Advice

Tourism in Papua New Guinea
Tourism in Papua New Guinea
June 23, 2022, 6:29 a.m.
Advice
Lifestyle
Tourism in PNG attracts an increasing number of visitors annually, who visit the diverse landscape and culture that Papua New Guinea has to offer. From wildlife, nature hikes, and some spectacular diving, there is a range of excellent tourist destinations in PNG including Port Moresby, and provincial destinations.Within Port MoresbyPort Moresby Nature ParkThe Port Moresby Nature Park is home to some of PNGs most popular wildlife, many of which are endangered species and unique to PNG. These include the Tenkile Tree Kangaroo and PNG’s national bird, the Raggiana Bird of Paradise.Formerly the Port Moresby Botanical Gardens, the park is also home to a variety of PNGs unique flora, spread over 30 hectares. It is a popular recreational destination for families and is in high demand for special events such as weddings. Amenities include ‘hauswins’ (garden houses), barbecue facilities, and a café.Image Source: tripadvisor.com Adventure Park - Port MoresbyThe Adventure Park has similar amenities and attractions to Nature Park. Spread across well-kept grounds and gardens, the Adventure Park is home to domesticated farm animals, Victoria Crowned pigeons, tree kangaroos, wallabies, a saltwater crocodile, Birds of Paradise, and a collection of other animals. Adventure Park is a 20-minute drive from Port Moresby on Sogeri Road. Within Driving distance of Port MoresbyBeaches near Port MoresbyAll along the PNG Central Province coastline, there are some beautiful beaches to visit.There are various popular beach spots on Magi Highway and Napa Napa Road, not more than an hour’s drive in both directions. These often have a small resort or clubhouse attached nearby. There is also Taurama Bay with numerous beaches and some good surfing options.Other excellent beaches to look out for include March Girls Resort with its black sandy beach, Konebada Resort (which offers island fishing trips), Sunset Lodge, Boera, and Tutu Beach Resort.An island charter to beautiful islands, such as Fisherman’s Island, just off the coast of Port Moresby is also possible via the PNG Game Fishing Club’s 70-foot passenger boat. Bookings are made with the Yacht Club.Walking / Hiking in PNGThe best hiking in PNG is no doubt in the hinterlands of Sogeri, less than an hour from Port Moresby.The Sogeri Plateau has some of the most beautiful scenery which can be enjoyed from several picnic spots. This is also the Central Province end of the famous Kokoda Trail, used by allied troops during WWII, and is PNGs most popular hiking tourist attraction.Some small Port Moresby-based groups organise weekend hikes over the provincial border into the Oro Province, or offer shorter walks within Sogeri. Motels at Sogeri also offer hiking and camping trips.Variarata National ParkPort Moresby’s only national park is Variarata, located in Sogeri. Visitors can take bush walks, engage in bird watching and encounter local wildlife. Numerous look-outs offer breathtaking views of the Central Province and Port Moresby, while picnic facilities provide a great option for a family day outing.Loloata IslandThis luxury cashless island resort is one of the highest-ranking in Oceania, with high-class dining and accommodation.Located 45 minutes by car from Port Moresby on the Magi Highway, visitors leave their vehicles at Tahira and board a ferry to Loloata Island. The area is also a marine reserve with mangrove sanctuaries and offers 29 dive sites at the edge of the Papuan Barrier Reef.Provincial Destinations in PNGTawali ResortMilne Bay has some of the best diving and beaches in Papua New Guinea, and Tawali Resort is undoubtedly an excellent location to enjoy these. Located at the southeastern most tip of Papua New Guinea’s mainland, and 90 minutes out of Alotau Town, the resort offers fishing, hiking, land and island tours showcasing the province’s culture and warfare history. TufiAnother top diving destination, Tufi’s location and setting provide for great diving all year round.Situated within tropical fjords, surrounded by rainforest-covered mountains and panoramic ocean views, Tufi offers a unique blend of the best landscapes and scenery in PNG.
Gyms In Papua New Guinea
Gyms In Papua New Guinea
June 6, 2022, 5:09 p.m.
Advice
Lifestyle
Gyms in PNG are provided by many apartment blocks but there are also several well-equipped gyms in the capital city with several excellent private gym memberships available.Image Source: pngpomlife.comRoyal Papua Yacht ClubWebsite: www.rpyc.com.pg/gym/ Operating Hours: Monday to Friday - 5am and 9pm, Weekends - 6am to 6pm.Fees: K300 per annum, open to RPYC members only. The RPYC gymnasium is one of the most exclusive in the country, offering various cardiovascular equipment, machine weights and free weights, and a range of classes and personal training sessions.Classes include pilates, kickboxing, powerfit, belly dancing, zumba, rip 60, circuit training and yoga.Aviat ClubWebsite: www.aviat.com.pg Operating Hours: Daily 5:30am - 8pmFees: K750 annually, open to Aviat members onlyThe Aviat Club gymnasium is a well-equipped, members-only gym. As well as offering a wide variety of fitness apparatus, it also has squash courts, tennis courts, and a boxing area with a punching bag. Personal trainers are available on request, but there are currently no classes available during the COVID-19 measures.Life GymOperating Hours: Monday to Saturday 5am - 9pm, Sunday 7am to 7pm.Fees: K1,586 per annum on a pro rata basis, and walk-in K40 per dayLife Gym is centrally located at the Holiday Inn, Waigani, and is open to both members and non-members. It has various fitness equipment, including weights, treadmills and rowing machines, and offers a range of classes from full-body workouts to yoga classes.Image Source: www.facebook.com/lifegymnasiumLaguna HotelOperating Hours: Daily 5am to 9pmFees: 2,500 per annum or K310 per month. Walk-in rate K50 per day.The gym at the Laguna Hotel is modern, spacious and well equipped. Personal trainers are on hand, and yoga classes run every Tuesday.Stanley Hotel Operating Hours: Daily 5am - 10pmFees: K3,300 annually, K1,750 for 6 months and K950 for 3 months. Part-time options are available for use between 9am and 3pm.Located on the 5th floor of the Stanley Hotel adjacent to the pool, the Fitness Centre offers a full range of aerobic machines, free weights and cable weights. Members also have access to the outside pool. There are no walk-in options and currently no classes available due to COVID-19.Airways Health and Fitness CentreOperating Hours: Daily 5:30am - 10pm. Fees: K3,500 per annum, or K500 per month. Free access to the gym is available for hotel guests.Airways Health and Fitness Centre is one of Port Moresby’s most modern and exclusive fitness facilities with a fully equipped gym, squash courts, tennis court, infinity lap pool, sauna, and steam rooms.Personal trainers are available during the day, and there are several classes, such as boxing, circuit training and mixed fitness included in the membership fees.
Social Clubs In Papua New Guinea
Social Clubs In Papua New Guinea
June 7, 2022, 5:56 a.m.
Advice
Lifestyle
Social and sporting clubs are a long-standing tradition in PNG. Clubs offer a chance for Papua New Guinea residents to meet, socialise and enjoy shared passions; from squash, golf, snooker, tennis, yachting, and just enjoying a drink with friends, PNG’s clubs offer something for everyone.Aviat Sporting And Social ClubWebsite: www.aviat.com.pg How to Apply for Membership: Email [email protected] for the latest application form.Membership Costs (2021 year): Individual: K1,900 per annum, plus K750 nomination feeFamily: K3,290 per annum, plus K1,300 nomination feeNote that Aviat will invoice on a pro-rata basis for the remaining months of the year.Opening Hours: 10am to midnight DailyEstablished in 1948, the Aviat Sporting and Social  Club is a family-friendly club catering to sports lovers and those seeking a relaxed time socialising in friendly surroundings. The club is extremely welcoming of families and provides a fantastic pool, kids playground, and regular events for kids - such as movie nights. The club hosts a range of additional member events, including wine tasting, trivia nights, Christmas in July, snooker competitions, Sunday afternoon BBQ, and Friday night football on the big screen.Member facilities include:Swimming Pool2 Squash Courts2 Tennis Courts2 Snooker TablesBar (air-conditioned)RestaurantPoker machinesGarden barRoyal Papua Yacht ClubWebsite: www.rpyc.com.pg How to Apply for Membership: Download the membership form from the RPYC website. All applications require a nominator and a seconder who are existing financial (voting) members.Membership Costs (2021 year): Various forms of membership are available:Single: K3,300 including initial nomination fee)Family: K4,300 including initial nomination fee)Cadet: K145Gymnasium: K300Opening Hours: 8am to 11pm DailyThe Royal Papua Yacht Club (RPYC), established in 1921, is located in Konedobu, a few minutes from the Port Moresby CBD. The club’s key feature is a 256 berth marina which can accommodate boats up to 30 meters in length. RPYC also has various intra-clubs to suit water enthusiasts, including game fishing, junior sailing and water skiing.The RPYC is not just for boating; the club is a central meeting spot for tight-knit international residents. Members enjoy a range of amenities, including a bar, popular restaurant (MacDhui), beer garden, Sails Café, Children’s Splash Park, a well-equipped gym, and even onsite laundry facilities for those living on their boat! The venue is also popular for private and corporate events, with a maximum capacity for over 400 guests and a stunning view over the marina. There is a wide range of activities to engage members, including kids discos, pool competitions, arts and craft markets, and social events. Royal Port Moresby Golf ClubWebsite: www.royalpomgolf.com How to Apply for Membership: Download the membership form from the RPMCG website. All applications require a proposer and a seconder who are existing financial (voting) members.Membership Costs (Accurate for 2020): CategoryEntrance FeeAnnual SubscriptionHalf YearFull PlayingK2,000K3,600K1,800FamilyK2,000K5,380K2,690MidweekK2,000K2,700K1,350OverseasN/AK1,210N/ASocialK490K920N/ASocial SpouseN/AK190N/AJunior 6 to 18K130K290N/AOperating Hours: Golf Course: Weekdays 8am to 5pm, Weekends 6am to 5pm. Club: Weekdays 8am to 10pm, Weekends 6am to 11pm. Driving Range: 8am to 9pm, 7 days a week.The Royal Port Moresby Golf Club (RPMCG) has been in existence since 1930 and hosts the Papua New Guinea Open. The club boasts an 18 hole championship golf course, eight-bay covered driving range with solar lighting until 9pm, and a short-game practise facility with a putting green and chipping greens. For keen golfers living in Port Moresby, the RPMGC is a golfer's dream. The world-class championship course is located just 15 minutes from the Port Moresby CBD and provides enough challenges for seasoned professionals while it is also welcoming for beginners. The course has an abundance of water traps, and in keeping with the ‘land of the unexpected’, golfers must not get too close as crocodiles reside in these pools! The club offers a range of competitions, from corporate sponsored events, club and national championships, and club pennant competitions.After a round of golf, members and guests may use the changing and locker rooms and then head to the Hideout Café for a cold beer, food and pokies (slot machines) room. There is also a range of social events for members to enjoy.  Other Sports Clubs in PNGPort Moresby has several other clubs to satisfy the hobbies and leisure activities of residents. These include: Port Moresby Gun Club: www.facebook.com/pomgunclub/South Pacific Motor Sports Club (otherwise known as the “Car Club”: www.spmsc.org.pg/Port Moresby Game Fishing Club: www.facebook.com/PMGFC/Port Moresby Racquet Club:(20+) Port Moresby Racquets Club | FacebookHow to apply for membership: Either email - [email protected] or visit the venue along Bava Street, next to Pom Grammar School and get a copy of the membership form at the clubhouse. Membership Fees: Non-member court fees - K40.00CategoryDescriptionFull YearHalf YearExclusive FamilyFamily including kids up to 18 years (exclu court light fees)K2,400K1,500Exclusive SingleCourt fees included (exclu court light fees)K1,700K1,000Familyexcluding court and light feesK400K300Single Adultexcluding court and light feesK260K200Juniors/ Studentsexcluding court and light feesK100K50SocialNo voting & office-bearer rights (non-member court fees)K130K65Country M/ShipResiding 100km away from POMK130K65The Port Moresby Racquet Club has been operating since the 1970s and provides a popular venue for squash and tennis players to play, whether in social gatherings or competitive levels.The courts were rebuilt for the 2015 Pacific Games and provide quality synthetic grass surfaces to play on.Located along Bava Street, Boroko; the club attracts members from across the city and even outside of city limits to the club every day. The club is bustling in the evenings with kids training sessions after school and social matches for the 9-5 workers into the night. Other social events are hosted at the club welcoming everyone to take part in a family-friendly setting.
Where to go shopping in Papua New Guinea
Where to go shopping in Papua New Guinea
June 23, 2022, 6:30 a.m.
Advice
Lifestyle
Major Malls And Shopping Centres in PNGVision City Mega MallWebsite: www.visioncitypng.com Location: Corner of Waigani Drive and Sir John Guise Drive, WaiganiContact: +675 302 8555Operating Hours: 9am to 10pm DailyVision City Mega Mall, or “VC”, in Waigani is next to the Stanley Hotel and across the road from the Sir John Guise Stadium. VC is PNG’s most extensive shopping complex, housing more than 70 shops covering over 45,000 square meters of floor space. On offer are a supermarket, pharmacies, electronics, clothing and fashion, homewares, airlines and travel agencies. There is a wide range of restaurants, from steak houses to authentic Chinese dining, to noodle bars and pizzerias.On the top floor are a three-screen cinema complex and the popular Cosmopolitan nightclub.There is undercover parking with access to a car valet and free open-air parking too.Waterfront MallLocation: Champions Parade, KonedobuContact: +675 305 8600Email: [email protected] Hours: 8am to 8pm DailyWaterfront Mall is primarily a high-end supermarket with an extensive range of international products and groceries. As well as the supermarket, there is also a department store, BSP branch, phone and tech shops, telecom kiosks, clothing stores, a bottle shop (liquor store), Air Niugini booking agent, chemist and optician.There is ample car parking and high security.Harbour CityLocation: Harbour City Road (adjacent to Spring Garden Road)Contact: +675 312 0000 (supermarket)Operating Hours: 8am to 7:30pm DailyHarbour City is a mixed development precinct with residential, commercial, and retail outlets within safe walking distance and a stone’s throw from the CBD.  As well as apartment blocks, there is a large supermarket, bottleshop (liquor store), pharmacy, banks, restaurants, and coffee shops. Harbour City is also home to the American Embassy. There are several safe parking areas with access to all of the amenities.Waigani CentralWebsite: www.facebook.com/waiganicentralLocation: Waigani Drive and Poreporena FreewayContact: +675 323 8468Opening Hours: 8am to 9pm DailyWaigani Central contains a grocery supermarket and retail outlets spread across a large property with ample parking. The complex has a hardware store, shoe shop, homeware shops, a clothing boutique and a luxury gift shop. Several dining choices include a café within the supermarket, a restaurant and bar that offers a blend of local and international cuisines, and PNG’s leading fast-food chain drive-through.Liquor OutletsMost supermarkets have a liquor outlet, and there are several independent liquor stores around the city. Liquor licenses will usually trade from Monday to Saturday, 10am to 8pm. They are not allowed to open on Sundays.Due to the COVID-19 pandemic, there are further restrictions on alcohol sales, and stores are only allowed to trade between Monday and Thursday during the State of Emergency. Clothes and Fashion in Papua New GuineaClothing stores are located within most shopping complexes, with the largest selection in the Vision City Megamall, including JeansWest, Cherish Boutique, The One and Marks. Stores cater for men, women, and children and offer specialist lines such as beachwear and sporting wear. Jack’s of PNG offers high-quality unisex lines at their VC and Waigani Central stores, and most of the hotels have one of their boutiques.Boutique shops with a curated selection of PNG designer clothing, many of which feature on local fashion runways, are Miss PNG in Vision City, Glow Boutique inside the Shady Rest Hotel, and Maku Gifts at the Gordons Business Centre.Both hosted monthly, POM City Markets and Harbourside Night Markets are a safe and friendly environment to browse locally made products from small businesses. These markets sell unique PNG jewellery, while high-end pieces can be found at PNG’s two major jewellers; House of Gemini and Kara Jewellers. Local Food Markets in PNGPapua New Guinea has a wide variety of delicious local fruit and vegetables available from all supermarkets. However, open-air markets sell the freshest produce, such as at Boroko or Gordon’s markets. Local produce is brought directly from the Central and other provinces to these two markets before being distributed around the city by resellers. Travellers should take an escort with them as there are security risks at these locations. Pacific Adventist University (PAU) has a great market on Sundays. There is a wide range of organic produce, all grown within the university grounds. It is secure and reasonably priced, but the best products sell quickly, so arrive early.For seafood lovers, the Koki Fish Market is the chief market for seafood arriving direct from villages along the Central Province coastline. Whole fish can be selected and cleaned before being packaged. Image Source: pngpomlife.com PNG Arts and Crafts MarketsFrom Papua New Guinea’s diverse cultures comes an array of fantastic art and craft available all-year round. Craft markets are held every Saturday morning, alternating between the Laguna Hotel, Moresby Arts Theatre, the Holiday Inn, and the Ela Beach International Primary School.Visitors can expect to find products such as woven cane baskets, carved wood and clay artefacts, PNG’s famous woven string bags (Bilums), and local graphic art among many others. These are perfect as gifts or home décor.Another popular event is the Pom City Markets which take place every second Saturday and Sunday of the month at the PNG National Museum and Art Gallery in Waigani. It  provides a safe environment with a wide range of local products including clothing, arts and crafts, and food. Image Source: Loop PNG Online Shopping in Papua New GuineaOnline shopping in PNG has increased over the last few years and is now a popular option. Many businesses have an online store and social media presence. Like the rest of the world, scammers abound on social media platforms, so shop with caution.MarketMeri.com is PNG’s largest online marketplace listing classifieds under various non-food categories nationwide. Businesses and consumers can use this platform to buy and sell new and used items.
Visas and Work Permits
Visas and Work Permits
June 7, 2022, 5:36 a.m.
Advice
Lifestyle
Anyone travelling to PNG for whatever purpose must have a valid entry permit or visa to enter. The Papua New Guinea Immigration and Citizenship Authority (ICA) is responsible for administering visas in coordination with Papua New Guinea Embassies globally.You can visit the PNG ICA’s website for the latest visa requirements and a list of diplomatic missions globally: www.ica.gov.pg.For expatriates moving to PNG for work, employers typically manage the process of securing a work permit and visa for new overseas employees and any family travelling with them. Generally speaking:Employees will complete the application forms, keep copies, and send them along with the required documents to the employer, who will submit the applications themselves with the relevant authorities.The employee must be outside of PNG during this process.The employee will then submit a valid passport and copies of the application form to the closest High Commission, Embassy or Mission, who will issue the visa to the traveller.There are six types of visas available in PNG Visitor Visa This visa is for those holidaying in PNG, or visiting friends and family, and is available on a single or multiple entry basis; it does not allow the entrant to work in PNG. Applicants must prove they are genuine tourists or visitors and may be required to produce evidence to support this.PNG allows citizens from some countries to apply for a visa on arrival; however, the list of countries is limited. For example, Australian residents must obtain a visa before arriving in the country or risk being refused entry. Visit the ICA website to confirm the list of countries eligible for visas on arrival: https://ica.gov.pg/visa-information/visa-on-arrivalBusiness VisaAllows the entrant to conduct business for a short time in Papua New Guinea. Business activities include buying or selling goods, carrying out a trade mission, supporting a major infrastructure project, or carrying out any business with an authorised representative of an overseas company or person. Applicants may need to provide proof to support their application. PNG offers options for single or multiple entry business visas. Business visas on arrival are only available to eligible foreign nationals and under specific circumstances. Australians are not presently eligible for a visa on arrival. Visit the ICA website to confirm the list of countries eligible.Image Source: Loop PNGWorking Resident VisaThere are many different classes of visa associated with a working visa in PNG, such as employment, journalism, and restricted employment.Eligibility for a general employment visa will depend on the duration of the stay and specific circumstances of the application (for example, if you are the relevant employee or the spouse of an employee).Study VisaEligible for those enrolled in courses or otherwise studying in PNG. Applicants must prove they are studying and may be required to produce evidence to support this.Special Exemption VisaThis visa is for those undertaking specific activities within PNG, such as a foreign official, an accredited diplomat, or volunteers working with a volunteer agency. Eligibility criteria will depend on the individual circumstances and the length of stay.Permanent Resident VisaApplication for a permanent resident visa will depend on the applicant’s circumstances, their ties to PNG, and the duration of visas previously held.How to Apply for a Visa for PNGPaper ApplicationsPaper-based applications can be submitted by visiting the ICA website and downloading the relevant form. The form can be submitted to the PNG Immigration and Citizenship Services Authority (PNGICSA) or the nearest PNG Diplomatic Mission together with supporting documents.PNG eVisa ApplicationThe ICA website has a new online application process via the ICA website (www.ica.gov.pg) or by visiting: https://evisa.ica.gov.pg/evisa/account/Apply. Image Source: ICA eVisa Note, the eVisa process is not applicable for Working Residents.Cost of PNG visasEvery individual applying for an entry permit or visa must pay the relevant application fee. If applying from outside PNG, you should contact your nearest PNG Diplomatic Mission to obtain prices in your local currency.PNG Work PermitsTypes of PNG Work PermitsNon-citizens who wish to work in PNG will require a Work Permit from the Department of Labour and Industrial Relations. As with the visa, the employee will complete the application form and send it to the employer who will make the application. It is a prerequisite to obtaining a visa.There are three main types of work permits:General Work Permit: The most common type, where there is a commercial relationship between the employer and the employee.Volunteer Work Permit: Is where the employment contract between the employer and employee is voluntary.Bridging Work Permit: Is a permit granted for 60 days and allows non-citizens to remain in PNG while the new application for a work permit is processed.How to Apply for a PNG Work PermitVisit www.workspermits.gov.pg to find downloadable application forms. The Application Form, Passport, Medical Documentation and Police Certificate should be lodged at the relevant PNG Diplomatic Mission, along with the accompanying visa. Supporting documentation should be lodged by the sponsor at PNGICSA for approval.Dependents Dependants of the employed person, specifically the spouse, unmarried children under the age of 18, and elderly parents will need to complete a separate application for an entry permit.In exceptional cases, visitor entry permits may be granted to children over the age of 18 who are still dependent on their parents; this refers to a child who has a severe disability or is continuing their education in PNG.
Securing a Job in Papua New Guinea
Securing a Job in Papua New Guinea
June 6, 2022, 5:09 p.m.
Advice
Lifestyle
Papua New Guinea is an attractive destination for expatriate workers. Career growth is a significant drawcard for employees, with the ability to secure senior roles that might otherwise be unavailable in their home country. In addition, the salaries and benefits available to expatriate workers are substantial, often exceeding comparable domestic wages.  Financial benefits and career growth, when coupled with the unique experience of working in a developing country and contributing to the country’s betterment, make PNG a dynamic employment destination for those willing to take up the challenge.  Types of Jobs Available in PNGPapua New Guinea welcomes workers from various professions; from general business roles such as CFO’s (Chief Financial Officer) and engineers, pilots, head chefs, and salespeople; the opportunities are limitless. Notwithstanding the variety of jobs available, PNG’s major industries dominate the opportunities for expatriates, such as mining, oil and gas projects, construction, banking,  and aviation. Specific disciplines that are in demand include management, accounting, HR, IT and engineering.     Residential vs FIFO RolesResidential roles are PNG based, with the employee having a permanent residential address in the country. By contrast, fly-in-fly-out or FIFO roles require the employee to be stationed in a location on a rotational basis for a period of time before returning home for a period. FIFO roles are typical in the aviation industry or for work at remote locations such as a mine site. Rotation periods vary between 4 to 6 weeks on-site and 4 to 2 weeks at home.  Wages in Papua New GuineaWages and benefits for expatriate workers in PNG are generally materially higher than for equivalent roles domestically. By law, all citizens and expatriate workers in PNG must be paid in PNG Kina directly to a PNG bank account. Contracts normally state an agreed wage in Kina; however, some employment contracts will benchmark against a foreign currency to protect the employee against currency fluctuations. Employees should check whether their wages are benchmarked against their local currency. Image Source: salaryexplorer.com Employment BenefitsEmployment benefits for expat employees in PNG vary by industry and company. Still, they often include many of the costs of living that an employee may otherwise bear themselves, making roles in PNG highly attractive. Expat benefits for residential employees generally include:A vehicleAccommodationSchool feesClub membershipsReturn flights to their resident countryPersonal protective equipment (if required)InsurancesExpat benefits for FIFO employees often include:MealsAccommodationReturn flights to their resident countryPersonal protective equipment (if required)Insurances  PNG Income taxIncome tax in PNG is relatively high compared with other countries, with the top tax band at around 42%. Employers will calculate and deduct income tax on behalf of the employee.Employees should note that there are no compulsory pension or superannuation deductions for non-citizen workers. Employees should consider specifying that their employer makes superannuation or pension payments to their relevant scheme in their home country on their behalf. Papua New Guinea has existing tax treaties with many countries, including Australia, New Zealand, Canada, China, Indonesia and the UK. As a result, workers with an employment contract for greater than 2 years are typically deemed to be non-resident for tax purposes and are not required to file tax returns in their home country.Image Source: Looppng.com Repatriation of WagesForeign employees are often concerned that Papua New Guinea’s low foreign currency reserves will inhibit their ability to repatriate their funds to their home country.Whilst PNG’s currency reserves are limited, expatriates can freely transfer funds by internet banking to an overseas account subject to a K10,000 limit per day with a bank fee of ~K50 per transaction. Visas and Work Permits in PNGThe employer in PNG generally obtains visas and work permits on behalf of the employee. Image Source: papuanewguinea.travel Things to Consider When Taking a Job in PNGWhile Papua New Guinea is a great place to live and work, several things should be considered before accepting a role. Your partner and children must fully understand the limitations when living in a foreign, developing country. For example, there are restrictions on movement in terms of security, which can have a major impact on lifestyle. Therefore, it is essential to conduct research and speak with other people who have lived or worked in PNG before taking the plunge.In addition, candidates should ideally possess specific personal attributes which make the transition easier; these include resilience, flexibility, cultural adaptability, positivity, mentoring capability and a willingness to create change.
Transport in Port Moresby
Transport in Port Moresby
June 7, 2022, 1:00 a.m.
Advice
Lifestyle
Driving rules in Papua New Guinea are essentially the same as in Australia (which, in turn, are similar to the UK), with vehicles driving on the left-hand side of the road.All vehicles must display a valid registration and safety sticker, and drivers must carry a valid licence.Foreign licences are valid only for the first six months of residency. After that, drivers must obtain a full licence from Motor Vehicles Insurance Limited (MVIL) on Kunai Street in Port Moresby. Driving in PNG can be a challenge. Potholes are a common occurrence on highways, particularly during the wet season. Take caution when driving through puddles, as they may be much deeper than expected.Image Source: mooresinpng.blogspot.com Road discipline is another issue, as police rarely enforce traffic rules. Recklessness, speeding, and driving under the influence happen frequently compared with many other countries and result in many avoidable accidents. Road users must take precautions against any vehicles driving dangerously.Drivers should also take care of their security whilst driving, as car-jackings, whilst uncommon, do occur. The following are some simple steps to stay safe:Car alarms and vehicle trackers are available from security firms. These GPS enabled devices have a panic button in case of an emergency, and a patrol vehicle can quickly track your location to ensure you are safe.Situational awareness in respect to other vehicles is essential. If you suspect that a car is following you, make an unusual manoeuvre, such as circling a roundabout twice, to confirm your suspicions. If a vehicle is following you, drive directly to the nearest police station or safe haven.Keep car doors locked, particularly when stationary.When driving, keep enough distance between your car and the vehicle ahead of you to allow you to pull away in case of trouble. Leaving room between your car and the next car is especially important when in a traffic jam as this is a prime opportunity for robbery.Avoid driving at night where possible and, at minimum, avoid known trouble spots. Port Moresby has several reputable guarded taxi services, which should be considered for travel, especially at night. Taxis in PNGMany taxi companies operate in PNG and are identified by the “T” on the number plates. They are typically well branded and are allowed to pick up passengers off the street without pre-booking. Whilst most taxis are safe and reliable, the safety standards of some taxis are questionable.Taxis must have meters installed but are rarely used. It is therefore prudent to agree on the fare before travelling.Image Source: pngfacts.comSeveral companies specialise in providing secure transportation using high-quality vehicles. These do require a pre-booking, and fares can be paid via an account. These companies will often have different sized cars depending on the requirements, such as a small bus for an airport run. Non-nationals should generally utilise secure taxi services. Public Transport in Papua New GuineaPNG has an owner/operator public transport system. Public Motor Vehicles (PMVs) are owned by private companies or individuals and operate on behalf of the public transport system. The typical fare is K1 per trip regardless of the route. The most common PMVs are 22-seater Toyota Coasters, but large open-back utility trucks, such as an Isuzu flatbed, also qualify as a PMV.PMV’s are rarely used by non-nationals, particularly in the major cities. There are potential security risks associated with travelling on PMVs or waiting at bus stops. However, in some outer regions, such as Alotau, Kokopo and Kavieng, it’s relatively common to see expats jumping on board a bus. Domestic Flights in PNGThere are limited roads connecting Port Moresby to the rest of PNG. There are road links into Central Province and running as far as Kerema in Gulf Province. The main mode of transportation, therefore, is by air.There are two leading domestic airlines; Air Niugini, PNG’s flagship airline, and PNG Air. There are currently restrictions on domestic travel due to COVID-19; however, all provincial capitals are usually serviced several times a week.Flights are fairly expensive in PNG, with a Port Moresby to Lae standard fare costing around K800 one way, but with special fares starting at K400.
Location Overview: Central Business District in Port Moresby
Location Overview: Central Business District in Port Moresby
June 23, 2022, 6:30 a.m.
News
Advice
The Central Business District of Port Moresby is the commercial heart of Papua New Guinea, home to the Central Bank, Stock Exchange, the Internal Revenue Commission, as well as office towers, hotels, bars and restaurants. It is located on the main peninsula of Port Moresby, nestled between Touaguba Hill to the East, Paga Hill to the West and Ela Beach to the South.Port Moresby has been inhabited by the local Motu-Koitabu people for centuries, and was sighted by Captain John Moresby of the British Royal Navy in 1873. It was named after his father; Admiral of the Fleet Sir Fairfax Moresby. Now, the Central Business District, typically known as Downtown, is a bustling hive of commercial activity with major developments seen over the past few decades.It is serviced by two main roads: the Two-Mile Hill Road and the Poreperena Freeway, both of which provide access to other parts of the Capital.Being on a peninsula, it offers almost panoramic views of Fairfax Harbour, Walter Bay and the Coral Sea. Champions Parade is one of the most prominent roads in the CBD, On the left is Harbourside South under construction, and the recently completed Nobel Centre, now PNG’s tallest building.To the right is Burns Philp Haus, one of the oldest buildings that has been recently refurbished and occupied by Westpac bank. The tall building to the right is MRDC Haus, formerly Pacific Place, and immediately behind it is the Steamships Shopping Plaza.Next to Nobel Centre is Revenue Haus, home to the IRC, then Burns Haus currently under renovation, followed by Mogoru Moto Building and MMI Haus at the end.All of these buildings are occupied by commercial offices. To the right, on Hunter Street, is Defens Haus, Newcrest Haus and Monian Tower.There are several hotels in the CBD, including the Grand Papua and The Crowne Hotel. The CBD used to be home to PNG’s politics, and Parliament Haus used to sit on McGregor Street before was moved to Waigani.Behind Old Parliament Haus is the recently built Apex Apartments, Crowne Plaza and Deloitte Tower and the Port Terrace Restaurant and Bar nestled in the middle.Harbourside East and West [VT] have a wide variety of restaurants and coffee shops with some of the most spectacular harbour views, with office space above them.Paga Hill is in the background, with Credit Haus and Cuthbertson Building in the foreground. The Bank of Papua New Guinea is to the right of the screen with the BSP Town branch to the left adjoining the iconic Kina Bank Haus which is the tall building in the centre of the screen.APEC Haus and Ela Beach Tower can be seen in the background. To the North of the CBD is Fairfax Harbour, Waterfront Shopping Centre, the Yacht Club and Harbour City in the background, all parallel to the Poreporena Freeway
Turning Customary Land into an Industrial Powerhouse
Turning Customary Land into an Industrial Powerhouse
June 6, 2022, 5:07 p.m.
Advice
Housing Projects
Papua New Guinea’s land tenure system is a challenge for landowners and developers to utilise and develop land for the benefit of the community. Sasiva Industrial Park Limited has found a lasting solution to this problem by converting well placed customary land into a state lease for the purpose of developing a state of the art industrial / business park through a strong working partnership with the traditional landowners. Sasiva Industrial Park is a seventy-six hectare development consisting of mixed zoning. The park is strategically located within a stones throw of Motukea International Wharf. With many lots earmarked for warehousing, there are also proposals to construct a supermarket, food and retail outlets, office spaces and a fuel station. The park will also include:Power, water and sewage reticulationMulti-lane sealed roadsDrainageStreet lightingFootpathsRecreational parkSecurity Location, Location, LocationSasiva Industrial Park is just 100m from Motukea’s International Wharf and less than 500m from the customs facility. The Central Business District of Port Moresby is only a 15-minute drive and the park is enroute to the AES Wharf, Puma Refinery, Exxon-Mobil PNG LNG and the proposed Total Papua LNG.  The strategic location of Sasiva Industrial Park is well positioned for future growth and over time will no doubt be a much more centralized location within Port Moresby.Stage OneIn 2021 the developer looks to complete the first stage of the project. This includes the first 1.5km of sealed roads and drainage along with street lighting, water and power reticulation, giving clients access to the first 10 hectares of serviced lots for sale. These lots will range from 5,000 to 20,000 square metres.  Anything outside of these sizes can be accommodated upon request.Located close to Napa Napa Road, this is logistically an ideal location for warehouses and light industry looking for proximity to the Wharf and proposed Customs facility. Special pricing will be given for these prime locations whilst the rest of the park is under constructionSocial ResponsibilitySasiva Industrial Park believes that health, education and adequate housing with power and water connection is important for the people of Papua New Guinea and by partnering with traditional landowners the company has invested heavily over the years to these causes.The company has set up a department that will continue to invest into the local community; giving landowners access to better education, health facilities and accommodation with clean water supply and improved sanitation, setting the standard for how developers should be partnering with the custodians of the land.Companies who choose to relocate to Sasiva will have a piece of mind knowing that they will contribute to the wellbeing of the traditional landowners and their future generations to come.
Location Overview: Ela Beach in Port Moresby
Location Overview: Ela Beach in Port Moresby
June 6, 2022, 5:07 p.m.
News
Advice
Ela Beach is a popular location with mostly upscale residential apartments with spectacular views. It’s a stone’s throw away from the Central Business District and an ideal location for those who work in the high-rise offices in Down Town Port Moresby and has easy access to hotels, restaurants, bars and social clubs.Ela Beach Road is connected to 2-Mile Hill which takes you up past Koki Fish Market, Badili and into the rest of the capital. The freeway is on the other side of the CBD, about a five minute drive, which is the main trunk road into the city.Ela beach was formerly known as Era Kone, meaning Turtle beach in the Motuan dialect of the Papuan region. The local Motu Koita people hold an annual Hiri Moala festival to celebrate the trade wind voyages that were historically held in the region Ela is the major beach front of Port Moresby with white sands that stretches approximate one kilometre It has seen several changes over the years with a new road layout built in 2017 and in 2018, Port Moresby hosted the APEC Summit and APEC Haus was built on reclaimed land at the end of the Beach. It was designed to resemble a Lakatoi sail. Several events are hosted here, including Christmas, New Year and Independence Day celebrations.Ela Beach is a popular sporting and fitness area and ideal for walking and jogging. It is adjourned with basketball and volleyball courts and is well lit into the early evenings with plenty of parking. The prime time for walking is at sunrise and sunset when it’s cooler. Past APEC Haus is the Paga Hill Ring Road, and a two kilometre walk to the other side of the peninsular.There are several long-stay residential apartments here, including Windward East and West, the Ela Vista Complex, Chesterfield and Ela Beach Apartments. There is also the iconic Ela Beach Hotel, bar and restaurant. There is a fuel station at one of the beach and a police station and church at the other. It’s generally regarded as a safe location although care should be taken in large crowds during events. Public transport is available at Ela Beach and there are taxi ranks, although for overseas visitors it is recommended to use private transport and reputable taxis. That’s it from Ela Beach; for more location profiles, please check out Hausples.com.pg
Customizable Office Spaces That Are More Affordable Than You Might Think
Customizable Office Spaces That Are More Affordable Than You Might Think
June 6, 2022, 5:07 p.m.
Advice
Lifestyle
From K1,800 per square metre for flexible office spaces, there's more to this 23 storey nirvana of living, working and recreation mega structure in downtown Port Moresby than meets the eye, besides bespoke building attributes such as: Best sea views;Vertical landscaping; Automatic physical sun-shading;Tenancy access controls; and,Efficiency throughoutWhether your business office needs spell an open floor plan, private, or a combination of both set ups, the cost per square metre evident throughout Noble Center’s individual office spaces is more affordable than you might think, with single offices starting from under K12,000 per month.Standing tall at a height of 95.6 meters, the Noble Center redefines downtown Port Moresby's skyline, representing a transformation of the modern workplace and confidently assuring the evolution of Papua New Guinea's present-day workforce.China Railway Engineering Group's private K550 million investment in PNG's public domain comprises a 23-storey unparalleled package of amenities, innovative retail and office designs, latest technology offerings, best-in-class sustainability practices and a prime location in the heart of downtown Port Moresby CBD.Economical energy features, such as efficient lighting and energy regenerating machines or devices and more alike, are the standard of today. This is the essence of the Noble Center, making it the marvel of downtown Port Moresby.Of course, it's one thing to insinuate a new office design out of the ordinary, and it's another to remodel an existing office space into a completely different setting. Yet, it's easily doable within the scope of Noble Centre’s flexible design requirements.Whatever your company focus may be, not every employee desires a dedicated and fixed-focus office space. Then there are those that need to operate privately if the smooth flow of operations is paramount. The Noble Center will incorporate a variety of cafeteria concepts and retailing with local and international starters, and modest prices to select.You may be a corporate heavyweight, or an upcoming commercial outfit seeking customizable office spaces that blend your evolving needs, think Noble Center.Tenants will enjoy all the amenities that come with occupying this graceful giant in the skyline of downtown, Port Moresby. As well as other additional exclusivities that are iconic, only, to this unique landmark structure - the tallest in Papua New Guinea and the pacific as a whole.The team at Noble Center are on hand to help assess and implement an ergonomically correct office setup upon request.
A New Era of Living In Bramell Street Downtown Port Moresby
A New Era of Living In Bramell Street Downtown Port Moresby
June 6, 2022, 5:07 p.m.
Advice
Lifestyle
There’s something unique about Bramell Street in Ela Beach, where everything is within reach; where life is a little bit different, rejuvenated and finer than before. It is a neighborhood built on vision, sound planning and manifestation of dreams.Welcome to the Ela Beach Tower, forged upon more than just a residential destination. Where life and lifestyles transcend expectations seamlessly, this 16-storey gamut of three and two bedroom luxury apartments individually cater to a new design and a new way of life, alongside remnants of high profile business offices, It’s a new era of living in Bramell Street, downtown Port Moresby.Ela Beach Tower is a testimony to Kenmore Group of Companies’ efforts to tap into the ever-evolving real estate industry, and raise the bar of luxury and convenient apartment living in an urban location.With its close proximity to popular attractions, recreational centers and a stunning waterfront location, Ela Beach Tower offers a comfortable environment on the back of joyful experiences that are in sync with the hustle and bustle of everyday life.Residents have it allFrom outstanding amenities to breathtaking balcony views, Ela Beach Tower residents have it all. Better still, these luxury apartments individually cater to the needs of their residents, while embracing a vibrant, urban lifestyle.For the corporate client - these residences tend to speak the language of a corporate style of living, welcoming you home to a whole new window of possibilities; where “old fashion” is a foreign language, and "new" and “spectacular” are the residential jargons.The 2 bedroom apartmentThe two bedroom apartment is translated into an internal duplex with ensuite, a gourmet kitchen idealized by hanging lights and modern appliances, open-plan living room, and a study that’s appreciative of the picturesque city and sea view surroundings.The 3 bedroom apartmentNothing screams well-balanced better than Ela Beach Tower's three bedroom apartment, which is accentuated by everything exhilarating, to begin with. The three bedroom apartment is a step ahead of itself in terms of an additional single bedroom with its own study - apart from the master bedroom and the other single bedroom without study - a gourmet kitchen that’s reassured with an island to give more spin on its hanging lights and modern appliances, while an unwavering command of the panoramic views from the private balcony, look on. Popular attractionsEla Beach Tower is just steps away from the iconic APEC Haus, Ela Beach, BSP Town and the Ela Beach Crafts Market Shopping Mall. Apartment amenitiesAll that’s symmetrical in each apartment configuration are the floor-to-ceiling windows, luminax flooring, spacious living room, in-door laundry, designer’-choice master bedroom, and a 24 hour security intercom in line with an integrated camera system.Whether you’re enjoying the tropical weather touring the beachfront, observing water-based activities, or brunching under the shades, this is a locality that gets locals involved in a vibrant and energized landscape.Needless to say, if sweeping views, creative imaginations, and “in a league of your own” means anything to you, then you will love the Ela Beach Tower Apartments.About Kenmore Group of CompaniesThe Kenmore Group of Companies is a sleeping giant, as it is one of the largest and most diversified groups of companies ever to be in operation in Papua New Guinea.With more than 1400 employees, 93% of which are PNG citizens, in command of a sales spectrum worth K430 million annually, this multinational mammoth is a force to be reckoned with.The Kenmore Group of Companies is a scion of a merger between the original Kenmore Group of Companies and a similar diversified group known as The Dylup Group of Companies, back in 1991.Today, the rejuvenated Kenmore Group of Companies oversees twelve distinct operations, spread across seven unique divisions found in Port Moresby, Lae, Tari, Mount Hagen and Kokopo.Kenmore's ongoing success is a testimony of sound business strategies, dedication, and manifesting a vision into reality. Kenmore Group of Companies thrive on: Quality goods and reliable customer service at competitive prices.Enjoyable work environment for employees.Healthy financial growth and stability.Adding economic value to investors' funds. For further information you can get in touch with us on [email protected], or call +67574700243.
Why Invest In Commercial Real Estate In 2021?
Why Invest In Commercial Real Estate In 2021?
June 6, 2022, 5:07 p.m.
Home Loans & Insurance
Advice
Despite last year's pandemic riddled situations throughout, residential real estate maintained an upward trend in terms of everything from price to development, than its commercial counterpart which very much acknowledged a stagnant progress.Both sectors breathe a world of difference between them, and the pandemic, without remorse, made things even worse by widening the gap further.But in spite of all that, the start of 2021 witnessed a gradual resurgence of commercial real estate. Principally, between residential and commercial real estate, the latter has a reputation for being one of the most reliable ways of growing wealth down the line, even though some investors who were more into commercial real estate investing were challenged by COVID-19.That said, our focus should be more on what we've learnt from the pandemic in order to cement our investments in the future, than earning immediate profits.Still unsure about why you should invest in commercial real estate? Don't worry. Read on to get inspired.Why should you invest in commercial real estate in 2021?A figure of speech, yes, and worthy of a place in real estate investing. You see, there are several ways to invest in real estate.There's house flipping, buying real estate-related stocks (more common overseas), renting out properties, and then there's the BRRRR strategy - unique in itself yet not far from the steps that govern house flipping.Is there more? Most significantly, yes, one among many, and that's commercial real estate (CRE) investing.A speculative option but a promising asset class that reaps high rewards if done correctly. Commercial real estate encompasses a resume of property types which haven't been under the investment radar all this time. If this piques your interests, then read on for what you need to know about this asset class. To begin with, you need to understand what exactly qualifies as commercial real estate. Commercial real estate, in essence, is the embodiment of any property designed to be profitable.This may cover every major real estate category one might expect - office buildings, retail stores, warehouses, factories, etc., and not to mention the well-intentioned and specialized properties that ticks off hotels, club houses, cafes, even healthcare facilities and anything else along these lines. Why invest in commercial real estate?Investing in commercial real estate, if you don't know yet, is a smart move and it doesn't really matter if you have years of experience in residential properties or you've never invested a toea in real estate at all.Then comes the question 'why commercial real estate?' Well, here are eight reasons why investing in this property sector can add fuel to your real estate portfolio - if this the path you’ve chosen.1. High income potentialThe key reason why you might want to consider commercial real estate investing is its potential - meaning, for what it's worth, its potential to earn you handsome returns. Now, most often than not, in Port Moresby and PNG as a whole, many commercial buildings are synonymous with huge rents and price tags, yet these indicate a huge potential for nourishing returns on investments, too.Rather than earning just a few kina monthly on a one bedroom apartment or single-family home for that matter, why not opt for a few thousand kinas or more with a genuine commercial real estate commitment?The expanding margins could inspire a growth to your portfolio in a sprightly fashion - that's if you strategically invest all your earnings in new properties as they come in leaps and bounds.2. Less competitionAs evident as ever in PNG's current real estate climate, residential real estate is a highly competitive market with respect to housing prices, although it nearly took on a snail's pace last year. While, commercial real estate, on the other hand, took on a stagnant role.One way of determining whether it’s a good time to invest in commercial real estate or not is to observe the kina volume for commercial real estate in Papua New Guinea. If a lower percentage is evident year over year, this means commercial properties might just be easier to find - especially compared to other assets in the market.3. Endless investment opportunitiesCommercial real estate investments are irrepressible in that they entail investing in a huge shopping mall such as Range View Precinct, or a high-rise office building such as the Noble Center. But if that's too much to handle, you can still settle for small, which would entail investing in warehouses, or apartments and what have you. Flexibility is rife in terms of what you can afford to invest, and where you can invest.4. Minimal turnoverIf you're well versed in every aspect of residential real estate, you'd probably agree with this one. It's not like every apartment and single-family home operate much the same way as commercial real estate, when it comes to investing. But are worlds apart, especially when considering lease agreements. At this point, commercial real estate is susceptible to three year agreements at a minimum, than the typical one year agreement common among apartments and single-family homes.A long-term lease agreement, for the most part, results in a mild turnover (including unnecessary hassles and associated costs) and ensures the property owner receives a steady cash flow.5. More help maintaining (and improving) your propertyThe maintenance, general upkeep and general updates to commercial properties is not something that you, as the owner, will have to do on your own, due to the fact that there's more than one net lease at work here. What this means is that the majority of the property's expenses such as tax, insurance, maintenance costs and even utilities, will be shouldered by your tenants. Normally, the landlord is responsible for these expenses, but who helps make it possible? Yes, the tenant.On that note, you will be privileged to have tenants who are vested in giving the best of their ability to keep the property in shape, than what's commonly standard in residential real estate.This means regular upkeep and leads to an increase in your property's value, overall. It's like a series of positives where one thing leads to another… 6. Less problematic tenantsThis reason calls to mind a residential property's tenants’ behaviour towards paying rents and leaving day: 'are they paying on time?', or 'will they be moving out soon leaving the place in total disarray?' and a host of others like regular tenant disputes and renter complaints.If this sounds familiar, then investing in commercial real estate is the best way forward, because here things are a bit more professional and ordered.Since you're hosting business tenants- those who have a reputation to protect and money on the line - rest assured that maintaining a good rapport with the landlord and following codes of conduct in ensuring the property is in good shape at all times will be at the top of their minds. In turn unnecessary hassles are kept to a minimum.7. Multiple portfolios If you're knee deep in residential real estate, then know this: commercial real estate can be the next best thing in diversifying your real estate portfolio.Since 2020 has taught us that the future is always uncertain, and anything can happen to us in the next minute, hour or day, we should learn from the lessons it brought and strategize towards strengthening our investment goals, and what better way to begin then to spread your investments beyond different assets. 8. Complete proofEventually, commercial real estate, in effect, is a worthwhile investment as we've seen so far.And if that's not enough, a multi-billionaire like Warren Buffet, for instance, has made heaps of fortune in commercial real estate alone, and he’s still doing so.Now that you know what to expect when it comes to investing in commercial real estate, let it not exist as an idle dream, but a work in progress.Final thoughtsRome wasn't built in a day, likewise wealth isn't built overnight. If you want to reach the top, there are endless possibilities as well as failures you have to pass through before you see the light at the end of the tunnel.In real estate, investing in residential properties is half the story. With commercial real estate investing to dip your fingers in is entirely a different story - better yet, the most reliable, efficient and effective way of building wealth.DisclaimerThis article is meant for informational purposes only. Hausples digs into the details of a specific topic and teaches its readers all about how the real estate industry operates. Therefore, not all articles are intended to be construed as financial, or investment advice. Hausples encourages you to reach out for professional help regarding your own real estate situation.
How To Determine A Potential Investment Property (Part. 2)
How To Determine A Potential Investment Property (Part. 2)
June 6, 2022, 5:07 p.m.
Advice
Lifestyle
Part one of this two part post covered one of three essential calculations when you’re set on a BRRRR strategy, as a would-be landlord or a newbie investor. The article also introduce briefly what these calculations involve in their truest of sense.Continuing from part one, here, we’ll go into detail as to what this analysis is all about, and what the other two calculations are.Let's head straight into it... 2. Calculating the Cap RateThe cap rate helps to determine if the purchase price of the investment property in question is a good deal or not. Traditionally, however, cap rate will normally vary between properties, in terms of location and market. Net annual income, on the other hand, represents your total income (or total rent collected) for the year, after expenses have been deducted. This now becomes your total cash flow as discussed in Part. 1.3. Cash on Cash ReturnCash on cash return refers to the amount of money you earn on an investment. Translated in Tok Pisin: hamas moni yu kisim antap long moni yu putim e go insait long wanpela investment.Buying a property with hard cash (i.e., a cash purchase), is no different to a cap rate. Nonetheless, once you finance the investment property of your choice with a loan, the amount will factor into the monetary leverage.As a matter of fact, financial analysts suggest that when utilizing a loan, you increase your purchasing potential by more than 50%.In this case, the cash on cash return will tell you exactly what your financial return is. This idea will become translucent as you read further.  Formula: Cash on Cash = Net Annual Income / Total Cash Invested As prophesied by the formula, cash on cash return equates to dividing your net annual income by the total amount of cash you've invested, with respect to turning your property into a rental investment.Worthy of note, numbers are only numbers until your estimates or calculations point towards reality. Notwithstanding, even while crunching the numbers you may find they look promising on paper, but the reality is never the same. So it’s important that the outcome is what it’s going to be in reality.In essence, if you're buying a house in a location composed of Class C properties, which means the properties have a poor tenancy reputation, are of low quality, have a high tenancy turnover, coupled with a huge probability of frequent missed rents, you'd be perplexed to move forward with your investment goals.(a) Calculate monthly cash flowNow, supposedly you purchased the investment/rental property with cold hard cash, the first thing to consider is calculating your monthly cash flow:Cash Flow = Income - ExpensesDon't forget that after you determine your monthly cash flow, you must then calculate the cap rate. (b) Calculate cap rateCap Rate = Net Annual Income / Purchase PriceCap rate, in any case, doesn't account for a mortgage. Instead, it mirrors an estimate for how good of a deal is when comparing the full purchase price. (c) Calculate monthly cash flow a mortgageWith a mortgage, the same calculation format is repeated.But at any rate you end up with a negative cash flow, that means that's how much you'll be earning every month, below the threshold of earning a profit until you own that investment.This may require intelligence, discipline and sacrificing some of your expenses that aren't equally competent in bringing you good ROIs. The same concept applies to hard cash purchases.With cash flow, it's your responsibility to purchase at a much lower price, or simply evaluate the investment property of your interest if there's a need to raise rents.For instance, if the rental market subsequently reason that rental prices should be greater than or equal to K1,000 per month, the cash flow above will look something like this:Of course, it's not uncommon to purchase an investment property with shallow rents. If existing tenants have been around for quite a while, chances are they will continue to pay below market value - an inconsiderable fact of life.However, if the property in question has not experienced repairs and maintenance for some time and - after the purchase - you immediately ensured about-time updates (installing new flooring, replaced broken fly wires, repaired broken walls and louvers, etc), you're better off with new rental rates based on what is currently reflected by the market.(d) Cash on cash returnCash on Cash Return = Net Annual Income / Total cash invested[Cash on Cash Return = (Monthly cash flow x 12) / Cash to close (Down payment + closing costs)] The magic of a cash on cash return is that once it is leveraged with a mortgage, your return on investment (or ROI) will improve greatly.A cash on cash return allows you to make small investments, increases your potential to buy several more properties, and revamps your return on investment in a big way. The thing to remember is that when you're faced with a shallow cash flow, because you have to cover for your monthly mortgage payments, your tenants will be on top of it by way of paying their dues.Now, if you've saved up enough for a rainy day, you have the ability to purchase another investment/rental property, in order to build your overall cash flow.The bottom line The only way you can have a fair idea of whether or not a property of interest will make a good investment, is by crunching numbers around the three key calculations noted above. If the numbers are feasible, good work! Contact your real estate agent, as the next step, and qualify your offer.However, bearing in mind that your offer will not resemble the asking price.On that note, the asking price will always be about what the owner hopes to earn. Only on rare occasions will the asking price match what the property is truly worth or what the market perceives. All in all, you must be confident with your offer, in terms of the numbers you have on hand. Leastwise, if the owner asks for more, then the whole project will not make any sense, meaning you'll have to abandon this all idea all together and move on with your search. But if the property doesn't sell after a while, you can come back with the original offer and still close on the deal anyway.The calculations to evaluate a property are simple.Cash flowCap RateCash on Cash ReturnWe hope you enjoyed this two part article. Please subscribe to our newsletter and stay up to date with the latest news, lifestyle and guides in PNG real estate.  DisclaimerThis article is meant for informational purposes only. Hausples digs into the details of a specific topic and teaches its readers all about how the real estate industry operates. Therefore, not all articles are intended to be construed as financial, or investment advice. Hausples encourages you to reach out for professional help regarding your own real estate situation.
Your Home Not Selling? Here's Probably Why
Your Home Not Selling? Here's Probably Why
June 6, 2022, 5:07 p.m.
Advice
Lifestyle
In every real estate market, there will always be a certain portion of disappointed homeowners whose homes aren't making it past the threshold of selling.  The longevity of their homes sitting as stale inventory on the market is unbearable, and often frustrating for all parties concerned, including listing agents as well as buyers. What you will find in this article is a consideration of five of the most common reasons why a home isn't probably selling as expected, and these factors are highly persistent across every property market. So, in any case, if your home has spent the last six to twelve months, or more, on the market and gradually urging towards expiry, make sure one of the following reasons is not the issue.  Home sellers who are well aware of these common reasons are usually the ones who avail themselves of a huge advantage over their counterparts, because they keep clear of these mistakes. In contrast, if you’re currently frustrated because your home or property isn’t selling, here’s probably why. 1. Overpricing Perhaps, one of the most overlooked crucial factors of why a home isn't selling as expected is the price. If you find yourself in this scenario and you're almost at the point of pulling all your hair out, the first thing you should do as you review your selling strategy is check your pricing. You see, overpricing is no different to the kiss of death when selling a home, and it can cost you a lot at the end of the day. Advisably, you need to understand that there are many mistakes made when pricing a home for sale. So, before you begin your home selling venture, make sure you're well versed with how the market value of a house is resolved. Professional real estate agents don't price a home the same way as a rabbit is pulled out of a hat, no. That's a thing for movies and funny imaginations. What top real estate agents do is that they complete an all-inclusive comparative market analysis (or CMA) on your home, in order to determine its current market value. To these professionals, this is the only way property sellers will know what their homse is comparably worth. In other words, a CMA helps you compare your homse with similar homes that have sold in the past 6 months or so in your area, just like what a home valuer will do for a home buyer. Thus, the process of identifying aspects of two homes that make them both different always allow for positive and negative value adjustments. For instance, if your property has a spacious yard enough to facilitate a gathering, and a similar home was sold recently in the same area with minimal yard space, your home will receive a positive value adjustment. 2. The need for market exposure When a home for sale is injected with a decent - or better - dose of marketing exposure, it can inspire a huge difference, even if it eventually sells and at what price it's been put up for. So, needless to say if your home for sale isn't making any purposeful progress, lack of marketing exposure may be the most possible cause. Of course, there are various types of real estate marketing tactics out there that top-notch property agents employ, especially when it comes to marketing their listings. Knowing that home buyers turn to the internet as a first step towards searching for homes to buy, gives you enough leverage to get in front of them almost everywhere online. Imagine you own a brick and mortar, and you had the option between setting up on the main road that passes through a vibrant city center, or a quiet neighborhood side street. Which one do you think you'd choose? Of course, the main road. The same is with marketing your home. With possibly millions of searches per month, getting your home in front of every potential home buyer online is like planting your home on the busiest road in the city center. The more people see your home, the greater the chances of selling. Not only is this critical, you want to attract the ideal buyer, one that will actually have time for you and in due course buy your home. On that note, the only way to achieve this is being seen by potential home buyers surfing the internet for this reason. The trick is to stand out from the other homes on sale, and that's exactly what you should be aiming for. No magic here. Just making sense of "what ifs" and "why nots". Moreover, whatever the outcome, your success will depend on the type of tools you utilize, be it videos or still images, to give your home for sale the level of exposure it deserves. Collectively, they must be of high quality to the point where your home becomes irresistible. 3. Poor Condition Another reason why your home isn't selling as you'd expect is due to its condition or the state it is in. If it's poorly cleaned, or it shows signs of neglected repair and maintenance, you've just chased your potential buyer. In fact, that's the simplest way of kicking your potential buyer out.Let's consider a few of the more common signs that mirror the poor conditions of a house:Water stains on ceilings;Damaged or missing roof shingles;Dry rot;Uneven flooring, and, Cracks in the home's foundationAnd the like, make up the list of obvious indicators of a home in a desperate state. These are the red flags you need to ensure they are dealt with effectively before your home goes on the market.  The last thing you want is your home ending up as an expired listing because of its lethargy in the market. 4. Foul odors Even an inexperienced first time home buyer does not need an expert to point out what a foul odor smells like. Every home inspection makes a prospective buyer vulnerable to the "smell test" and, for the most part, are the silent killers of quick, successful sales.Odors from cigarettes, pets, or neglected moisture, etc., are the part and parcel of foul odors, altogether concocting yet another reason why your home isn't selling as expected.So, be mindful of this crippling issue when you're set to have potential buyers over for viewing. 5. Spiritless location Location, location, location, yes, a cliche but one that has its merits as well as plays a significant role in making or breaking a home sale. If your house is in an area that's less desirable, then that's probably one of the reasons why your home, of course, isn't selling as expected.Now, your property can be beautiful, cheap yet well maintained and up to standard, but if it's found in a location that has a damning reputation or is nowhere near major conveniences, then that is enough to say why your home has been stagnant ever since its entry onto the market. Bottom line When a particular home takes too long to sell, rather than trying to find out why and become more aware in order to rethink the plan, home sellers concentrate on all things frustrating. The five reasons outlined in this article are some of the most common reasons why a home isn't selling as expected. So if you find yourself in this defeating situation, most likely one of these reasons is the black jack.DisclaimerThis article is meant for informational purposes only. Hausples researches tricky real estate topics, interprets them and teaches its readers all about how the industry operates. Therefore, not all articles are intended to be construed as financial, or investment advice. Hausples encourages you to reach out for professional help regarding your own real estate situation.
How To Determine A Potential Investment Property (Part. 1)
How To Determine A Potential Investment Property (Part. 1)
June 6, 2022, 5:07 p.m.
Advice
Lifestyle
In this two part post, we will look at how you can analyze a property to determine its investment potential, if you’re gravitating towards the BRRRR strategy. However, in this first part, we start with:How to analyze a potential investment propertyCalculating cash flowLet’s begin...Investing in real estate, or the other way around, regardless, is a beautiful thing to behold, because of the fact that it offers an immeasurable possibility towards generating an income stream in no time...Of course, it takes time though. Then there's the consideration for property management companies, or real estate agencies who are available to manage your property in a professional manner. Also in line with their existence is their ability to manage every aspect of owning a rental property which you may occasionally feel reluctant to get involved in. Moreover, these property management agencies also specialize in property staging, reeling in clients, collecting rents and everything between.In a different shade of blue, where real estate investing sticks out like a sore thumb, it's all about some math and tons of education to help you through the process by crunching the numbers confidently. Unfortunately, crunching numbers in this case is not for everyone. There are those who play down working with numbers, simply because it can be intimidating just by imagining all the factors involved in evaluating a property's investment potential; hence, to determine its worthiness.In contrast, ask yourself if an ounce of number crunching will result in an early retirement and a clear cut financial independence, would you still hate it?The reality is that not all properties analyzed will turn out to be great investments. Out of 50, or even 100 properties, only three or two will figure as ideal investments down the line.At the end of the day, it all boils down to what good you've gotten out of crunching these numbers. All you need is a little persistence until it all makes sense.After all, the more, the merrier; the more numbers you crunch, the easier the process turns out, and the better your position to accurately spot a great deal.In which case, you will easily distinguish a good investment deal from a bad one, and will make a purchase offer confidently, without hesitance.How to analyze your first rental propertyKnow the AreaJust before you begin analyzing a propety you think is investment worthy, you need solid data about the area in which the property of interest is in, specifically the type of neighborhoods and the market it captures. The following list contain some factors to consider before you begin your analysis:Unemployment ratePopulation growthIndustry – How is the job market?Neighborhoods – Properties in excellent school districts attract long term family tenants, college towns attract student tenants every year, making vacancy lowAppreciation – Is the market continuing to grow and home value increasing over time?Time on market – Are homes selling at, above or below asking price?Typical selling pricesRental market – Are there more rentals available than people looking to rent or vice versa?Gentrification – Are neighborhoods being rehabbed, built-up or repurposed into popular up-and-coming areas? Once you possess all this information, it's time to crunch the numbers till they make sense. On top of that, there are three key calculations you want to do, in order to elicit a good idea of whether or not this property is the investment you're after.1. Calculate cash flowBefore kick starting your business of rental real estate, it's highly critical that you, as an aspiring landlord or property investor, gain a concrete handle on how to calculate cash flow.Besides, cash flow is the lifeline of a rental property business. Better yet, calculating cash flow is not as complicated as brain surgery.In the realm of real estate investment properties, cash flow talks about the difference between the total rent collected (income) - be it weekly or monthly - and the total expenses (including financing costs/debts).In essence, there are two types of cash flow: negative and positive. The former means an investment property has more income than its expenses, while the latter mirrors the process in reverse. How to calculate cash flow(Cash flow = income - expenses)Calculating cash flow is a fairly simple process:Determine the gross income from the property.Deduct all expenses relating to the property.Subtract any debt service relating to the property.The difference is the property's cash flow. Gross rental income refers to an investment property's total income before offsetting expenses and/or mortgage payments. There are some properties, for instance, like a single-family rental, that will only have a single source of income, equating to the rental income itself.Others, especially commercial buildings, will enumerate additional income streams such as on-site laundry, late fees, pet fees, or product sales like key tags, caps, and more. Principally, rental property expenses, including income, will differ by property type.For example, commercial properties that have net leases may have fewer expenses to worry about than a residential rental property that gets by a gross lease.Moreover, some of the common rental property expenses look something like these:Repairs CapExPrincipal and interest paymentVacancyTaxesManagement feesUtilitiesInsuranceClosing costsWe hope you found this article useful. Stay tuned for more to come in part two, where we will expand on the three key calculations involved in analyzing a potential investment property. DisclaimerThis article is meant for informational purposes only. Hausples digs into the details of a specific topic and teaches its readers all about how the real estate industry operates. Therefore, not all articles are intended to be construed as financial, or investment advice. Hausples encourages you to reach out for professional help regarding your own real estate situation.
To Sell Or Not To Sell?
To Sell Or Not To Sell?
June 6, 2022, 5:07 p.m.
Advice
Lifestyle
Every time you find yourself faced with a major decision, do you close your eyes and allow your intuitions to take the lead, or you translate your thoughts into a list of pros and cons?For one, submitting to your intuitions can be a great way to reconnect with your innermost desires. The other is, just when you think logic and common sense are the driving force, emotions set in and take control of the steering wheel.This brings us to the crux of this article. We’ll be looking at the impact of emotions on a significant aspect of real estate: selling.You see, in wine, there’s wisdom, in water there’s bacteria, and in “selling” real estate, there’s “seller’s remorse” - to sell, or not to sell. Seller's remorse is just like a buyer's remorse, only that it's to do with a seller, instead of a buyer. As you read to the end, you will realize the parallelism. So what is it then?To begin with, seller's remorse is all about a homeowner having second thoughts about the whole idea of selling their home, while in the midst of the selling process; worse, just as when the selling process nears completion. Naturally undetected and unanticipated, seller’s remorse happens when it happens. There’s no telling when it will happen, and preparations are only in order when you understand it.Think of it as a dark force working against you. It’s dark, unseen and impenetrable, but when it strikes, it strikes like thunder. And the results are usually undesirable.Homeowners who fit the bill are often those that think they want to - and should - sell their house, eventually doing so without a hint of motivation and/or strategy. After all has been said and done, and the selling process has kick-started with the end in sight, they get this feeling that it was a huge mistake to put the house up for sale in the first instance; this particular moment instantly creates a window of opportunity for second thoughts to set in and build upon themselves, many times distressing, hence the seller’s remorse. Testing the watersSurprisingly, there are occasions where the homeowner puts his or her home on the market "just for the fun of it". Their reason being to test the market; to see how much their homes are comparatively worth if they were to sell it. And once their agent returns with an offer, everything around them seems to fall apart, because it was unintentional, unmotivational, no good reasons to, etc.For the most part, how much the seller wants from the property's sale doesn't really matter at any rate, unless a much higher offer for the property was hopelessly out of the question. Note: Testing the water may be fun and ambitious to the home seller, but it's a pointless move as far as the real estate agent is concerned, especially when you consider the fact that the agent had spent a considerable amount of money and effort towards marketing your home. In addition, the agent will not be earning any commission from this investment either, besides not earning any tangible return when the seller reveals he or she does not want to proceed any further with the sale. Why do you want to sell? To prevent seller's remorse, homeowners' decision to sell their house must come off the back of solid motivations. These motivations will comprise relocation plans, thinking the selling process through, goals, or otherwise solid reasons behind the decision to sell.For those who know their way around this distressing emotion will usually begin with a pros and cons list. In other words, a benefits versus drawbacks table as the way forward in dealing with seller’s remorse. If the benefits outweigh the drawbacks, the selling process should proceed. If the opposite is true, then don’t bother contacting an agent.On that note, a pros and cons list should be drawn up way before you start researching the market and contacting your real estate agent of choice. Grieving is imminentThere’s no shame in crying your last goodbye. It’s guaranteed, natural and accepted especially when you developed fond memories and special bonds with the home itself. A vibrant stream of emotions coursing through your veins as the closing date is at hand are rarely abnormal, but are controllable when you understand and anticipate seller's remorse. After-sale strategyStories come and stories go. Stories heal as well as break us. But no story will ever be yours truly than one with a sad ending - like another ‘fault in our stars’, or ‘blue valentine’, movies with an almost realistic touch that seem to breathe across our hearts. This resembles your last walk out the front door of your home, for one last time; signing off on an old story and looking forward to writing a new one. And that’s the thing, really. If you’ve got something to look forward to, after the sale is closed, then relocating amidst the memories and emotional attachments you have with your home may not be that dramatic after all. This is why it’s important to have an after-sale strategy in place to look forward to. Plan a trip home, or a long trip overseas to visit wantoks, so that you don’t have anything to fall back on when your thoughts try to remind you of everything former.Better yet, working with an experienced real estate agent comes with identifying the potential issues that might just lead to a seller’s remorse. Bottom lineBoth emotion and logic have an important role to play when it comes to making positive decisions - on your part. Imagine if you understood where exactly your emotions come from, you'd be able to better manage your responses, while being totally aware of how they affect your thinking and behavior. In the end, find yourself making well-informed decisions, despite seller's remorse hovering over the horizon.DisclaimerThis article is meant for informational purposes only. Hausples digs into the details of a specific topic and teaches its readers all about how the real estate industry operates. Therefore, not all articles are intended to be construed as financial, or investment advice. Hausples encourages you to reach out for professional help regarding your own real estate situation.
Why Home Buyers Fall In Love With A Home
Why Home Buyers Fall In Love With A Home
June 6, 2022, 5:07 p.m.
Advice
Lifestyle
You see, when you set the conditions for a culture to breath and evolve in a certain way, it will eventually develop itself from inescapable ideologies, influenced by circumstances that are easier to predict and anticipate - take home buyers for example.So, with due respect, this post is for home sellers who are in the process of getting their house on the market, and those who are still waiting for that elusive successful sale. Now, if you know your ideal buyer back to front, meaning you're in-tuned with what they want and what makes them tick, you've scored yourself a reasonable ground for a competent shot at a successful home sale. This brings us to the following metrics by which a successful sale can be measured: 1. Great locationIf your home is found in a prime location, you have ticked off one of the most important reasons why buyers fall in love with a home.In a different shade of blue, what if your home is in an unsavory location? What will you do to justify the 'must-own'? The answer will help you identify the sweet spot with effect, and guarantees a successful close.Additionally, it’s the values of your home  that you need to communicate and further emphasize on - enhanced by relevant tools and techniques of the trade.In other words, you need to identify the unique features of your home (big yard, a backdrop of pure greenery, great fireplace, etc) and perhaps the other potential conveniences your home has (separate home office space, study room, etc).Don’t forget the highlights of the surrounding, such as schools, transportation, sports center, and everything else that gives the location some appreciation. 2. Best value for the pricePricing plays a major role, too, in why buyers fall in love with a home. Don't forget that overpricing kills the vibe and rarely fails to extend a home's existence on the market. And if a quick sale at an affordable price is what you're after, then this is one mistake you'd want to avoid.Pricing your home correctly, undoubtedly, will make you a happy seller moving forward. 3. Curb appealPsychologically, a human being - based on first impressions - will make up their minds within 8 seconds, while in a decision-making process; likewise a home buyer.And if there's anything else that expresses that which cannot be said, on which it is impossible to be silent, apart from music, it's curb appeal.A well-kept lawn, neat flower gardens, and an ergonomically attractive front door - things that are within your leverage, synthesized with an elbow grease or a professional landscaper, and you have yourself a chair at the closing-table.You see, it goes without saying that you don’t get a second chance to make a first impression. So make it count with the curb-appeal.What’s more, a beautiful, well manicured exterior will tell a buyer that the home's interior is the same throughout. So be positive, strive for the better, and your efforts will be reflected in the curb-appeal. 3. A light-filled, spacious and airy interiorThe moment a potential buyer steps inside a home for sale, and instantly feels a serene, warmth and comforting vibe - you can rest assured that this feeling is bound to last for some time, and that's your first leverage on first impressions.A home that's clutter-free, inviting with light colored walls and natural light streaming through the windows - that's what buyers are after.Home buyers typically purchase with their hearts, and if you're able to tap into that psyche by giving them what they want - they'll be eating out of your hand (pun intended).So, if your house for sale needs some TLC, give it to it. Imagine if you were too lazy to attempt some much needed DIY's, do you think that potential buyers won't feel the same? Remember what Paulo Coelho said, "When we strive to become better than we are, everything around us becomes better." Our personality shows in what we do. If you're lazy, it will be reflected in both the interior and exterior of your house. If you're aiming to be the best one on the block, likewise it will show in the curb-appeal and everything in between. So don’t give up. If a successful quick sale is on your agenda, then you have to be prepared to do what it takes to achieve it! 4. Emphasize the “wow” factorsThere are certain words in real estate marketing that are designated for real estate listing descriptions, in order to help sell properties faster and to which they did efficiently.Listings with a title that involves a combination of an adjective and a noun - to give it some juice - such as a 'quartz countertop', 'island prep sink', or a 'wooden front door' returned with impressive results, than those that lacked these elements.You may have one or more of these features - that's wonderful. But, there's always a 'but', if you understand them to the point where you can easily effortlessly call attention to them, you've closed the sale, period.All in all, the list of “wow” factors does not stop here. There are other attributes of the house that are just as likely. You just need to uncover and bring them to attention. If you have hardwood floors covered up with wall-to-wall carpet – you’re hiding a potential star of your home. Built-ins are another feature that home buyers want, and more. Again, your job is to figure them out and shed light on them. 5. Updated to excellent conditionWhen a prospective home buyer finds a house clean - up close and personal - without any signs of deferred maintenance, it tells the buyer that the house is near to one's heart, and may just lead to an offer at that instant.Remember, buying a house is one of the biggest financial decisions in one's life. So, be smart and ensure that all potential problems are attended to and rectified before the home inspection. Unless you want the inspection to conclude halfway, without the buyer ever making it past the dining room, your things-to-do list before the inspection should be completely ticked off.So, take care of any problems in your home. Fix the leaky faucet, upgrade what needs to be upgraded. Your buyers will appreciate it.  If you’re not sure of any issues, it’s a great idea to have a pre-inspection done, just to be on the safe side. 6. Capture the buyer’s heart with a beautiful home stagingOf course, this is one of the main reasons why a buyer will buy! When a home is staged it’s designed to sell – not to be forgotten. We are not talking about decorating…we are talking about being strategic. A professional stager will zero in on what the target buyer in your area is looking for. Making your home memorable and appealing to that market should be high on your priorities list.  Begin by using art, color and lifestyle touches to attract a buyer’s eyes to the key features and assets of your home – to make sure that the buyer notices and remembers them. Help maximize the spaciousness and bring out the intrinsic beauty of each room to create the perfect package. Staging, coupled with professional photography, can attract far more buyers to the home in those crucial first weeks while on the market. More traffic = greater possibility of offers. There’s a reason why staged homes sell quite faster than non-staged homes. Add to that a great real estate agent who is a savvy marketer and you have the formula for a very fast and profitable home sale.  DisclaimerThis article is meant for informational purposes only. Hausples digs into the details of a specific topic and teaches its readers all about how the real estate industry operates. Therefore, not all articles are intended to be construed as financial, or investment advice. Hausples encourages you to reach out for professional help regarding your own real estate situation.
Difference Between Loan Prequalification And Preapproval
Difference Between Loan Prequalification And Preapproval
June 6, 2022, 5:07 p.m.
Advice
Home Loans & Insurance
Pre-qualification and pre-approval are real estate financing terms that are synonymous with the loan process, and each varyingly punctuate the level of commitment a lender has with a customer/buyer.Unfortunately, at least a majority of us here in PNG aren’t really intune with the meaning of these concepts; either we’ve heard about them but never gave much thought to their differences, or we just couldn’t make time to understand their existence and how they affect the home buying process.Nonetheless, in this article we’ll document the differences between both terms and focus on their appropriation in a home buying process. The thing to keep in mind is that a slight misunderstanding of their differences can cause the home buying process to stall. So the aim of this article is to make sure you understand both terms to their core, and when they’re used interchangeably in a home buying process.  Pre-qualificationThe prequalification, more or less, immediately comes into view the moment you find yourself in a home buying process.It's not uncommon for many home buyers to avoid a loan/mortgage with an overwhelming intention to buy a house. Once the inclination is there, getting a loan becomes a prerequisite in the home buying process, because you will want to know if you're eligible for a loan, and what type of loan will you qualify for, respective of your credit history and financial status. By the rights vested upon lenders, once your loan application has been submitted, they (lenders) will proceed to clarify the following questions:How does your credit look?How much house can you afford?What type of loan will you be using? On average, your credit history or credit rating score is the overriding factor in this story, as it will help determine your eligibility to get a loan, what type of loan suitable, or neither; hence, your strong advocate or your nemesis.Mind you, the lender will pull your credit history/score to pieces, to weigh your eligibility, and a handsome score of say, 700 or better, will go as far as qualifying you for the loan in question. It’s also at a position where the interest rates will gradually shift-shape for the better. When all is said and done, you will find that a conventional loan normally attracts huge down payments. This is why loans such as BSP’s First Home Ownership Scheme are popular among those borrowers who have grasped its purpose.  Loan LimitsIn hindsight, with every other loan like the FHOS, there are drawbacks. For one, they have limits, and for the other, they aren't suitable to all property types and developments. For instance, Anitua properties are FHOS approved, compared to several other developments.But this shouldn't be a major concern, although it's worth the mention, because your real estate agent or lender will have you covered in terms of professional advice. What should be of importance here is your understanding of prequalification.The point is each loan type, First Home Ownership Scheme or not, comes with individual, unique limits; nonetheless, prequalification remains a force to be reckoned with in each case. Your cognizance of these limitations will be clear the sooner you reach the prequalification stage.Being pre-qualified means knowing:What type of loan are you going to get? Traditional or FHOS?How much cash, if any will you need to put down.What’s the plan for paying closing costs?Any limitations on the type of property you can buy.The next step that’s readily on-hand to greet you in this story is the pre-approval. But before long, you must begin your journey with properties that directly or indirectly open to the type of loan you’ve pre-qualified for.For instance, once a home seller accepts your offer, the property in question is taken off the market; provided there’s proof of your pre-qualification, because anything less will not render the sale close. In other words, if the lender disqualifies your loan application, the seller will not take the house off the market. However, this is also one moment where the seller can easily become emotional (seller's remorse), and may actually ask to keep the earnest money, instead. But not unless the agent, acting on behalf of the buyer, effectively resolves this problem and ensures the earnest money goes back to the buyer. The best practice, then, is to take pre-approval by the horns. Pre-approval Pre-approval is the stage at which you've submitted a detailed loan application, and the lender has:Sighted your applicationAgrees with what you’ve providedNot yet given the full approvalFor the most part, a pre-approval paints a clear picture of the maximum funds available for the taking, helps you negotiate with certainty, and if you're involved in an auction, you'll be bidding with increased confidence.However, the surprising thing with a pre-approval is that it’s not a necessary evil in a home buying process. But it does make life easier for the borrower, because of its power to bring you closer to your new family home, or dream investment property. How Pre-approval worksPre-approval is the lender’s commitment that you qualify for a particular loan type and amount based on your income and credit.If everything looks good, the lender will generate a pre-approval letter and a “Good Faith Estimate of Settlement Costs”. These are important documents to have when shopping for a home as they prove to both sellers and their agents that you have the means to buy their house. These documents are generally good for 60 to 90 days.The approval letter is a letter from the lender stating that based on the information they have, you qualify for a loan. This letter also gives the amount of the loan you qualify for.A good faith estimate is a standard form that outlines and discloses the fees associated with your loan. Lenders are required to provide this document.At this point, you are “pre-approved”. The lender waits for us to send them a contract for a particular property. At that point, they start to work on getting a full loan commitment. Full Loan Commitment Requires:Contract on PropertyAppraisal on the propertyIn some cases, the Inspection ReportUpdated paycheck stubs for the months before closing.Bank statements for the months before closing. Pre-approval is the lender’s way of saying they are willing to loan this person X amount of money. It now depends on the house they want to buy. The appraisal, and in some cases the inspection report of the property, will determine if the lender is able to make a full loan commitment to the buyer. In other words, are they loaning on a good investment? If the buyer defaults and the lender has to take the property back, will the lender be able to resell it for the amount they loaned on it?No matter what type of market, it’s always wise to start the home buying process with prequalification and preapproval. This path gives you, the buyer, more leverage.  DisclaimerThis article is meant for informational purposes only. Hausples digs into the details of a specific topic and teaches its readers all about how the real estate industry operates. Therefore, not all articles are intended to be construed as financial, or investment advice. Hausples encourages you to reach out for professional help regarding your own real estate situation.