GUESTHOUSE CONDOMINIUM CORPORATION

Guesthouse Condominium Corporation (GCC) operates a real estate business

who specializes in rendering consultancy services. The company was approached one
day by a prospective client - Mr. Santos who has just retired from his private
employment. He intends to go into private business and requested the GCC to look for
a site suitable for his garment business and at the same time place for his new
residence.

After interviewing Mr. Santos, the GCC found out that the Santos family was
about to close the sale on his house in Paco area. With his wife and three (3) children,
they were looking forward to moving out of congested Manila into a suburb and at the
same time put up their business. This had to be within 2 l/2 weeks time. The family
had expressed many requirements, some conflicting, as to what they wanted their new
property to be.

The Santos Family

The old man, Mr Santos is in his mid fifty’s who has just retired from a private
garment manufacturing firm. He has been the plant manager until his retirement as
Vice President and has received substantial amount from his retirement.

The wife is an insurance underwriter who makes it as her part time job. She is
most of the time concentrating as a house wife and mother to attend the household
needs. Mrs. Santos was adamant about not wanting a property that is located in
“tumbok” lot, and she expressed a preference for one that is an elevated place.

Two of the daughters are still single and gainfully employed in Makati district, the
youngest of which is in her junior year in college.

The Santos’ requirements were straightforward - the residence and plant site
must not cost over P8,000,000.00. They wanted a single storey house and a
warehouse type building on a lot not smaller that 500 sqm. He wanted the GCC to find
the property in a less populated area which is just suited for their retirement age. He
was also concerned about the distance of his new residence to the office and school of
his three children. He wanted one that was the closest to both but definitely not more
than one hour away. One of the children on the other hand wanted a property near
commercial center and far away from school as possible.
The company has found 3 properties that may suit the family’s requirements:

Property A

This property is located in Valenzuela, Bulacan. Lot size is 500 sqm. and cost
P7,990,000.00. This area has a potential for commercial complex. Resale value of
property is therefore very good. The lot is slightly more elevated place than the
surrounding area and is not a “tumbok”. It is about 45 minutes away from the
children’s office and 30 minutes from school. The property is well maintained and
relatively quiet. However, since the property is located near progressive village, there
is a probability that flow of traffic and noise may increase in the future considering also
the prospect for commercial site. The property is available immediately.
 Property B

The property is located in Binan, Laguna It is also a combination of single storey

house and warehouse type property and sits on a 500 sqm. but costs more little than
property A. The location in terms of nearness to office and school is good and a little
less than 30 minutes from school and just about 20 minutes from the office.

The property is near the village park and association club, beside a school, and
a few meters away from modern factories. All these could very well indicate a poor
traffic flow situation. The land in this area is known to have a steady appreciation value
and there are always people around just willing to buy a piece of property here,
especially corner lot as this. GCC files did not give any information as to the elevation
of the place. But from what the company knew of the area, it is seemed to be on the
same level. The files showed that this property was mortgage and it could very easy to
take less than 2 1/2 weeks to come up with clean title.

Property C

Property C is in a village near Antipolo. It is not as developed but it affords a lot

of country side atmosphere. This could have been aptly called rolling hills subdivision
due to its many hills and valleys. The sun seems sunnier here and the air definitely
fresher. The size of the lot is 650 sqm. with split level house and warehouse type
facility costing P7,950,000.00. It is located on top of one of the hills and is in a
“tumbok”. The value of the land here has not significantly appreciated in the past
years. However, with the Henry Sy’s SM Group undertaking, the development of
industrial and commercial complex nearby, it is expected that the value of the land
would be affected and could appreciably increase. This property is a bit far from
school, 50 minutes but well within 45 minutes away from the office. The title is clean
and the transfer can be executed within 2 l/2 weeks time.

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1. If you are to advise Mr. Santos, which property will you recommend?

2. Which among the consideration will you give greater weight?

3. Provide a recommendation that will address the short and long term
commitment in location decision.