In the world of real estate investing Philippines is considered a hot spot for opportunities. It’s been known to be one of the best investment strategies, whether you’re a first-time property buyer or a seasoned investor. Allotting your resources into the housing market may reap numerous benefits, such as a steady cash flow, passive income, and the ability to diversify your investment portfolio.
Real estate also increases in value over time. Compared to cars or even the latest electronic devices, it does not decrease in value the very moment you purchase them. This is because land is limited, and improvements done on the property increases its value. Investors can easily earn money simply by selling the property itself, since they have complete ownership and control over the asset.
The housing market can be lucrative, but as with any venture, there are important things you need to consider before investing, such as as understanding the flow of the real estate process, the requirements, and unique set of challenges. Read this comprehensive guide on property investment tips to help you make the most of the opportunities on the horizon.
First, let’s define some of the key concepts in real estate to help you understand which investment option best fits you:
- Land – This refers to any vacant land or underdeveloped property.
- Residential – This refers to a property primarily intended for residential purposes such as single-family homes, townhouses, condominiums, duplexes, and multi-family residences. This is considered as a good investment choice for first-time investors.
- Commercial – This refers to property used for business activities like malls, restaurants, retail stores, groceries, supermarkets, and gas stations.
- Industrial – This refers to property designed for production, storage, distribution, and manufacturing.
Mastering Real Estate Investing Philippines
Now that you have an idea on the different types of real estate investments you can make, let’s explore the things you can do to ensure the success of your investment:
Market Research
A real estate investor should be knowledgeable about the ins and outs of the industry, and should dedicate a significant amount of time examining real estate market analysis. Familiarity with real estate laws and regulations is a must for any aspiring investor. Fortunately, there are a lot of workshops and seminars led by industry experts that aim to educate the next generation of real estate professionals.
Define Your Goals and Budget
First identify your investment goals and set a clear budget. Decide whether you want to invest in rental income, capital appreciation, or maybe both. Keep in mind that your budget may depend on your current financial capacity and risk tolerance. Other factors such as down payment, mortgage per month, property taxes, and maintenance expenses may play a role in your budget allocation.
Choose the Right Location
When buying a property, choosing the right location is among the most important investment strategies you have to consider. Since the Philippines is an archipelago, you have a wide variety of location options that are situated in highly urbanized centers and emerging rural regions. You may want to look into the current market trends from the different regions as you consider growth potential, advancements in infrastructure, and accessibility of the area. Always remember that the value of any property is influenced by how close it is to business centers, schools, hospitals, and other places of interest.
Real estate investing Philippines offers a variety of opportunities, but there are both advantages and disadvantages. Here are the more common types of investments in the Philippines:
- Residential – These are the properties that provide a steady rental income and the potential for a long-term ROI on real estate investment. Some examples are single-family homes, condominiums, and townhouses, all of which tend to attract new investors.
- Commercial – These investments require a bigger investment capital and can come with more risks than residential properties. Higher rental returns are to be expected from properties that include office spaces, retail shops, and warehouses.
- Vacation Rentals – Tourism in the Philippines has been thriving post-COVID. With the large numbers of tourists entering the country, investing in vacation rentals can be very profitable.
- Real Estate Investment Trusts (REITs) – A passive investment option for investors where they can buy shares in a real estate portfolio that require less capital. REITs is a great alternative for people looking to make ROI on real estate without handling real estate themselves.
Legal Considerations
Investors are encouraged to understand the legalities involved in real estate transactions to ensure a safe and seamless investment process. It is important to ask for legal counsel to be guided accordingly when navigating important factors in real estate investing Philippines.
- Restrictions on Ownership – The country has put in place certain limitations on foreign investors who wish to buy land. Thus, it is important to fully understand the limitations to avoid encountering legal issues.
- Legitimacy of Deeds and Titles – Before closing a deal, it is is crucial that investors first verify that the deeds and titles are legitimate. It is best to ensure that the titles is clear and that there are no obstructions on the property.
- Fees and Taxes – Real estate investing Philippines involve different taxes and fees like registration fees, documentary stamp taxes, and transfer taxes. Efficient budgeting is only possible if the investor has a good understanding of these expenses beforehand.
Funding Options
Real estate investors have access to different financing options after choosing a property. Here are some examples:
- Bank Loans – Local banks usually offer very competitive interest rates for their housing loans. Investors can identify the best financing option available by checking the eligibility requirements and examining the loan conditions.
- Developer Financing – Some of the top real estate developers have financial solutions of their own, but these funding arrangements may entail higher interest rates than what local banks have.
- Pag-IBIG Fund – Home Development Mutual Fund (Pag-IBIG Fund) members can file for a loan intended for affordable housing. Due to its affordable terms and competitive interest rates, it is a very appealing financing option especially for first-time investors.
Before Closing a Deal
A thorough property inspection is a must before finalizing a real estate transaction. It is highly recommended for investors to seek professional advice in assessing the property’s general state, structural integrity, plumbing, and electrical. Due diligence is also a must. Investors must do their own research to look into the property’s history and ensure that it has no financial or legal issues.
Negotiate Properly
After conducting your own research, you may want to consider negotiating over the conditions of your investment. It is ideal to work with a registered real estate broker should you need assistance with the negotiating process. The right broker may be able to help you make the best deal in terms of pricing and terms of payment.
Be Ready to Adapt
It is important to do a real estate market analysis so you can keep an eye on your investment portfolio. Always be ready to change your plan to keep up with all the changes in market conditions. Remember that the value of any property may be affected by market trends, economic factors, and government legislation.
Make Sound Decisions
One of the best investment strategies you can do is to always have an exit strategy in real estate. Investing in real estate should always be done with a long-term view –– and the best way to maximize your potential to earn is by constantly learning and adapting. Aside from understanding real estate laws and regulations, careful planning and setting well-defined goals will increase the potential of your investment.
Discover Investment Opportunities with PHINMA Properties
PHINMA Properties takes pride in having more than 30 years of excellence in making lives better. As a Filipino-owned real estate company, PHINMA Properties is committed to help Filipino individuals and families take a step towards a better quality of life.
The company takes inspiration from the values that are deeply rooted in Filipino culture –– uniqueness, hospitality, and comfort –– all of which are weaved into every PHINMA home.
For prospective investors, here is a simple Buyer’s Guide that can help you make your investment happen:
- Choose a Location – Contact a Property Specialist and arrange a visit to your preferred property.
- Check Availability and Price – Know the price of the property and ask for the available promo options.
- Select Your Unit – View the inventory board of the property for available units.
- Reserve Your Chosen Unit – After submitting the initial requirements, you may already pay for the reservation fee. You may also visit phinmaproperties.com and select the Online Payment and Reservation tab for contactless transactions. This user-friendly online payment and reservation platform offers you a seamless and convenient way to invest and is available anytime, anywhere.
- Choose the Payment Option – You may pay in cash, bank loan, in-house financing, or through HDMF.
If you wish to get personalized property investment tips or to explore the available properties, visit phinmaproperties.com and leave us a message.
