“Your income and comfort zone are connected. If you want to earn more, you can’t just do the easy stuff.”
– Tom Ferry, #1 Real Estate Coach, NY Times Bestselling Author & Speaker
By Realttorney®
If you are a licensed real estate broker or an accredited real estate salesperson, you know definitely know how challenging and rewarding this profession can be. You have the opportunity to help people find their dream homes, negotiate the best deals, and earn a substantial income. However, you also face a lot of competition, market fluctuations, and client expectations.
While traditional roles in the industry such as real estate sales and leasing continue to be important, there are many other opportunities for real estate brokers and salespersons to explore. As real estate service practitioners, brokers, and salespersons should always be on the lookout for ways to improve their business and achieve long-term success. So, how can you stand out from the crowd and achieve lasting success in this industry?
We have to level up. For accredited real estate salespersons, the level up is to become licensed real estate brokers. For the latter, but not exclusive for them, here are some ways to level up and take advantage of the many opportunities in the Philippines real estate industry beyond sales and leasing:
1. Property management: Real estate brokers and salespersons can expand their services to include property management. Property management involves the day-to-day operations of a property, including maintenance, rent collection, and tenant relations. With the increasing number of properties in the Philippines, there is a growing demand for property management services.
2. Be a licensed Real Estate Consultant: Of course, if you have the relevant experience as a real estate broker, you can review and take the licensure examination to become a licensed real estate consultant so provide you can provide a full range of consulting services to clients. Consulting services may include market analysis, feasibility studies, and financial analysis. These services are especially valuable to clients who are up-and-coming, as well as, seasoned real estate investors and developers.
3. Real estate development: Real estate brokers and salespersons can also become involved in real estate development. Real estate development involves the planning and construction of new properties. Real estate brokers and salespersons can use their knowledge of the market to identify opportunities for development and connect investors with developers. Better still if real estate brokers and/or salespersons can themselves be real estate developers… so long as they know all the pertinent regulatory laws and their rules and regulations.
4. Real estate finance: Real estate brokers and salespersons can also become involved in real estate finance. Real estate finance involves the financing of real estate projects, including mortgages, loans, and other forms of financing. Real estate brokers and salespersons can use their knowledge of the market to connect investors with lenders and other sources of financing. Better still if real estate brokers and/or salespersons can themselves be “hard money” lenders for real estate developers and/or real estate investors.
5. Real estate education: Real estate brokers and salespersons can also become involved in real estate education. Real estate education entails the training and development of real estate professionals. Real estate brokers and salespersons can share their knowledge and expertise with others by teaching courses or providing mentorship. It is up to the practitioner if they want to apply for accreditation as a “Speaker/Lecturer for Real Estate Training and Seminars, Continuing Professional Development (CPD) and Career Progression and Specialization (CPS) Programs” with the PRC-PRBRES.
To conclude, real estate brokers and salespersons in the Philippines have many opportunities to expand their services beyond traditional roles in the industry such as real estate sales and leasing. By exploring opportunities in property management, real estate consulting, real estate development, real estate finance, and real estate education, real estate brokers and sales agents can level up and take advantage of the many opportunities in the Philippines’ real estate industry.
Of course, it takes a lot of planning, and saving up financial resources in order to take the next step and level up to a more profitable career for those real estate service practitioners who are willing to brave it and step out of their comfort zone.
Image source: https://www.leveluprealtors.com/ [I love this website and it is a source of inspiration for me as a licensed real estate broker.]
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Atty. Jojo is a real estate attorney, an estate planning attorney, a licensed real estate broker, and a PRC-accredited Lecturer/ Speaker for Training Programs in Real Estate. He is a Chartered Trust and Estate Planning (CTEP®) professional who is committed to educating Filipinos about the value and importance of having an estate plan in their lives.
“By the taxes he pays, a citizen has every right to demand for a good and honest government.”
– Franklin D. Roosevelt
By Realttorney
Portions of the contents of this article were first published 4 days before its 10th year anniversary – January 12, 2012. It is updated to share the same message to all new and old real estate service practitioners (RESPs) – salespersons, brokers, appraisers, government assessors and consultants of their obligations as professionals.
I wish all licensed RESPs a prosperous and abundant 2022. If we are to believe the “experts” and analysts the real estate industry looks brighter for this year due to the continued vaccination program of government, as the Philippine economy slowly rises up from the pandemic-induced negative growth in 2020.
The boom in the demand for luxury and mid-income residential projects, both in the vertical and horizontal project, means more opportunities for RESPs earn more income in 2022. So, how do we prepare for a better and prosperous 2022?
As the New Year is upon us already, I wish to outline some reminders that need to be performed by all old and new licensed RESPs pursuant to Republic Act No 9646 and its Implementing Rules and Regulations (IRR).
First, in Section 38, Rule IV of the IRR “Real estate service practitioners shall be required to indicate the certificate of registration, professional identification card, Privilege Tax Receipt (PTR) number, AIPO membership and/or receipt number.”
Therefore, all licensed RESPs should get a PTR. It cost around P300.00 and you can get this at your Office of the Treasurer of your LGU. Just say that you will get a PTR when you stand in front of the transaction window of the Treasurer’s Office of the.
What must you bring with you when you apply for a PTR? For veteran RESPs, a photocopy or the original of the PTR of the previous year will suffice. For the new salespersons and brokers, you need bring a photocopy of your Certificate of Registration and the PRC ID Card with you.
It should be noted that the Privilege Tax Receipt mentioned in the IRR is the same as the Professional Tax Receipt mentioned in the Local Government Code. For real estate salespersons, if the PTR is unavailable in your LGU please ask for the Occupational Tax Receipt (OTR).
Second, if you are already registered with the Bureau of Internal Revenue (BIR) then you should pay your annual registration fee of P500.00 using the BIR Form 0605. You can remit the payment at the BIR Revenue District Office (RDO) that you registered in or at the Authorized Agent Banks of the concerned RDO.
Now, if you are still not registered with the BIR then you must do so in order to be compliant with the National Internal Revenue Code of 1998, as amended. It is also our obligation to follow the laws of the Philippines as mandated by the Code of Ethics and Responsibilities promulgated in PRBRES Resolution No. 39, Series of 2019. Hence, BIR registration is a must for all licensed RESPs.
I will quickly outline below, the steps to register with BIR as a self-employed individual (professional):
STEP 1: Secure and fill up BIR Form 1901 – Application for Registration for Self-Employed and Mixed Income Individuals, Estates/Trusts.
STEP 2: Submit the same with the following documentary requirements to the RDO having jurisdiction over the place where you hold office – it could be a home office or a commercial office space.
Documentary Requirements:
Birth certificate (Original and photocopy);
Marriage certificate (Original and photocopy); and
Birth certificate of children (Original and photocopy);
Other documents for submission, if requested:
Mayor’s Permit (Original and photocopy);
Contract of Lease (if renting);
Title/Tax Declaration & SPA/Affidavit of Consent if the location is not owned by applicant (if not renting); and
Sketch of location.
STEP 3: Pay the Annual Registration Fee (P500.00) at the Authorized Agent Banks of the concerned RDO.
STEP 4: Pay Documentary Stamp Tax (DST) [loose DST / BIR Form 2000 for DST on Contract of Lease, etc.). Present proofs of payment upon submission of the documentary requirements.
STEP 5: Submit requirements for Authority to Print (ATP) and registration of books of accounts.
Documentary Requirements:
Accomplished BIR Form 1906;
Job order from the printer;
Final and clear sample of receipt and invoices (machine printed);
Photocopy of Taxpayer Identification Number Card; and
Photocopy of BIR Form 0605 (payment of registration fee).
Book of Accounts:
Cash Receipts;
Cash Disbursement;
Ledger;
Journal;
Subsidiary Sales Journal; and
Subsidiary Purchase Journal [last 2 are additional books for VAT Taxpayer].
STEP 6: Attend the taxpayer’s initial briefing to be conducted by the RDO concerned for new registrants in order to apprise them of their rights and duties/responsibilities as taxpayers.
STEP 7: Wait for the RDO to issue the Certificate of Registration (BIR Form 2303) together with the “Ask for Receipt” notice, Authority to Print and Books of Accounts.
For a more comprehensive discussion on the steps enumerated above including the related revenue issuances promulgated by the BIR and codal references in the National Internal Revenue Code can be found in the BIR website (www.bir.gov.ph).
A final reminder to all new salespersons and brokers reading this article. The tax code states that “all individuals engaged in trade or business shall accomplish and file the application on or before the commencement of business operation or from the day the first (1st) transaction occurred or within thirty (30) days from the application with the LGU for issuance of Mayor’s Permit/Professional Tax Receipt (PTR), which ever comes earlier.”
I encourage newly accredited salespersons and newly licensed real estate brokers to register with the BIR. Furthermore, the Code of Ethics and Responsibility mandates all RESP to register with the BIR. In 2005, Atty. Alexander L. Lacson published his book “12 Little Things Every Filipino Can Do To Help Our Country.” You can buy a copy of his book at his website at www.alexlacson.net.
“PAY YOUR TAXES” is the 10th Little Thing he listed. I quote some portions of what he wrote in pages 75 – 80, which resonates the same message today as if it was written 17 years ago:
“Of the many duties of a citizen under our Constitution, paying taxes is one of the most crucial. Because taxes are the lifeblood of our government, of our nation.
“It is what we use to buy the basic textbooks for our millions of children in the country, or to build additional classrooms in public schools nationwide…
“Taxes are what we use to buy the most basic of medicines, often generic and cheap, that our Department of Health officials distribute to 34 million Filipinos nationwide who live below the poverty line.
“It is what we use to pay all our government employees nationwide – our soldiers, our policemen, our public school teachers, among many others.
x x x
“Viewed in this light, the taxes that you and I pay are actually not lost or wasted completely. A substantial portion of the taxes we pay is still put to good use. Because there are many public servants – not only a few or some – who still do their jobs properly. There are many of them, these honest and faithful ones, but maybe many of them are just in the rank and file, like you and me.
“But they are there. Among the silent many who hold the center and keep our government from falling apart. They are the ones who keep our public institutions intact through storms and scandals, notwithstanding the misguided ambitions and corruption of some of their leaders.
“It is for this reason that we should continue paying our taxes. The good ones in the government are still good reason for us to continue paying our taxes properly. The challenge for us is just how to increase the number of these good ones in government.
x x x
“In 2003, P83 Billion was collected from individual income taxes. But 91% of this amount came from salaried workers from the government and private sector, people who have no choice since their income taxes are withheld mandatorily. Only P7 Billion of P83 Billion (or 9%) came from businessmen and professionals like doctors, lawyers, accountants, architects, and dentists, among others.
x x x
“Can you imagine if our businessmen and professionals pay more income taxes? Or if our government is able to collect 21% this year instead of the 14.1% last year, because we all decided to pay 50% more of taxes this year? This means that our government will have more funds to perform its duties and obligations to the public.
x x x
“But we have to pay our taxes properly. Because we all live in the same country. Because this government, whether we like it or not, is our government. Its cost is a burden we must all share. The task of building this nation is a task that we all must share. We all must contribute to build this kind of nation we dream for ourselves. Each one of us has a role in it. Each one of us has a responsibility to it.”
Third, and final reminder, concerns real estate salespersons and brokers who engage in project selling. If it is your cup of tea to sell subdivision and condominium projects then you are mandated by Presidential Decree No. 957 to register with the Department of Human Settlements and Urban Development (DHSUD), pursuant to existing rules and regulations.
Similar to securing a PTR, the Certificate of Registration must be renewed annually. You can apply at the Main office of DHSUD in Quezon City or at its Regional Offices nearest you place of residence. For licensed real estate brokers wanting to do project selling for the first time or those who are renewing their certificate of registration, kindly prepare for submission the following: (1) photocopy of your PRC ID Card, Certificate of Registration from PRC; (2) previous year’s Official Receipt; (3) recent 2 X 2 ID picture; and (4) surety/cash bond. If you are lucky to have been issued an ID Card by DHSUD then a copy of it can also be submitted. The registration fee is P720.00 if renewed prior to expiration.
Meanwhile, for newly accredited salespersons or those wanting to renew, you need to submit the following: (1) duly accomplished application form – which can be downloaded from the DHSUD website; (2) recent 2 X 2 ID picture; (3) copy of the PRC-issued accreditation card, or PRC-issued O.R. or the claim stub; (4) cash/surety bond; and (5) the Letter of Engagement/Employer for the Broker with these attachments – copies of the PRC ID card of the broker, the DHSUD ID card and the listing of accredited salespersons from PRC under the broker’s name. The registration fee is P288.00 if renewed prior to expiration.
I hope this is useful to you all as we welcome 2022. Happy New Year once again.
“Plan carefully and you will have plenty; if you act too quickly, you will never have enough.”
– Proverbs 21:5, Good News Bible [Today’s English Version]
By Ernesto C. Perez II
You would think that having a creative and distinguished business name as well as an appropriate business vehicle chosen will bring us one step closer to registering our business with DTI and BIR.
Unfortunately, we still have one more step to go. It is a long process but a necessary step to take. The next step is writing a business plan.
You may think that preparing a business plan doesn’t apply to you because of the experience you have in the brokerage business. But for those who are still new and inexperienced or those who are engaged full-time because this is the only source of income they have then preparing and having a business plan is essential.
I am not experienced in preparing business plans. In fact, I have several ventures that have failed mainly because of the lack of such a plan.
There are numerous websites that guide you through the preparation of a business plan. You can hire a professional to assist you in preparing one. No matter what method you choose the important thing is to make a plan that is thoroughly researched.
A final note if you will permit me. In the book of Donald Trump and Robert Kiyosaki entitled “Mida’s Touch: Why Some Entrepreneurs Get Rich And Why Most Don’t” they discussed their failures and how they learned from their numerous failures that made them succeed.
In preparing your business plan, I would suggest that you plan to fail. This is not to say that you have to set small goals for yourself.
By all means, think big! Plan for your outright success. But temper it with the knowledge that the best laid-out plan does not usually go according to what is written.
There will be numerous bumps on the road. I am still on the bumpy part. Therefore, plan to make adjustments so that you will not be heavily frustrated when things do not happen as planned.
Facing disappointments and experiencing failures when you thought you have covered all bases is the worst feeling of all. I am well acquainted with such failures and disappointments.
You need a business plan that is flexible to give you room to adjust your goals accordingly and know what to do when faced with adversities. Once you have made your business plan you are now ready to register your business.
I have outlined what requirements are needed when you are ready to register your business with the various agencies of the local and national government. You can read it in my previous post.
“…select the business format that reflects your needs and circumstances. Then… become acquainted with the logistics and procedures for the format you have chosen.”
– Steve Marr
By Ernesto C. Perez II
Currently, most licensed real estate service practitioners practice their profession on their own. It’s a form of business called single proprietorship. It is easier to set up and you are your own boss and not accountable to anyone else.
The disadvantage of being on your own is that the growth of the business is limited by your financial capacities. Also, since we all have the same twenty-four (24) hours in a day the deals you can work on are likewise limited to how you can effectively manage your time. The demands on the owner’s personal time is so much more demanding.
But, I want you to consider the possibility of entering into a partnership with fellow licensed real estate service practitioners. Because of RESA, we can now choose to enter into general professional partnerships with our fellow licensed real estate service practitioners and register the same with the Securities and Exchange Commission (SEC). It is the same with that of accounting, engineering and law firms.
Setting up a partnership is also quite easy. You can have more resources – time and financials – depending on how many partners agree to join the partnership. If you choose this form then you must learn the Law on Partnerships under the New Civil Code of the Philippines.
The main disadvantage of a partnership is that a rift between any of the partners may cause the dissolution of the partnership. Another disadvantage is the equal profit sharing despite unequal attention and time given by the partners to the business of the partnership.
The last form of business licensed real estate service practitioners may choose as their vehicle for business is a corporation. If the service that will be provided by the group is more than the usual brokerage or if the professionals would want maximum potential for business growth in the chosen market segment then a corporation may be the best form of business.
In a corporation, you need at least five (5) individuals to form one. The good thing is that the liability of each stockholder is limited to his share in the capital, unlike that of a partnership and most especially that of a single proprietorship.
Furthermore, petty quarrels or differences will not dissolve the corporation unlike that of a partnership. There is an increased chance that the group can all help together to consummate more transactions compared to a single proprietorship and partnership.
Finally, it can be said that a corporation provides a better tax shelter for individuals in comparison to sole proprietorship and partnerships.
However, the process of setting up a corporation is more tedious than the first two business forms we discussed above. Also, earnings from a particular transaction may not be immediately “cashed in” by the stockholders. They need to undergo another tedious process of declaring a cash dividend. For that, a lawyer must be consulted to prepare the necessary documents.
So, whatever particular form of business you choose to practice our profession one thing is certain, the level and quality of service we provide will be the ultimate barometer of success.
“What’s in a name? That which we call a rose by any other name would smell as sweet.”
– William Shakespeare
By Ernesto C. Perez II
If real estate brokerage is your passion then what is the next step on how to register your real estate business? You got to determine the name of your business.
You have to be more deliberate and circumspect when it comes to choosing a business name. Ian Gordon – the Startupdaddy – has this to say about choosing a name for your business:
“While you don’t have to factor in things like people in your past that had that name, in-laws, and what will happen to your business on the playground, with your child, once you decide that you like the name, you’re done. Not so with your business.
“With a business you need to go much further. You need to find out if there are other businesses with that name, and if so, if they are in your industry. Is the trademark available? Is the domain name available? Does it mean the same thing to others as it does to you? The list goes on.”
In short, Mr. Gordon says to choose a name with meaning. But he adds that you want to avoid anything too generic. You need to strike a balance between creative and descriptive, so when people hear the name, they remember it and they have at least a vague idea about what you do.
It is so easy to name your business using your name or the initials of your name. There is nothing striking with “Juan Dela Cruz Realty Brokerage” or “JDC Realty & Marketing Enterprise.”
Hence, I do suggest that you be more creative. You have to think of a name that will stand out to your clients but at the same time means something to you as well as what the business does.
Take the example of the business name “realttorney.” It is a marriage of two professions – licensed real estate broker and lawyer. I am both that is why I came up with such a name.
I think it’s catchy and at the same time descriptive of what I do as well as the service I provide. Moreover, in my opinion, I think it distinguishes me from my fellow licensed real estate brokers who are not lawyers.
Finally, it is very bothersome and also costly to change your business name if you don’t get it right the first time. Once, you register the name you chose with the Department of Trade and Industry (DTI) then there should be no turning back.
I promise you the time you spent on thinking things thoroughly on this step will pay off big dividends in the future as you grow and nurture your business. Try it out.
