Real estate is a tested means of investment. A good number of people who choose to invest in real estate do so for this purpose. With great deals from property developers and flexible financing options from banks, owning a condo is easy.
So, how exactly does one make money from buying a property? Earning from your condo unit sounds like pretty easy money, but one needs to determine which set up works best with his or her expectations. Before putting up an ad, make sure you have drawn up contracts and set up the necessary paperwork to protect yourself in deals that you will enter into.
Start earning through short-term rentalsWith hotel room rates going through the roof, you cannot blame why travelers seek out better deals. Residential condominiums are also now a great alternative to these pricey hotel room rates. Room service may not be available, but the savings are worth the trouble of ordering take out instead.
Personally advertise or sign up with reputable sites to match you with potential clients. You can set flexible rates on a daily, weekly, or monthly basis. This set up is best if you still want to get a chance to use your unit every now and then. This scheme is quite demanding in terms of time and effort though as you would need to evaluate each potential occupant and their activities, as well as need to do major cleaning in between bookings. On the upside, rates for short term deals are much higher than what a long term lease can give you so you can potentially earn double of what you would normally get compared to a regular annual lease.
Maximize earnings through long-term leasesFor someone who has a regular job or a full-time business that takes most of his time and rarely has time to tend to a unit more than once a month, it is more cost effective to find a long term lease taker. This would mean at least a one year contract. Some condo owners are fortunate to collect rent that is almost the same if not more than their monthly housing loan amortization. Imagine earning a little extra each month with a property under your name.
Finding interested parties can be as simple as posting ads on the “classifieds,” sending updates on social media, creating a blog or talking to an agent. The options are endless, and the potential for income is high.
Buy at the pre-selling price and sell when RFOThe cheapest deals are offered a few years before the anticipated turnover. If you can afford to spare some cash without the immediate expectation of returns, this may be a good option for you to earn from a condo unit.
By the time the construction is done and the property is turned over, you would be ready to pass it on to a buyer raring to move in. When opting for this, make sure you only deal with a reputable developer so you will not end up frustrated with delays, or worse, a dud. There are too many stories of people entrusting their hard earned money to a developer promising to complete a project within a couple of years, but end up getting less than their money’s worth, or worse, no property to turnover at all. Manage your expectations and always get to know the company you are investing in.
Improve your condo unit by fixing and flippingThere are different ways to curb the depreciation of properties overtime. One way to increase a unit’s asking price is by making smart improvements. As units are turned over bare, they stand to attract more buyers by providing extra perks such as installing extra shelves, dividers, and sprucing up the floors and walls.
If your budget permits, including furniture and basic equipment is a great idea, as you’d be surprised how people are more willing to pay extra just to save them the trouble of canvassing and shopping. Aside from making it look nice, ensure that major systems of the unit such as the electrical and plumbing systems are in good shape. And of course, if all these are done in a tastefully clever manner, you can absolutely command a good price.
A condominium does not have to stay a dead asset. Turn it into a real and rewarding investment by simply following any of the simple steps discussed above. Do you have any tips to add? Share it with us in the comments below!
Looking to buy your first big purchase?
Whether it is a white picket-fenced dream home or a new unit in that high rise condominium, there are two additional considerations that you need to weigh before you take the leap: getting a bank to finance your purchase, or leveraging on the available in-house financing options. In-house financing options are technically not loans. These are extended payment terms with above average interest rates.
Perhaps the best way to initiate your decision-making process is to first understand your current financial capacity. Is your monthly salary enough to pay the required monthly fees? Would you rather make bigger payments per month at a lesser term, say 5 years only? Or are you less liquid financially than you would like to believe? Being honest with yourself about your current finances is critical in making that final decision.
Let’s take a look at the significant differences between the two types of financial assistance you can get.
How They Assess Your Eligibility as a BorrowerBanks are known to be particularly stringent in their loan application processes, requiring a handful of documents that need to be submitted. These documents such as financial statements, Income Tax Return, certificate of employment, pay slips, business registration and valid identification will have to undergo review and investigation.
For employees, you must meet the basic minimum requirements, such as regular employment for the past two years and a gross minimum monthly income of P30,000, to name a few. If you’re self-employed, your business needs to be in operation for at least two years, and with significant profit. Essentially, the documentation will be used to assess and to convince the banks that you are capable of remunerating the money they will loan, plus the additional interest. Your loan approval is contingent on the result of the bank’s review.
In-house financing, on the other hand, does not require that much paperwork outside your certificate of employment or source of income. As such, there is low risk for your loan to get denied. Your down payment, usually 10% to 30% of the total price of the property, is more or less enough of a guarantee for your in-house financing. Because it doesn’t undergo the same rigorous review, in-house financing is relatively “easier” to comply with in comparison to the bank loan application and is also less time consuming.
How They Compute Your Loan’s InterestBank loans, for all their strictness during the application process, do provide a lower interest rate for home loans. Ranging from 5% to 12% per annum, the rates provided are also fluid enough to decrease, depending on the economic conditions. There are some bank loans that can offer fixed interest rates for a decided term, ranging from 1 to 5 years, which will be reassessed according to existing rates after the term is completed. However, this also means that rates can increase if the economic environment dictates so.
Although not requiring too much paperwork at the onset, in-house financing actually has a higher interest rate compared to banks. With a range of 14% to 18%, it is significantly greater. But because these rates are fixed, it is also not subject to economic volatility unlike that of the banks.
How they Dictate the Payment TermsHow long are you willing to pay for your mortgage? Do you prefer that the payments be dispersed over a number of years? Or would you rather get it over and done with? Depending on your financial capacity, payment terms for bank and in-house financing can work to your advantage.
The main difference between the two is that bank loans come with longer payment terms. You can opt to pay out the loan amount in as short as 5 years, or as long as 20 years. In-house financing, however, prescribes a shorter period to settle the balance, usually up to 5 years only.
Other Factors to ConsiderThe process of getting a bank loan can also be an expensive one. During the application, the bank will charge for property appraisal fees, handling fees, notarial and registration fees, among others. Added together, these fees can balloon up to P7,000.
The best way to get the most out of in-house financing is to apply for it during the pre-selling stage of the property. Real estate developers usually provide a significant discount during the pre-selling stage, 30% cheaper than a finished unit, which taken as a whole can create bigger savings for you. But this also means you have to wait years before the unit or property is turned over to you for occupancy.
Irrespective of the financial vehicle you acquire, do not forget that you should only invest in reputable developers to ensure quality property. It is your dream home, after all!
Which financing option do you prefer? Tell us in the comments!
In recent years, condominiums have become one of the best real estate investments in the Philippines because of its current and instant marketability. According to a report by Urban Land Institute and Price Waterhouse Coopers, Manila was the fourth best property investment market out of 23 Asia Pacific cities in 2014.
Buying a condo allows an individual to choose a home in the most strategic location with the potential to re-sell the unit or have it leased for a considerable return on investment. And even with the rise in competition, being in the market of condominium sales and purchases remains to be promising.
If you are planning to re-sell your condo, you might want to do some renovations to make your unit more appealing to your prospective buyers. Renovating your condo does not have to be over the top, but you should make the type of enhancements that will allow you to re-sell at a good price.
Check with your property manager what the rules are in terms of renovating your condo unit. Not all developers have the same policies, so make sure you know specifically what actions are allowed in your building. Once that is done, you are all set to give your condo a makeover.
Here are some renovation tips to help you win the sale amidst your competitors.
Add a Fresh Coat of Paint
Adding a fresh coat of paint is an inexpensive way to transform your interiors and make it look new. Paint the walls, moldings, and ceilings with a light neutral color to make it look contemporary and appealing to a wider range of demographics. Currently, popular choices are beige, gray, and off-white. Choosing light hues for your walls is also a great way to create an illusion of a larger space, which is ideal for studio-type units.
Give Your Kitchen a Makeover
The kitchen is the heart of any home, so make sure this area is updated to look bright and spotless. Buyers are easily turned off by leaky faucets and stained sinks, so make sure you make the necessary repairs and replacements.
Make a dark kitchen brighter and more spacious by using a lighter finish on the cabinets. Replace an outdated kitchen countertop with a new laminate for a more modern look. Laminate countertops are inexpensive and come in different colors and patterns. If your cabinets are still in good shape, add a fresh coat of paint and replace the hardware. Otherwise, replace the cabinets. If your budget is limited, get new doors and drawer fronts instead, then paint everything else and add new hardware.
Revamp the Bathroom
Just like your kitchen makeover, a few smart choices can go a long way in raising your condo’s value. With a few stylish upgrades, you can make your condo a very competitive option in the market.
For your bathroom, consider installing new countertops, sinks, and faucets. Add ample cabinets and room-enhancing light fixtures. Use soft lighting and warm colors. Vases and small indoor plants can be added as design elements. Keep the counters clean and smelling fresh. Replace plumbing fixtures, repair and repaint the cabinets, and enhance the mirrors with molding or frames.
Enhance the Lighting
Lighting is one of the most powerful yet cost-effective ways that one can improve a condo’s look and market value. Consider replacing dining room lights with semi-flush mount lights or ceiling pendants. Wall sconces are great lighting options also for small condo units. If you want to add ambient lighting, install recessed lights. Dimmer switches will allow for convenient adjustment of lighting intensity to suit different activities and moods.
Add Extra Storage
Having ample storage is very important for potential home buyers. It is essential to have built-in closets, shelves, and cabinets to help future home owners or lessors keep their space organized. If you are offering a semi-furnished unit, you might want to consider custom-built beds or sofas that can double as drawers. Floating shelves are also very popular today.
If you want to receive a substantial profit from your condominium investment, these tips should help you enhance your property well enough to be able to close a sale without going over your renovation budget. The key is to make your condo a place where you yourself will be very happy to move into – a clean and cozy place with a refined interior that does not need any repairs and replacements.
Everyone dreams of being able to buy their own home, especially among Overseas Filipino Workers (OFWs), who are oceans and continents apart from their loved ones so they can improve their quality of life. So it is nothing short of encouraging when OFWs are empowered to purchase homes for their families or as part of their additional investment.
If you are an OFW looking to purchase your first property, it may seem overwhelming to maneuver the logistics of being thousands of miles away. But it doesn’t have to be. With the assistance of trusted real estate companies, available financing options, and the help of your family and friends, purchasing your dream home can be done without a hitch.
Intent of the propertyKnowing your intent in purchasing the property is the first step to understanding the requirements. Are you planning to buy a big house that can comfortably fit your entire family? Are you looking to acquire a unit in the mid- to high-rise range near the business district? Or do you plan on eventually renting it out? Recognizing your intentions will also assist in narrowing down other considerations such as the property’s location, available amenities, accessibility and the like. Another factor to consider is whether you prefer to buy during the pre-selling stage or if the unit needs to be ready for occupancy.
Choosing a DeveloperOne of the integral parts in the entire process of buying a property is finding a developer that can be trusted. With the rise of the real estate industry in the country, it has also seen its fair share of fly-by-night developers who can easily take your hard-earned cash. It is extremely important to choose a developer with an excellent track record in providing quality and timely output. Research the best developers for the type of property you intend to buy.
Appoint a Power of AttorneyTo make sure you complete the required documentation, appointing a trusted attorney-in-fact (same as Power of Attorney) is a crucial role in the process as he/she will be representing you in the entire purchase.
Once you have made the decision on which property to purchase, the property agent will facilitate the sending of the Special Power of Attorney (SPA), which you will sign, have notarized and consularized at the nearest Philippine Consulate. The Consulate will then mail the documents to your attorney-in-fact.
Upon receipt of the SPA, your attorney-in-fact can now reserve your chosen property. The signing of reservation forms and payment of fees is usually required during this time.
Complete the PaperworkPurchasing a property requires a ton of paperwork. Keep a list of the required documentation, and work with your attorney-in-fact for timely submission.
The usual mandatory requirements for purchasing property are listed below, but it may also vary depending on your chosen developer:
Post-dated checks are also usually the preferred mode for the down payment. If you do not have a checking account yet, you can ask your attorney-in-fact to open one, and you can just fund it.
Monitoring of the constructionIf you’ve chosen to buy a property during the pre-selling stage, it is also crucial to keep tabs on the construction site and the timelines. Your attorney-in-fact can help in monitoring the status and developments for you. Ask him or her to send you updates and pictures if possible. One of the advantages of purchasing a property from a legitimate and trusted developer is you are almost always sure that there will be no delays in the project.
Inspection and turnover of the propertyPerhaps the most exciting part of buying a property is finally getting the keys! During the inspection, make sure your attorney-in-fact or other family members are present to look through and scrutinize the unit. You can give them a list of things to look out for, such as water leakage, holes in the walls or floors, missing or broken tiles, amongst others. It would also help if they can bring with them an experienced inspector to ensure nothing is missed before the turnover. After all, this is your dream home!
Are there any additional steps you can recommend to OFWs looking to buy property? Tell us in the comments below!
Based on the results of the 2014 Survey on Overseas Filipinos, the total number of Filipinos dispersed across the globe is 2.3 million. While Overseas Filipino Workers (OFWs) come from diverse backgrounds, their common denominator is the critical role they play in strengthening our economy, primarily through their remittances.
The increased purchasing power of OFWs, whether channeled through remittances or through their savings, has also encouraged their financial literacy. This is either directed towards investments such as stocks, bonds and mutual funds, real estate or small to medium businesses. According to the 2014 Consumer Expectation Survey of Bangko Sentral ng Pilipinas (BSP), there was an increase of 46.6% in the remittance allocation towards savings and other investments, the second highest percentage since 2007.
But this is also not to say that OFWs do not need financial assistance. Whether they are returning OFWs, or currently employed abroad, they also need the aid of both public and private financial institutions to help them achieve their goals.
Joanna, an OFW from the UK who just invested in her future home at Megaworld at the Fort, says that “the beauty of these loans is that it’s fairly easy to apply for even if you’re not in the country.” She also adds, “most of the banks now cater to OFWs, and they even have specialized packages for us.”
Eligibility and Basic RequirementsRecognizing them as viable candidates for financial assistance, there is now a growing list of banks that provide financial assistance suited to the needs of our OFWs.
If you are an OFW planning to apply for a loan, you must be at least 21 years old and not more than 65 years old upon maturity of the loan. You must also have an ongoing contract with you employer, and you must also be employed at least for the last 12 months.
Across all the banks, the common loan requirements include a government-issued ID, a Certificate of Employment or a POEA contract, payslips for the past 3 months, a proof of remittance for the past 3 months, a notarized or consularized Special Power of Attorney and a filled-out loan application form.
Types of OFW LoansThe types of loans that OFWs can apply for are varied and are also available to them regardless of where they are in the world. With everything being connected by the internet, as well as the existence of pilot or partner branches and offices of some of the bigger local banks, distance is not a problem when it comes to applying for bank financing.
Joanna shares that she was scared at first to try her hand in getting a home loan. “It can be nerve-wracking especially for a first timer!” But because she secured all the necessary requirements and sought the support of her family, all things came into play. She now has a condominium to come home to in Cebu once she settles in for good.
With competitive interest rates, and the influx of readily available properties and condo units, the home loan is one of the more popular loans available for our OFWs. Because really, who doesn’t want a new home for their family?
Eligible home loans include the purchase of residential lots, house and lot, condominium or townhouse. Bank financing can also include renovation or expansion of existing homes, or refinancing of existing mortgages. Most financial institutions can provide a minimum loanable amount of P400,000 up to P2 million. These can be paid out from a minimum of 5 years, or for as long as 15 years.
Personal or Salary Loan
If your family needs that extra cash, whether it’s for a vacation, or even for health reasons, there are personal or salary loans that are available for OFWs. Some banks offer these types of loans with a fixed monthly payment and flexible payment terms.
The minimum amount for most personal loans is P10,000, but it can also go up to P3 million. OFWs can also apply specifically for car loans.
Business LoanReturning OFWs can also apply for business loans once they reintegrate back to the Philippines. Those wanting to set up shop back home can apply for business loans in both private and public financial institutions. With credit facilities being set up specifically for OFWs, they can now apply for that initial business capital, ranging from P300,000 up to P2 million.
Regardless of the type of loan our OFWs apply for, it is important to note that loan applications need to be coursed through legitimate and legal channels. With their expanded financial resources, OFWs need to be a lot smarter with where they invest, and who they trust with their hard-earned cash.
Do you have any additional tips for our OFWs looking at bank financing? Tell us in the comments below!
The Philippines continues to exhibit significant economic potential and long-term sustainable growth, proving that it is, beyond doubt, a good investment country.
With the boost in anti-corruption campaigns, increased government spending on public-private partnership (PPP) projects, and the efforts towards the ASEAN Integration, “the next Asian Miracle”, as the World Bank Doing Business Report puts it, secures its economic and political status in 2015.
The Philippines is the fastest growing economy in the ASEAN-6, with a 6.1% Gross Domestic Product (GDP) growth in 2014. Forecasts for this year, on the other hand, show an even greater promise. A 6.6% GDP growth is expected, which substantially towers over ASEAN’s 5.2%, Asia’s 4.6%, and the global 3.3% forecast according to KMC Mag.
Accounting for a large part of the GDP growth is strong private consumption with a 5.4% year-on-year increase. Meanwhile, OFW remittances remain a fundamental factor for economic growth gaining over 6.2%, or approximately $26 billion from more than 10 million Filipinos.
Strong Investor Confidence
The Philippine economy continuously attracts strong investor confidence accounting for a $6.2 billion increase in Foreign Direct Investment (FDI) in 2014. Other than the expansion of existing foreign business operations, these FDIs are also used to finance new job-generating enterprises.
Due to ongoing debt reduction, improvements in fiscal management, favorable prospects for economic growth, and limited vulnerability to common risks affecting emerging markets, Moody’s promoted the Philippines to a BAA2 rating — an indication of a strong economic potential.
Rise in Rankings
The numbers continue to speak for the Philippine economy as its rankings across reports and indices jump a couple of notches.
The Wall Street Journal and the Heritage Foundation’s Economic Freedom Index rates and ranks economies in 10 categories namely business freedom, investment freedom, monetary freedom, government spending, property rights, freedom from corruption, financial freedom, labor freedom, fiscal freedom, and trade freedom. The Philippines consistently improves its overall standing currently sitting as no. 4 among ASEAN nations, and at no. 76 in the world. It is the most improved country since 2011.
The World Bank Doing Business Report, on the other hand, evaluates business regulations and their enforcements, and ranks economies accordingly. With a 53-notch jump from 2011, the Philippine economy holds the record for the largest gain in the region. It is currently no. 95 out of 189 countries, and is no. 5 among ASEAN nations.
Prospects of Real Estate
The increasing demand for real estate properties presents opportunities for developers and investors alike. Central business districts and other prime locations in Metro Manila have been transformed into principal residential and commercial communities, paving the way for new investments and bigger markets.
Megaworld at The Fort, for example, has established developments that respond to the nation’s upward growth and rising demands. Premier condominiums, top-grade offices, first-class leisure attractions, reputable academic institutions and chic commercial destinations occupy leading townships such as Uptown Bonifacio—compellingly reminiscent of the Philippine’s flourishing economy both now and in the future.
With the recent upswing of the Philippine economy and Metro Manila landing as the 8th top city for investment and development prospect in the world (Urban Land Institute Pacific), Bonifacio Global City has taken a rapid turn as the fastest growing Central Business District (CBD) in the region.
Major corporations such as HSBC, JP Morgan Chase, Chinatrust, Deutsche Bank, Oracle, Thomson Reuters, and Sun Life have flocked into one of the most sought-after business addresses in the country, attracting investors, multinational companies and emerging BPO firms. Additionally, there has been an increase in infrastructure and real estate development, thus accommodating the growing demand for quality residential areas within the global district.
A Smart Investment
ChoiceThe Philippine property market is booming in 2015, as developers, investors and buyers realize the potentials of the country and its CBDs, most especially BGC. Townships are being built by leading developers such as Megaworld, offering only the best cosmopolitan experience the world has to offer—premier condominiums, top-grade offices, first-class leisure attractions, reputable academic institutions and chic commercial destinations—a conglomeration of its signature elements, LIVE-WORK-PLAY-LEARN-SHOP.
These sustained developments, among others, account for BGC’s 38% increase in land values and 6% increase in capital values, as well as its impending economic growth. Meanwhile, rental rates experienced a 5% increase, projecting favorable returns on investment for both residential and office landlords (KMC Mag).
Examining other Metro Manila CBDs, on the other hand, gives a better view of BGC’s overall standing as a flourishing commercial district. With a 6% property yield, it surpasses Makati’s 5.5% and Ortigas’ 4.4%—concrete proof that it is one to watch out for.
Global City, Global Community
The Philippines has the 3rd largest English-speaking population in the world, and Metro Manila is one of the lowest cost destinations in Asia. It also ranks 2nd among the world’s top BPO destinations (Tholons). These are influential factors as to why more and more expatriates and foreign investors are considering the country for settlement or as the base of their operations.
Furthermore, BGC is strategically located near EDSA, C-5 and SLEX, making it accessible from all points of the Metro, and advantageous to firms or individuals alike. Residents and visitors also continue to find their place here as it boasts of convenience, luxury, modernity, and multiculturalism.
Existing and forthcoming developments, such as Megaworld’s newest township, Uptown Bonifacio, also contribute greatly to its progress and prominence. Condominiums, offices, museums, hospitals, schools, clubs—the finest of everything in a single, intelligently-designed site. Rising from the ground and bringing color to Taguig’s skyline, these have turned Bonifacio Global City into a melting pot of cultures, a breeding ground for young professionals, and a front runner in today’s competitive real estate market.
The Philippine economy is booming, interest rates are low, and the cost of property is one of the lowest in the Asian region – especially if you compare it to countries like Thailand and Hong Kong. All these show that there is no better time for young professionals to invest in a condo. As long as you have a stable job, good credit history, and adequate savings to cover the downpayment, you can already buy that dream home at a very young age, and take full advantage of property value appreciation over the next several years. Here are some tips to help you shop around for the best condo that will fit your budget.
The Philippine economy is booming, interest rates are low, and the cost of property is one of the lowest in the Asian region First, consider how the location of the condo fits into your career plans. Where will you be most likely to work? Most professionals will gravitate towards areas near the metropolis’ business districts. The Bonifacio Global City (BGC) area is the ideal location since both Makati City and Ortigas are both just a short drive away. In fact, BGC is becoming a formidable business center in itself, attracting several multinationals and even embassies.
The Bonifacio Global City (BGC) area is the ideal location since both Makati City and Ortigas are both just a short drive away. Given this, it’s counterproductive to buy a “cheaper” condo outside of Metro Manila. While property values are lower, you will also be spending more every day on gas and toll fees. The discomfort of the commute may even prompt you to get another place closer to your office, which will take a toll on your monthly budget — instead of living in the condo you already own, you’ll have to think about rent.
Condos in Makati also tend to be smarter investments. For example, Megaworld at the Fort is developing a new township in Fort Bonifacio, Taguig City. Considering the premium location and Megaworld’s reputation, the units that are being pre-sold today will skyrocket in value within the next decade.
Second, get a very clear picture of the costs. Schedule a meeting with the sales agent or real estate broker, and get a breakdown of the down payment, monthly payments, and other expenses such as the property tax or bank processing fees. Online mortgage calculators can also help you do initial computations while you’re comparing properties.
Schedule a meeting with the sales agent, and get a breakdown of the down payment, monthly payments, and other expenses. Aside from knowing the cost of the property, you need to honestly look at your capacity to pay. Online loan calculators can also give you an idea of how much you can borrow from a bank based on your salary, though it’s best to go to a bank and discuss this with the bank officers.
Don’t forget to look for other payment options as well, such as government programs like Pag-IBIG and the Philippine Social Security System(SSS). Visit those websites or talk to your company human resources officer to get an idea about how to take a loan through these organizations. While the HR cannot help you get the loan, they may have brochures or guidelines that can get you started on your inquiry process.
Look for other payment options as well, such as government programs like Pag-IBIG and SSS.Once you speak to the lending institutions, get loan pre-approval. This will give you a very definite picture of what you can afford, and will quicken the process when you finally sit down with the property sales agent or broker. Loan pre-approval also shows that you have a serious intent to buy, and this will help on your negotiations. For example, while most will require a down payment of 30 percent, you may be able to ask for a 20 percent down payment.
But before you sign the contract, check the general location of the unit and ask for a tour of the building and unit itself. Write down questions to ask the agent regarding maintenance or community policies, restrictions on design, or even something as simple as, “Do you allow pets?” Bring a tape measure so you can take measurements of the area, such as the corridor and doorway space. Take pictures with your camera phone as well, not just of the unit but the facilities, lobby, and surrounding areas. You may also want to see the area during a rainy day, to see how it’s affected by flooding.
Before you sign the contract, check the general location of the unit and ask for a tour of the building and unit itself. You can even go to the unit area during rush hour and time how long it takes to drive from there to your office when traffic is at its peak. You may also want to schedule a visit at night, to see how well-lit or safe the neighborhood is, and check surrounding establishments and conveniences. Are there restaurants you can go to if you don’t feel like cooking dinner? How far is public transportation, in case you can’t take your car? Is there a gym nearby? These are the small comforts that can really make life easier! Of course, developments owned by Megaworld already have these conveniences, since the residential developments are clustered with recreational, dining, and shopping centers (much like what Megaworld did for Eastwood or McKinley).
“More expats are buying luxury condos in the Philippines.”
This was the statement made by CBRE Philippines senior director for research and consultancy Jan Custodio in an interview with ABS-CBN. CBRE is an affiliate of CBRE Group,a Fortune 500 and S&P 500 company based in Los Angeles, and is the world’s largest and recognized commercial real estate services firm.
“More expats are buying luxury condos in the Philippines.”Custodio says that expats are taking advantage of the 60-40 ownership ruling under thePhilippine Condominium Act in order to buy units, which is more cost-effective than renting. A significant number of expatriates spend many years in the country because of business — either working at a multinational or entering joint ventures with local firms. “By the time they have to leave, they sell their units and make a tidy profit as well,” explains the real estate expert.
Industry trends show that expats prefer luxury condos based within Makati or Taguig’s
Bonifacio Global City, which is touted as the country’s next business hub. Rental rates in these areas are very high, and can hit up to P250,000 a month. Expats compute the cost of staying there for several years, and see that buying a unit makes more financial sense.
Asian real estate investors also see that real estate prices in Manila are much better than those in other countries. Singapore, Hong Kong and Korea also have stricter rules and higher taxes for foreigners buying properties.
Bonifacio Global City, which is touted as the country’s next business hub. Asian real estate investors are also becoming keen on the Philippines, as Hong Kong and Singapore have implemented tax measures to make it difficult for investors and speculators to buy properties there. “From an overseas perspective, the Philippines looks very cheap and cost-effective, from an investment standpoint, at a per square meter basis,” CBRE chairman Rick Santos said.
A separate report on the Global Property Guide website supports Santos’ observations. The article gives a chart on the costs and yields of different condo units. While capital gains taxes can be higher for foreigners, a 70 square meter unit can reach yields of 10 percent, and larger units of 250 square meters can reach yields of 9 percent.
Global Property Guide also gave a comparison of rental yields in premium units in 11 different Asian countries. The Philippines topped the chart with an average of 7.06 percent, more than double that of Hong Kong (3 percent), China (2.66 percent), and Singapore (2.41 percent).
In an article by Rappler republished by Megaworld, the CBRE chairman predicted that by 2016, the total demand for housing from the luxury condominium segment would reach 7.5 million. “This is the best property market we have had in 20 years,” he said.
The Philippines topped the chart with an average of 7.06 percent, more than double that of Hong Kong, China and Singapore. These figures show a huge interest in premium real estate condominiums — though the decision is not wholly driven by rental economics alone. James C., an expatriate who recently invested in a luxury unit from Megaworld at the Fort, says that he was impressed by the amenities, the global, cosmopolitan design, and the township approach where residents could enjoy a “total lifestyle”. Though James has lived in many countries, he sees himself retiring in Manila.
“Quite frankly, a unit like this would be incredibly expensive back home. I would not be able to afford it, or maintain the cost of living in a big city without a full-time job,” he says. For him, Manila has the city vibe that he loves, cost of living is cheaper, and the Megaworld residents have, in his words, “a life fit for a king.” The real estate company has infused billions of pesos into its Fort Bonifacio project, which will have residential units within walking distance of premiere shopping centers, dining establishments, recreational facilities, and offices.
“It would be like living in New York but at a fraction of the price, and I really feel that Manila culture and climate is ideal for living out your golden years. I initially bought the unit as a financial investment, but It has become a lifestyle choice… It really is more fun in the Philippines!” quips the expat, quoting the Department of Tourism’s slogan.
The global real estate figures, local industry trends, and personal anecdotes from expats living in the Philippines do indicate that there is no better time or reason for expats to buy a premium condo unit. “It proves the point that the luxury segment is one of the segments to watch out for in the coming years,” Custodio said.
The strong Philippine economy, the robust real estate market (an article in The Inquirer describes 2014 as “the unprecedented year for real estate investments in the country”), and good interest rates. All these factors point to the fact that there is no better time for yuppies and young couples to invest in their first home. Of course, the first question they have to ask is what type of property will they buy: land, a house and lot, or a condo unit?
Land may be a good long-term investment, but unless you are willing and ready to shell out even more money to build a home, it will “sit” in your hands for decades. A house and lot is ideal, but expensive, especially in prime urban areas. A condo unit, on the other hand, offers many financial and practical advantages.
A house and lot is ideal, but expensive, especially in prime urban areas. The price of a condo unitThe monthly mortgage that you will pay on a condo is equal to the amount you will need to shell out for renting an apartment of similar size. You will need to save for a down payment, or take out a bank loan to cover some of the costs, but as this infographic from the NYTimes shows, if you plan to stay in a home for at least six years, you save equivalent of over half a million pesos.
Someone helps you with the maintenanceA house and lot requires maintenance, which means time and money that most yuppies and young couples don’t have. Can you imagine waking up an hour earlier every day to water your garden and sweep your driveway? Do you want to spend your weekends mopping, dusting, and washing windows? And with everything you have to worry about—your work deadlines, your kids, and how to squeeze in the work you brought home with the weekly visit to the grandparents—do you want to add worrying over a roof that needs repairs to your to-do list?
Condo owners can rely on their property management team to take care of maintaining the outdoor areas, public areas, and issues with water and electricity. This is one reason why condo owners need to pay condo dues—they go to a well-trained, efficient staff who take care of problems you normally would deal with on your own.
Condos come with fantastic amenitiesPremium condos, especially those run by well-known property developers such as Megaworld, offer world-class amenities including a swimming pool, a gym, a sauna, tennis courts, terraces for barbecues, and more. As proof of how much fun it is to live in a well-planned development, theMegaworld at The Fort Facebook page shows many photos of residents enjoying the gym, kids’ play room, and the shaded pool area. So in a way, buying a condo unit is like buying into a membership in a very exclusive club, where you get to enjoy a lifestyle that most people only get to experience when they book a hotel on a special weekend.
Freedom to renovateApartment renters have little control over the design of the unit. Many landlords do not allow big changes, and renters themselves feel hesitant to spend on a property they don’t own.
When you buy a condo unit, you can do many things with the space, as this Youtube video on different Megaworld Uptown Residence unitsshow. And don’t think that a small space limits your creativity. The “Wikipedia of Classy Design”, houzz.com, has over 184,779 photos of ways to decorate a condo.
Community livingLiving in a condo ensures a great deal of privacy and security, but it also presents many opportunities to make friends. You’ll meet your neighbors in shared areas like the pool or the gym—many young couples will discover that there’s a family down the hall that has kids the same age as theirs. Megaworld’s township projects also have the component of commercial, recreational and dining areas clustered around the residential units, so it’s like living in a small town where everything you need is a street down, and you’re bound to see a familiar face at the nearby restaurant.
Living in a condo ensures a great deal of privacy and security, but it also presents many opportunities to make friends. Convenient locationCondos in business areas like The Fort are a lifesaver for yuppies or young couples who work in nearby areas like Ortigas and Makati. This website on Metro Manila Directions show how accessible it is, via car or even public transportation like bus, FX, or MRT. The website also adds that The Fort is so well known that you just tell any cab driver to go to “The Fort” and he will know where to go!
Condos in business areas like The Fort are a lifesaver for yuppies or young couples who work in nearby areas like Ortigas and Makati. Peace of MindYuppies often spend most of their day at the office; many of them even enjoy using the weekends to take a quick out-of-town trip, go out with friends, or visit family. Understandably, there’s the concern of someone breaking into their home while they are away. One of the advantages of living in a condo is that there is extra security: front entrances are locked, guests and visitors are only allowed with the owner’s permission and are logged in, there are CCTV cameras, and neighbors are likely to hear and report loud, suspicious noises. These are just some of the great benefits of owning a condo. For more information, contact < a href=”http://www.megaworldatthefort.com/” Megaworld at the Fort.