Which Is Better: Rent-To-Own or In-House Financing?

Wazzup Pilipinas!

Top property marketplace Lamudi Philippines compares common housing payment schemes to let buyers choose which one suits them best

In a bid to provide end-to-end service to all home-hunters, Lamudi continues to share assistance through valuable information that will arm investors in their real estate transactions. Before you head on to the Lamudi Affordable Housing Fair and browse properties you can soon own, know first which the best option is: rent to own or in-house financing?



Rent-to-Own

Rent-to-own or lease-to-buy is an agreement that guarantees a renter the option of buying a leased property within a pre-arranged duration. Basically, it is being able to rent a home that you can buy at some stage in the rental period. A well-drafted contract is key in rent-to-own terms. Both parties must consent to the specifics, including rental rates plus rent-to-own premium, purchase date, duration of lease term, actual sale price, and all other essential clauses that must be finalized.

A rent-to-own scheme is appropriate for buyers who cannot afford to pay for a huge down-payment in one go as the duration of the lease—which normally lasts for two or more years—allows them to save enough cash and build their creditworthiness. For some people, owning a home is much for feasible this way.

One advantage of a rent-to-own transaction is that the buyer can lock the property’s present price even though the actual purchase may happen after the end of the lease term. In addition, in the event that you find the property or the neighborhood unsuitable, you can also decide to leave the property at the end of the lease term and look elsewhere. However, there are a number of caveats that must be considered before jumping into the rent-to-own bandwagon.

It is normally stipulated in the rent-to-own contract that the lessor/buyer will pay a rent-to-own premium on top of the monthly rent. For example, if the monthly rent of a certain condo in Makati is Php25,000, the rent-to-own contract may stipulate that the lessor/buyer will pay an additional Php8,000 per month as rent-to-own premium. This premium will make up part of the eventual down-payment at the time the lessor is to buy the property per the contract. If the lessor has paid 24 months of rent-to-own premium, they have accumulated a total of Php192,000.

Furthermore, as the intention to buy the property is already stipulated in the contract, the lessor agrees that they will eventually make the purchase upon the expiration of the lease term. If they don’t, then the contract may also stipulate that all rent-to-own premium paid will be forfeited.



In-house Financing

For buyers who want to pay for their properties in a series of installments without availing the offerings of third-party institutions, such as banks and other lenders, real estate developers also offer in-house financing.

Technically in-house financing is not considered a loan but an extended way of payment. Application is easy as developers are generally less stringent than commercial banks; with just valid identifications and enough proof of income you can already purchase a property. This usually applies to pre-selling projects of various developers for faster take-up. Likewise, many developers do not offer financing for move-in-ready units.

The setback is steeper interest rates and shorter payment terms. The high and fixed interest fees offered by real estate developers are way above the normal range accessible in banks. Payment duration offered is also shorter than the usual 10 to 15 years in banks or the up to 30 years offering of Pag-IBIG Fund.

Before finally deciding to enter a big financial commitment like real estate mortgages, it is very important to evaluate your current financial standing to be able to decide which term best fits your needs. If fast, worry-free, and easily approved scheme is your best bet, then in-house financing will work for you. Alternatively, if you prefer to move-in right away and rent a home that you can eventually buy, then gear up and find the best rent-to-own properties up for grabs at the Lamudi Affordable Housing Fair.



Lamudi Affordable Housing Fair

Slated to happen on July 15 and 16 at the Glorietta 3 Activity Center in Makati City, the Lamudi Affordable Housing Fair will display a wide-range of value-for-money properties with the easiest payment terms. The event is also packed with exclusive discounts and exciting freebies and promos can also be yours at the two-day housing fair.

Foreclosed property auctions, virtual reality in real estate, home-buying seminars, and forums facilitated by experts will simultaneously happen at the event.

The first Lamudi Housing Fair was successfully held November of last year and was attended by more than 5,000 visitors. The upcoming housing edition focusing on reasonably priced properties is expecting more attendees.


To know more about the Lamudi Affordable Housing Fair, visit http://www.lamudi.com.ph/events

Batibot Now on App Store

Wazzup Pilipinas!

Educational app develops essential thinking skills among children

Parents using iOS-powered smartphones and tablets can now download for free the Batibot mobile application, an interactive version of the beloved TV show that helps enhance learning among children.

Earlier launched on the Android platform, the app features fun games that teach kids basic learning concepts like matching, sorting, and grouping. The app also lets children practice tracing letters with the proper strokes, and helps them identify shapes, colors, numbers, and letter sounds.

The app’s “Awiting Batibot” feature enables kids to sing along to Batibot songs, while “Kuwentong Batibot” contains local stories that promote good values.

What makes the Batibot app stand out from other educational apps is that it is the only app in the Filipino language that is aligned with the kindergarten curriculum of the Department of Education.

The Batibot app is the product of a collaboration among Smart Communications, Community of Learners Foundation, and developer startup OrangeFix. The app jumpstarted Smart’s efforts to work with various communities and organizations to create literacy apps in local languages.

One Year On: Filipino Social Enterprises Better Equipped to Improve Quality of Education Following Completion of SAP Social Sabbatical Program

Wazzup Pilipinas!

Following the completion of SAP Social Sabbatical Program in the Philippines last year, two participating social enterprises, Teach for the Philippines and Silid Aralan (SAI), reported that their organizations are better able to fulfill their respective missions to improve the quality of education for underprivileged Filipinos.

The program, which ran in the Philippines last year with the aim to help local social enterprises overcome pressing organizations challenges and barriers to growth, has helped SAI and Teach for the Philippines to develop a sustainable business model, allowing these two organizations to maintain more efficient business processes both internally and externally, thereby giving the management more time to focus their efforts on driving outcomes based on their respective mandates.

According to Arcie Mallari, founder and executive director of SAI, the organization previously faced issues in recruiting volunteers. Prior to the SAP Social Sabbatical program, its staffs were also not equipped with the knowledge or skillsets to efficiently manage its resources.

By participating in the SAP Social Sabbatical program as an organization beneficiary, SAI was able to better gain insights on how their resources were being deployed and identify operational areas which were not getting the right amount of support, which then helped the management to acknowledge the need to employ more talents and gain more resources at the right time.

With the support of SAP employee volunteers through the SAP Social Sabbatical initiative, SAI was able to better develop a sustainable operating framework that brings a higher level of organization and sustainability for the organization. The social enterprise can now also function better in fulfilling its mission of boosting the academic performance of low performing and underprivileged students through a more effective and systematized set-up for its tutorial programs.

“SAI has plans to expand our organization and business. We aspire to develop learning hubs across the country by the year 2020. This year, we are putting up learning hubs in seven regions from Luzon, Visayas, and Mindanao. This endeavor was made possible partly because SAP Social Sabbatical team helped us improve our business model. Through the program, the SAP employee volunteers helped us develop a ‘Franchise Kit’ that we present to potential partners. They had also linked us to possible sponsors. Now, SAI is also more financially stable,” added Mallari.

Meanwhile, SAP also conducted a brand audit focused on further enriching the branding and marketing aspects of Teach for the Philippines. According to Clarissa Isabelle Delgado, co-founder and CEO of Teach Philippines, the brand review allowed them to learn new ideas that have aided them on how they can evolve the organization.

Since Teach for the Philippines enlists young professionals to mentor students in public schools, especially in remote areas in the country, the Social Sabbatical program improved their knowledge on how and what needs to be done to further promote its advocacy. This new-found understanding of the organization’s branding and marketing systems enabled them to create conversations about the social enterprise and its objectives and, in turn, encouraged more volunteers to join their ranks.

“It was helpful to have a third-party review our processes. The full brand review allowed us to have a new baseline to jumpstart conversations among our team on how we want Teach for the Philippines to evolve and improve in our communications – internally and externally,” added Delgado.

SAI and Teach for the Philippines are two social enterprises that aim to address prevailing issues that impede in the education of Filipinos despite the country’s high literacy rate.

While the country’s literacy rate is at 98.1 percent, according to the latest available data from the Philippine Statistics Authority (PSA) as of 2013, there has been an increase in the issues that limit the learning capacity of students.

In 2015, Philippine Statistics Authority (PSA) revealed that 1 in every 10 Filipinos, aged 6 to 24, was out-of-school or 24 million Filipinos are experiencing hindrances to education due to various reasons. Among the top barriers to education are insufficient family income, the high cost of education and, a lack of interest in schooling.

For its part, SAP Social Sabbatical aspires to reach out to more social enterprises in the country to help them with their advocacies. The SAP Social Sabbatical is a unique program for SAP employees to contribute their time and expertise to assist in empowering organizations in the education or entrepreneurship sector in emerging markets, including assistance in strengthening their leadership competencies, cross industry sector know-how and intercultural sensitivity. Following the successful completion of the program in 2015, SAP is looking at continuing the efforts of supporting local organizations in the Philippines in 2018.

“SAP has long been dedicated to creating ways to help relevant social organizations, in any way that it can. SAP Social Sabbatical is our way of contributing a lasting impact to the society. This is also a big help to our country, especially in further improving education,” said Ryan Poggi, Managing Director, SAP Philippines.