Condominium In Philippines
Member since 2020 · 3 posts · 1 vote
I am considering buying a condominium in Makati Philippines. Makati is currently booming (before Corona). I live in Europe, but I have people who can do Airbnb for me. Does anyone have experience? Thanks in advance,
Curious to see if you have all made any movement on investments there. I have been working pretty extensively in the Philippines for the past 4 years and considered looking at higher end condos as well. This was well before I found bigger pockets. Anyway, lots of development and movement north and south of Manila with the plan to build Asia’s largest airport and the need for more affordable housing and less congestion in Metro Manila. The MRT I believe is expanding as well with very aggressive plans to Expand that as well. What have you guys heard?
have rentals there as well. Makati is a business district with a decent market. not sure how the current situation affects that, probably the same as it would affect other major cities.
Current situation affects everywhere Lope. But is it normally a good investment?
normally, it is. considering you run all the numbers before jumping in. you might want to take a good look at the comps in the area for rental rates as well.
The Philippines is in a massive bubble. Be ware
Curious to see if you have all made any movement on investments there. I have been working pretty extensively in the Philippines for the past 4 years and considered looking at higher end condos as well. This was well before I found bigger pockets. Anyway, lots of development and movement north and south of Manila with the plan to build Asia’s largest airport and the need for more affordable housing and less congestion in Metro Manila. The MRT I believe is expanding as well with very aggressive plans to Expand that as well. What have you guys heard?
seems the lower priced condo units are more affected due to the unstable economy as most of these are bought on bank loans. the higher end property market seems more liquid, mostly cash transactions. more of a struggle for us landlords to find tenants these days in the CBD since most employees in our market have the option to work remotely.
Curious to see if you have all made any movement on investments there. I have been working pretty extensively in the Philippines for the past 4 years and considered looking at higher end condos as well. This was well before I found bigger pockets. Anyway, lots of development and movement north and south of Manila with the plan to build Asia’s largest airport and the need for more affordable housing and less congestion in Metro Manila. The MRT I believe is expanding as well with very aggressive plans to Expand that as well. What have you guys heard?
Hello, going for an upscale and luxury condos in prime locations and choosing the right brand is the best move to invest in real estate in the Philippines. They are less likely to be affected on any crisis.
I invested in two small condos at One Shangri-la Place several years ago but sold them after two years for good profit but wish I hadn't ! At that time rental yield in Manila was solid around 7-8% easily because costs were so low. Good appreciation as well. Investing in the Philippines can be very tricky but I think these are the critical items to get right.
1) Buy only from good and reputable developers. 2) Make sure the property management team is solid and reputable. The bad ones are REALLY bad. 3) Unless you have people who know the construction industry intimately, forget about doing extensively renovations.
Some very real risks to consider :
1) Currency risk. Fluctuation in the currency exchange rate can be severe. 2) Political risk but what country in SE Asia doesn't have this ! 3) They have been on a bull run for a long long time. Prices have appreciated dramatically over the last ten years.
Best of luck !
Christopher Liu, I was in Manilla for 3 months in 2018. I was totally amazed at the level of new construction that was going on. I am curious to know if that level of construction is continuing and who is buying all those condos. Secondly, about 30% of the Philippine economy is from people working outside of the Philippines primarily in Middle East hotels and cruise ships. Surely, with the current lock downs in effect, the effect on the Philippine economy has to be significant.
@Dennis Cosgrave. The construction is definitely happening. I shared a hotel with quite a few engineers working on the expansion of the MRT and the new airport. I was also eyeballing a few condos there in Alabang and another development near NAIA. I think the majority of the people buying those luxury apartments are international investors and the such. Way too expensive for the average Filipino to purchase unless they’re like the top 2%. The Philippines has been receiving a lot of money for infrastructure development by the Chinese, the US, Koreans and Japanese. They’re banking on it now. As for remittances from Overseas Filipino Workers, it’s about 10% of their overall GDP. Due to CoVID, many of them are returning home. I was there in March before I was forced to evacuate myself and get back to the US.
@Marc Estepa What development near NAIA? Is that ARCA South?
Yup! I was eyeballing it about a year ago and inquiring. Very nice property. But with CoVID and everything else going on, not sure how the market is playing now. I’m also new to bigger pockets and looking at analysis for rentals. Do you have any analysis on the cost for rentals in the area?
you might want to look at the bigger brokers' market reports like Colliers or JLL. you could also compare rent prices through local sites like Lamudi, Property24, Dot Property, and the like. unfortunately, they're still coming up with an MLS of sorts so it's not as easy as more mature markets.
@Lope Encarnacion, thanks bro! Investing for me out of the country would be a huge step. I’ve always thought about it during my travels, but not comfortable enough to know the market and see whether or not it’s a safe investment. But thanks to this data, it will help investors better look at their numbers and see how much risk they’re willing to take.
Ik geloof nog steeds investeren in de Filippijnen is een goede investering. Als ik volg de prijzen, ik noem de prijzen zijn nog steeds naar beneden gaan. Ik wacht op het goede moment. Ik koop een midsegment appartement, wil je makkelijker en sneller een huurder te vinden.
@Marc Estepa ARCA South is still at its early stage but there are numbers of tenants now in ARCA South and rental yield is at 2.5% for a luxury 1 bedroom unit in Arbor Lanes, a five low-rise luxury residential tower of Ayala Land Premier in which two of the towers are move in ready.
@Jeff Martin. Salamat! I gotta look harder at the numbers. With the cost for each unit, what are rents going for for comparable units in the area? If I remember correctly, I remember the cost for the condos were nearly matching the price of homes here in Hawaii! If I were to turn it into a rental property, I’d have to do the analysis of what kind of price units would go for rent. Also, how difficult would it be to find renters for these luxury units? What’s the target demographic that can afford them? International expats, wealthy locals, etc? Where are you pulling your data? Thanks in advance! Those are nice units for sure!
How do you go to the Philippines for a business deal and leave with a $million dollars in your pocket?
You bring 2 $million with you when you go there.
My wife is from Cebu and I am from California. We purchased several homes already built, 3 homes we had custom-built and 3 condos and a bungalo in a huge resort that were already under construction.
The homes that were already built never gave us a lot of problems with the exception that it is very difficult to find an honest property management company and all our money was stolen a few times. One major problem we have is transferring money from accounts to California because the bankers are anal about verifying everything to the point every request for a money transfer is annoying.
The contractor who build the 3 homes did the worse construction cheated us horribly. He failed to obtain any permits, failed to install plumbing, did not get electrical wiring from power likes to the homes, the roofs leaked and there was about 50 other problems. It took us a few years and had to pay off government agents to get electricity on the property.
We lost our entire $50,000 down payment we paid for the 3-condos and the bungalo project. This was a fairly large construction site that was going to be a resort since our condos were on something like the 17th floor. We received a letter stating the owner of the project decided he was going to change the condos and bungalos to hotel rooms. Prior to investing in the project we figured we was going to make a few million in profit based on the future value of the condos. We sued the owner of the project, Filinvest, a very well-established company and the judge promised us a little better chance of prevailing if we gave him a pig for his birthday. Needless to say, Filinvest, the company we sued never made a court appearance and the case dissipated. Maybe, Filinvest gave the judge 2 cows.
I love the people in the Philippines, but when you want something that is type country where you literally have to pay someone off to get things done. Every time we purchased a property we could not get the transfers processed until we paid someone in the government agency. When we want water or electricity turned on we have to pay someone inside the utility companies.
How do you go to the Philippines for a business deal and leave with a $million dollars in your pocket?
You bring 2 $million with you when you go there.
My wife is from Cebu and I am from California. We purchased several homes already built, 3 homes we had custom-built and 3 condos and a bungalo in a huge resort that were already under construction.
The homes that were already built never gave us a lot of problems with the exception that it is very difficult to find an honest property management company and all our money was stolen a few times. One major problem we have is transferring money from accounts to California because the bankers are anal about verifying everything to the point every request for a money transfer is annoying.
The contractor who build the 3 homes did the worse construction cheated us horribly. He failed to obtain any permits, failed to install plumbing, did not get electrical wiring from power likes to the homes, the roofs leaked and there was about 50 other problems. It took us a few years and had to pay off government agents to get electricity on the property.
We lost our entire $50,000 down payment we paid for the 3-condos and the bungalo project. This was a fairly large construction site that was going to be a resort since our condos were on something like the 17th floor. We received a letter stating the owner of the project decided he was going to change the condos and bungalos to hotel rooms. Prior to investing in the project we figured we was going to make a few million in profit based on the future value of the condos. We sued the owner of the project, Filinvest, a very well-established company and the judge promised us a little better chance of prevailing if we gave him a pig for his birthday. Needless to say, Filinvest, the company we sued never made a court appearance and the case dissipated. Maybe, Filinvest gave the judge 2 cows.
I love the people in the Philippines, but when you want something that is type country where you literally have to pay someone off to get things done. Every time we purchased a property we could not get the transfers processed until we paid someone in the government agency. When we want water or electricity turned on we have to pay someone inside the utility companies.
Gggg
@Account Closed. All I have to say is, “wow”. Thank you for sharing your experiences. Did you pull out your investments there, or did you tough it out and stick through it? If you stuck through it, are you profitable? Would you say the payoff was worth all the hassles to get it up and running?
I’ve been working there for the past 4 years, doing military stuff and even though our militaries have a very strong relationship, there were struggles with the different mindsets. I’m also ethnically Filipino and have witnessed first hand the way business is done in my own personal life. Needless to say, I get it from both sides. I’ve been wrestling with this myself because I see the potential it has with the growth and development taking place right now with the infrastructure alone.
I have an uncle who wanted to build his retirement home there too. He is Filipino too, born and raised on the islands but did a 20+ year career in the US military also. Like me and many others, he saw the price and potential for investment there and tried building a luxury place where he grew up. Even with the connections he had, there were a lot of things that were done wrong there and he is at the point now of scrapping it altogether. I’m still on the fence depending on how the numbers play out.
Thoughts?
I am describing only my experienced I had in Cebu and I don't have the business savvy, education and experience like the pros. We had about 18 homes in Cebu and have been selling them slowly. I think we have about 11 left. Every business deal we do, whether buying or selling, always comes with a lot of problems we don't get in the United States. The rents are low and there are always problems with tenants bailing without paying rent. We've had crazy problems with neighbors like we had a neighbor park his boat in our driveway for about a year and we could not get the police or anyone to force them to move it. It is much easier to buy than to find a buyer with enough money.
Maybe, I am the problem, or maybe doing business is better in larger cities like Manila.
@Marc Estepa Upscale and luxury condominiums located in prime central business district would cost around $350,000 to $400,000 for a 1 bedroom unit. And if you were to turn it into a rental property, in terms of price per sqm, here are examples of the luxury condominiums by Ayala Land Premier, prices based on our listings.
Makati City
Bonifacio Global City
Majority of the renters are wealthy locals and some are expats. I am a real estate agent of Ayala Land. I would recommend going for a reputable developer like Ayala Land, Megaworld, and Shangri-la these are the best developers in Philippines and also having a good property management to help you with your future investment.
@Account Closed, I appreciate the straightforwardness and honesty. The numbers may sound right and the potential is there, but there’s a lot to be said about peace of mind. You almost have to go in to it knowing it will be challenging from that perspective, but if the eye is on the prize to be profitable, it may be well worth it!
I highly doubt you’re the problem. Business is business and when it comes to working overseas with ANY culture other than your own, you have to do the best you can and study their culture to find the middle ground and get business done. No different in the Mideast or the numerous other countries I’ve worked in.
Makes me wonder what people think when they are from other countries doing business with us! Americans are pretty straightforward for the most part. So, the question is - would you do it again? Is the profit worth it for an outsider coming to invest there?
Love this thread, y’all. Just an observer considering opportunities in SEA. Keep it coming!
@Benjamin A Ersing, I am totally on the fence on the Philippines as an investment. There are large infrastructure developments happening. I’ve wanted to invest for awhile. I’m just afraid with all the horror stories from people I know personally and others who are very well connected there but still face major headaches.
I was on the verge of selling my other properties in North Carolina out of the issues I was having managing from out of state. And that’s in America! What more investing overseas?
I dunno, it really depends on the payoff and the numbers. With CoVID in the mix and the political struggles between President Duterte and his hate for the US, it makes it more risky to me. I just need more data to be comfortable.
I spoke to a realtor in the Philippines who talked about a lot of the real estate trends there (pre-CoVID). He mentioned the influx of Chinese coming to the Philippines. He mentioned quite a few property owners who rented to the Chinese because they always paid rent for a year upfront. Unfortunately, after a year the place was completely trashed, and then the headaches of trying to repair all that made it even harder to manage from overseas.