instinct boost mainly its mall and residential busi- in the previous year amidst the pandemic. and sold it back then. I have been renting at a very Meanwhile, SM Prime will continue ness segments with due consideration to the low price since, there are only two of us and our chilchallenges brought about by the coronavi- assisting the national government in its efdren are all grown already. I am very happy now but been getting a lot of solicitation to buy a house from forts to combat the spread of Covid-19 in rus disease 2019 (Covid-19) pandemic. different people. Please give me your honest opinion. “We all know that the Covid-19 pan- the Philippines, primarily in key areas such Ken: Thanks so much for the message and I am so happy that at least one person demic continues to challenge many compa- as Metro Manila, Bulacan, Cavite, Rizal, did listen to my advice back then when the entire market was ignoring any signs of nies around the globe, including SM Prime, and Laguna where the number of cases are a huge bubble. Since both of you are retied and I feel like your retirement income but we remain committed to enhance the still high. will just eat away any possibility of both of you enjoying your retirement. I am going to suggest that you just continue to rent. Your retirement income is enough for a “At the same time, we will continue value of your company for the benefit of all descent rental apartment but not enough for a descent home mortgage payment, you our stakeholders,” SM Prime president Jef- exploring opportunistic acquisitions and/ do have savings for a down payment but I wanted you to keep that deposit as your or investments that are well within our core frey Lim said in a statement, emergency funds, if you deplete your savings put in into a house and still have to pay This 2021, SM Prime is scheduled to competencies and expand further in promore than half of your retirement into a mortgage. I am afraid that it might be too open three new malls in the Philippines vincial areas where we can operate,” Lim tight for you, what if you have to fix something and keep up with the maintenance of the house? With a house you will be left with a very little spendable income and provided that quarantine measures are added. almost no emergency funds. In the coming weeks, SM Prime will eased and with utmost concern for people’s I suggest for you to continue to rent, keep the savings and enjoy your full retirestart rolling out its vaccination program safety. ment in a couple of years. If my calculations are correct you can enjoy a minimum Lim said two of the three new SM malls among its employees to protect them from of one trip back home to the Philippines every year with plenty of pasalubong (gifts) are located in Luzon –the SM City Daet in Covid-19. and at least 2-3 small weekend trips locally. The Trump government is coming with a tax break that will benefit renters to stay as tenants, I will keep an eye and report to It has committed to donate a portion of Camarines Norte and the SM City Grand you once the law passes. Central in Caloocan City. The third mall lo- the vaccines it procured to the national govCaller: I have a home in Whittier and there is a lot of equity in the house. I got cated in the Visayas is the SM City Roxas ernment to support its program divorced and I get to keep the house and the mortgage. I am retired and only working part time therefore my total income is less than $1500 a month. I need about $40,000 to keep my property updated and make it livable. Can you help me refinance my home loan and get me some cash out? Ken: I have been talking to this caller for about 6 months, initially I already requested her to get a line of credit from a Credit Union to fix her roof and garage because it was so bad that you can actually see the sky thru holes in the garage. I had mention to her prior that she will not be able New Funeral home with Reception Center Flower Shop to get descent financing even though she has about $350K Beautiful Garden Memorial Park Cremation Services equity in the house. Her actual retirement income is not enough for her to qualify for any amount. She can’t even We transfer your loved ones to and from the Philippines qualify for her own existing loan. She did get a $25K line of credit that was good prior but because she was so worried to borrow more money back then, she just opt to get $25K out, now that she realized that she needed more work on the house, she is left with no other option. She does not want to sell because she has been there for over 40 years but now she can’t take any of the equity out because she can’t qualify. This is a very common situation now, where retired homeowners have all their equity invested in their homes but they can’t use the equity. They are struggling check to check and have no other way to enjoy the fruits of their labor. Retired homeowners are also very conservative where they don’t want to keep taking money out, they are old school investors and they still believe in savings and paying off home mortgages. Here is a dash of this new century mentality into that thought. If that was me, I would sell the house and use the proceeds to buy smaller house cash and enjoy the rest of the money slowly. I have to assume I still have a descent retirement income and that money is to basically do longer trips and enjoy better thing in life while I can. But of course, TTT BBBBBBBBB NNN FFFFFFF HHHH RRRRRRRRR CCCCCC CCCCCCC LLLL for me easier said than done, these homeowners might have a lot of emotional attachments and memories towards this real estate hence, would not like to let go. I seriously understand, but I also see them struggling and settling for a lot less than what they deserve. We all work hard and our efforts deserve to be compensated regardless of mistakes done or mishaps, hard work is still hard work and can’t be replaced. My advice to more mature homeowners, a house turns into a home when you live in it. You should consider other change to suit your financial needs and change is good. Thanks for your comments and support, please feel free to call Ken Go at 1st Innovative Finance Group at 562-508-7048 or write to kennethgo@verizon. net. BRE 01021223 NMLS 238636
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