The robust economic growth accompanied by favorable overseas buying opportunities makes the Philippines a choice location for an overseas property investment. Unlike other Asia properties, acquiring Philippines property does not come with many restrictions. Philippines property investors can also expect a wide range of upscale property developments in the pipeline. This is because developers are taking advantage of low interest rates and steady cash flow from Overseas Filipino Workers. The stable currency, low costs of living, and advanced legal system are some of the reasons to invest in real estate in the Philippines.
Below, we’ve rounded up five investment tips to help guide you when buying Philippines properties:
Location is king in Philippines property
Location should be your top priority when investing in real estate. Thriving cities such as Makati, Taguig and Pasay are great locations for your Philippines property investment. Be sure that it is located near workplaces, commercial centers or just about anything that can provide a convenient lifestyle. Also consider the transportation system, traffic around the area and noise pollution. Think like you’re the one renting the place; as such, you would want the best environment to live in.
Location should always be your first property investment strategy
Know what you can afford
Spend within your means. It’s not just monthly amortization that you need to consider. Budget your monthly cash flow to assess if you can accommodate the amortization and other miscellaneous expenses. Other expenses include transaction costs, annual fees, and costs of transfer taxes. Ideally, these extra expenses should not exceed 4% of your total property cost.
If you’ve already computed your total expenses, you can now calculate your projected investment returns. Doing this before you invest allows you to have a clear grasp of your possible revenues in the future. Research for comparables because most rates you see online are marked up to 20%. Try negotiating for the best price by giving the lowest possible you can offer, until you agree on a negotiable value.
Read the fine print
All properties will be governed with restrictions that you need to be aware of. These restrictions will give you a grasp of the do’s and don’ts you have to consider in your property investment. Read the master deed and restrictions of the property so you will avoid unnecessary problems in the future.
Consider investments risks
Every investment comes with a risk so you need to have a contingency plan. If you decide on renting out your Philippines property, there’s a risk that the rentals won’t cover your monthly amortization. With that, try to buy cheaper Philippine properties and sell it for a higher but reasonable price. That way, you’ll be able to avoid using up all of your cash reserves.
Every investment comes with a risk
With these tips in mind, you’re all set to invest in the Philippines property market! Do you want more news on how you can make your investment in the Philippines more profitable? Check out Yazhou Property, a global property guide for Asia properties. Check out our blog for more updates!