How To Start Investing In Real Estate In The Philippines3 min read
Is real estate in the Philippines still as lucrative as before? Skeptics may say that it is not a good investment due to market volatility, but there is no better time to invest in properties than now.
With moderate to huge returns as well as constantly growing demand for all classes, you can never go wrong with real estate investment.
Due to a robust economic performance of the local market as well the presence of bullish developers, the price index of residential real estate rose by 9.2% in the first quarter of 2016, according to the Bangko Sentral ng Pilipinas.
With potentially high returns, who wouldn’t want to start banking on the country’s rich property market? Here we run down the basics for you.
Have a clear goal in mind
Just like anything worth pursuing, setting a goal will help you determine your proper course of action. To help you decide what you want to do in the property market, property search site Lamudi has some suggestions as to what end you might pursue:
- Owning and renting/buying and selling residential property
- Improving residential property to increase its value (or real estate flipping)
- Investing in mortgage notes
- Owning and renting/buying and selling commercial property
- Investing in commercial real estate
By finding out what you want in the market, you can start working on your advantages and become good at something specific.
Learn more about the market
The real estate market may be lucrative and can become your bread and butter in the long run, but it is also ruthless to people who do not understand it.
Before you even start scouting for properties to buy or develop your own, you need to have a deep knowledge of the market you’re about to venture. “If you are going to invest in real estate, you will certainly enter into real estate transactions, so you need to familiarize yourself with the ‘ins and outs’ of these transactions,” says Jay Castillo of ForecloserPhilippines.com.
In addition to the practical side of real estate investment, knowing the legal aspects such as “property ownership, real estate taxation, real estate laws in the Philippines, etc.”
Think of a market you want to capture
If there’s one thing people can learn from condominium developers, it’s the fact that they develop certain properties catering to different types of market groups.
Whether or not they are gunning to get a slice of the working group or students near a certain university, they always have a market share that they want to corner.
If you’re going to dive into the world of the property market, you also need to have the same mentality.
“If you are to be wise in your real estate investing, do your research and find out about the trends in the market. Do this carefully so that you will be able to target the right market,” says Joanne Almaden of Phil Property Expert.
Look at the road less traveled
Most people who want to dive in the real estate market almost always certainly start at developing units for rent or acquiring lots and wait for the proper time for resell the land.
However, newbies who want to tap into the less crowded markets such as purchasing foreclosed properties may get rewarded more.
In 2014, there was over P162 billion worth of foreclosed properties.
Noli Alleje, a renowned real estate developer, makes a living out of buying foreclosed properties, holding on to them for quite some time, and then putting it on sale when the price is ripe has made a fortune by going through a less comfortable road.
Know what the customers want
Customers are more than willing to pay more, especially if they’ve seen what they want for a certain property.
Be it a simple renovation like a new paint job or the addition of amenities like shower enclosures, granite countertop, and kitchen cupboards—knowing what makes them tick will definitely make it easier for you to dive into the game.
“Improvements to the property are the major factor in property appreciation,” ZipMatch, an online property portal in the Philippines, says. “If you add a hot tub, extra bedroom, kitchen improvements, a hardwood floor, new windows, anything that adds to the utility or aesthetic attributes of a property will cause it to appreciate in value.”