International Airbnb Market(Cebu Philippines)

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International Airbnb Market(Cebu Philippines)

Zachary Himes
Member since 2020 · 9 posts · 5 votes

I own a house free and clear in Cebu City Philippines. I have many many questions regarding the market in Cebu. The house is about 15 minutes outside of the city, in a smaller suburb named Talisay. 

It is a four-bed 3 bath house, that is currently unfurnished. I have the funds to fully furnish and get this up and running but I have some concerns about this particular market. I've tried looking on AirDNA at Talisay and it is not on there. Cebu city which like I said the house is about 15 minutes outside of the city seems to be an okay market I think I saw it was rated a B on AirDNA or something. 

My Questions:

1. Does anyone have experience with Airbnb in Cebu? How is it?

2. Is it work the risk of furnishing, I've budgeted about 15k or so to fully furnish the entire house, how would I way this investment as there isn't a lot of info on the area?

3. The profit margin is great as I have no overhead except the furnishing costs, once it's up and going as it's paid off. 

4. I would invest the 15k elsewhere if this isn't the case, so it wouldn't be sitting doing anything.

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John Farkas
Investor · San Jose, CA · Member since 2014 · 28 posts · 17 votes
4y

Hi Zachary,

Sorry, but I have no answer for you in regards to the Philippine market. I am interested to hear if anyone else does. If you already have a house there and it is sitting empty doing nothing then why not furnish it and put it up as a LTR or STR? I do have some experience in international LTR/STR. I have 2 condos in Playa Del Carmen that I rent LTR/STR. I am flexible when it comes to LTR/STR and both condos have been rented under both conditions. One thing that I have learned is that you cannot predict the market and future and sometimes you just need to go for it and learn as you go in the international market. I think the biggest concern is location. Is it near the tourist area or the beach? If it is in the residential neighborhood then maybe only locals would want to rent and the rents might be lower.

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  • John Farkas
    Investor · San Jose, CA · Member since 2014 · 28 posts · 17 votes
    4y

    Hi Zachary,

    Sorry, but I have no answer for you in regards to the Philippine market. I am interested to hear if anyone else does. If you already have a house there and it is sitting empty doing nothing then why not furnish it and put it up as a LTR or STR? I do have some experience in international LTR/STR. I have 2 condos in Playa Del Carmen that I rent LTR/STR. I am flexible when it comes to LTR/STR and both condos have been rented under both conditions. One thing that I have learned is that you cannot predict the market and future and sometimes you just need to go for it and learn as you go in the international market. I think the biggest concern is location. Is it near the tourist area or the beach? If it is in the residential neighborhood then maybe only locals would want to rent and the rents might be lower.

    1Reply
  • Zachary Himes
    OP
    Member since 2020 · 9 posts · 5 votes
    4y

    Hi John! 

    It's about 15 minutes drive from the biggest urban center, I would say where the majority of the action is at. It is right on the shore (not beach front) about 3-minute walk to the beach. It is in a residential gated community with a pool overlooking the beach and things. It has great amenities and things for what it is, but like you said and I agree with my biggest concern is the location. 

    I'm leaning toward just risking it and furnishing it as the worst that will happen is I'll have a nicely furnished vacation house. I just am 22 fresh out of college and this is one of my first business ventures and am a little timid. I'll put some thought into it, I appreciate your input. 

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  • John Farkas
    Investor · San Jose, CA · Member since 2014 · 28 posts · 17 votes
    4y

    Hi Zachary,

    I would go for it. You are young and have a lot of time to recover if it does not work out well. For me personally, buying my first condo in Mexico I had a hard time pulling the trigger. I wanted to know my exact ROI. Now I have learned that you will only know your ROI after the fact and that some months are better than others. There were months that I made $2000 and there were months where I lost $500. This is where i am flexible between LTR and STR. you make more money with STR as long as it is occupied, but when I lease out my place for 1 year I am always making money every month. How did you come by this paid off house? Where are you located? If you are not nearby the house then you will probably need a Property Manager. My condos are run by my PM. I do not do anything except check the monthly income and expenses spread sheet. I only manage my manager. She advertises on many platforms including AirBNB, VRBO, etc. She has a business and network so she also gets bookings that way. The PM is the most important piece of the puzzle once you already have a place. A good PM will make your life easier and a bad PM will make you want to sell your place. True story I almost wanted to sell my place and my agent told me to change PM and now its all good.

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  • Jon Martin
    Member since 2022 · 1k+ posts · 1k+ votes
    4y

    Look at how your neighbors are doing (if applicable). See what they charge and how booked out they are. With typhoon season coming up it might not be the greatest time to compare calendars, but I’d imagine that the area is quite popular in the winter months, especially with your good amenities. Do it! 

    1Reply
  • Andrew Olmstead
    Kapolei, HI · Member since 2014 · 42 posts · 18 votes
    4y

    Zachary, I don't own an Airbnb in Cebu but my family and I spend a lot of time there and always use Airbnb to rent units in Cebu IT Park and Ayala Center.  I know from renting Airbnb over the years that nice houses and 3 + bed condos to rent on Airbnb are few and far between in Cebu so I think it might be an ok niche.   The main costs to turn the unit, such as cleaning, will be super low which should help your profit margin.  There are no property taxes either.  I would suggest that you do a great job on furnishing and do not skimp on the internet service as believe it or not a lot of airbnb Hosts there don't offer units with internet.  Those, I cross off the list immediately.      Just curious why you bought in Talisay instead of a closer in sub-division.

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  • Zachary Himes
    OP
    Member since 2020 · 9 posts · 5 votes
    4y
    Quote from @Andrew Olmstead:

    Zachary, I don't own an Airbnb in Cebu but my family and I spend a lot of time there and always use Airbnb to rent units in Cebu IT Park and Ayala Center.  I know from renting Airbnb over the years that nice houses and 3 + bed condos to rent on Airbnb are few and far between in Cebu so I think it might be an ok niche.   The main costs to turn the unit, such as cleaning, will be super low which should help your profit margin.  There are no property taxes either.  I would suggest that you do a great job on furnishing and do not skimp on the internet service as believe it or not a lot of airbnb Hosts there don't offer units with internet.  Those, I cross off the list immediately.      Just curious why you bought in Talisay instead of a closer in sub-division.

    Thanks for your response and view on the area from experience that is super helpful! This house was gifted to my Wife and is sort of a family house, that has gone unused for 5+ years. We didn't have a choice of location obviously, but since we now own a nice house near a big city we are playing with the idea of redoing it and getting it on Airbnb.

    - Do you have any suggestions as to how to price a place at 4 beds 3 bath but 15 minutes from the city? 
    - Do you normally rent a car? or what is your family's mode of transportation?
    - Would a nicely furnished house in a nice suburb, make up for it not being super close to downtown? 
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  • Andrew Olmstead
    Kapolei, HI · Member since 2014 · 42 posts · 18 votes
    4y

    Zachary, I don't own an Airbnb in Cebu but my family and I spend a lot of time there and always use Airbnb to rent units in Cebu IT Park and Ayala Center.  I know from renting Airbnb over the years that nice houses and 3 + bed condos to rent on Airbnb are few and far between in Cebu so I think it might be an ok niche.   The main costs to turn the unit, such as cleaning, will be super low which should help your profit margin.  There are no property taxes either.  I would suggest that you do a great job on furnishing and do not skimp on the internet service as believe it or not a lot of airbnb Hosts there don't offer units with internet.  Those, I cross off the list immediately.      Just curious why you bought in Talisay instead of a closer in sub-division.

    0Reply
  • Andrew Olmstead
    Kapolei, HI · Member since 2014 · 42 posts · 18 votes
    4y

    Zachary. 

    1) I would have to see the house and subdivision (feel free to send pic if you want).   I would guess the long term rent value would be 55,000 pesos per mo.  

    2) If you end up on Airbnb I think I would test it . Maybe start at $75 per night and give an xxx% discount for monthly rent through Airbnb.   The great thing about Airbnb is you can test.  I think I would also have one bedroom with a bunk bed or two single beds to attract the family market (I’m thinking maybe Filipinos visiting family).  If it has amenities , like pool, for sure advertise that .  

    3) When my family is there they stay for one or two months.   They always just use Grab (Uber) to get around as it is dirt cheap.  I’m addition, I require my kids to use it for security purposes as I don’t want them robbed in a marked taxi. 

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