My grandfather recently passed away (Filipino) and he left me land walking distance from University of Antique. I was thinking of doing student housing there. I've been trying to do my due diligence, but it's proven difficult to find quotes for the area. From what I've gathered I can build nicer student housing for about 20k (USD).
1. Is the 20k I found a reasonable estimate?
2. What can I expect in rental returns (USD) / month?
Thanks in advance!
Any insight in greatly appreciated!
I would start with a foundation that you can build up a 4 level structure. Then I would build one level at a time. You will be getting less rent than you would in the US. But for 20,000 and a good plan you can get more units. For ideas on layout check out some me condo layouts in California. This would help you with design ideas to take to your architect and builder. My family has houses we rent in the Caribbean and over time the rents grew and now every 3 years the rent pays for the houses over and over.
Thanks for your input Shaheed.
I'm considering 4 floors of 4 bed/2 bath each floor. I'm excited at the prospects
I would try to do (2) 2bed 1bath on each level. That way you can also cater to other renters who are not students. It will give you more options.
@Shaheed Crier . Where's a good source for me to learn about international income requirements (taxes, transfers...etc)? I'm in a similar position to @Derrick Dill , I'm looking into building in Pampanga, Philippines and my wife's family would manage the property. Fortunately they already have experience in REI.
Initial funding would come from the states but we'd have to have the profits sent back to the US to cover the debt service.
HI Jieh, I'm not to sure where you can go to learn about international income requirements. I like the idea of using funds from the US to get started. Using the BURRR would be a good was to bring back money to pay off your US debt (You would not be selling a property but getting a loan, you would have to talk to a tax specialist an see if you would have to pay taxes on a loan from the Philippines) I think the banks in Philippines would give you a loan secured by the property you just have to find the right bank to do it for you. Then you can pay off your debt and have the funds freed up to use for another time or as emergency money.
@Derrick Dill are you a citizen? The Philippines has strict foreign ownership laws. If not you may be required to incorporate or sell.
Also, I personally would not recommend building there unless you are on site or have partners you really, really trust. If not, take your estimate and double or triple it (I'm not joking)
You may also want to consult with a CPA in the US who is familiar with international income and may also need a local tax expert in the Philippines.
When you said you wanted income coming back for covering the debt, you don't expect a US based bank to fund this project in the Philippines do you? I don't believe they will do this.
I'm not a citizen over there, so I'll have to look at my options. I have family over there and I trust them as much as you can ( I know Filipinos, haha).
I wouldn't plan on taking out any debt for the project, 40k is still within the realm of possibility for me.
Thank you guys for your input, will really help me.
@Derrick Dill I have done some research into the Philippines. First thing that stands out. Foreigners can't own land. That's why most foreigners that buy over there, buy a condo. Because they can own the structure, but not the land underneath of it. If your family member was a citizen and willed it to you. Maybe there is something different I am unaware of.
As far as building a 4plex. Rental rates I am unsure of. However, since you would most likely not have tenants that are foreigners and renting to college students. If these were studio units, or one bedroom. I would expect rental rates of 100-190 dollars a month. Though I am not 100 percent familiar with the area the school is located in. But most Filipinos can't afford much more than that. Only places you see high rents, are places that foreigners reside. Makati, IT park in cebu city, etc.
I would seriously think of taking a step back and really think, if you want to be an owner of rental properties in a 3rd world country. I am not certain on eviction laws. However, I know the court system as a whole is jacked up through most of the country. At least on the criminal side. I doubt the civil side is any different.
It may be best, to just dispose of the land and take whatever cash you can get from it.