As one of the most resilient Asian Tiger economies currently making waves in that part of the world, the Philippines is fast emerging as one of the hottest, most attractive investment destinations in the region and beyond.
One of the interesting facts about the country’s growth story is that it is firmly anchored in local consumption and a strong manufacturing sector, making it a more sustainable paradigm, unlike many of the export-based economies in the neighborhood.
Economists predict that the average Filipino could be earning $6000 by 2024, and by 2029 the size of the economy could reach $1 trillion.
One of the markers of a healthy economy is a growth-driven, booming real estate sector. What makes the country so inviting are the relatively low living costs, stunning landscapes, laid-back ambiance, tropical climate, affordable real estate, attractive long-term visa options and skilled, English-speaking, young demographic.
Sprawled over 7000 islands, across the Pacific Ocean and the South China Sea, it’s a popular expat destination. Buying real estate in the Philippines is being seen today as a smart investment move. However, it’s important to partner with a well-established, reputed, experienced partner like FazWaz who can give you the right advice and assistance.
Consider These 5 Tips For a Safe Investment
1. Remember that foreigners cannot own land in the Philippines: However, the laws permit foreigners to legally purchase condos/villas/houses, etc. The Investors’ Lease Act of the Philippines allows people to also enter into long-term leases up to 50 years with a one-time renewal-option at 25 years.
Foreigners can own a condo-unit that’s 60% owned by Filipinos. You can also buy property in your spouse’s name if you marry a Filipino citizen, though your name won’t be on the title. In case you divorce, you have no claim on it, but you get time to sell the property and recover the costs.
2. Choose The Right Kind of Property: Ensure that you select a neighborhood/location that you’d like to live in long-term. If you prefer a lively, busy life, choose an urban location. For a laid-back, relaxed ambiance, select one of the country’s stunning beach locations.
If you’re moving there to work, Manila, Quezon City, and Makati are among the world’s greatest business capitals. You may be looking for commercial or industrial properties if you plan to set up a business or rent it out. If you’re in the retail business, you need commercial spaces that are strategically located. Whatever you purchase, look at long-term appreciation prospects.
3. Get Professional Help: While it’s tempting to browse online and get loads of information, you need the experience, knowledge, and expertise that a professionally-trained, qualified, real estate agent can offer. Additionally, get legal advice from a well-reputed local lawyer specializing in property matters.
This can help you avoid the pitfalls, scams and dodgy deals that could target the unwary buyer. You will also need help with the paperwork, documentation, taxes, etc. Legal and/or real estate professionals can verify that the person who’s leasing/selling the property is indeed the real owner. If you want to renovate/modify the condo/house, ensure that this is allowed.
4. Have a clear investment plan: Even if you’re purchasing property for your personal needs, the property is still one of the safest, most lucrative investments. However, you need to work out a logical timeline for the best ROI (return on investment) so that you know how much revenue generating potential it has and also when the ROI starts to get triggered.
Consult a financial expert to work out a suitable investment plan that matches your financial goals. Research how market-values have fluctuated or been stable in the region before you make the investment by participating in local open-houses and site-viewings.
5. Be careful about buying foreclosed properties: Foreclosures may seem like a great investment opportunity to buy low and sell high. However, “flipping” as it’s called in the business could have a downside if you’re not alert. Auctions are not the best place to buy property because it’s sight unseen and caveat emptor.
The place may require expensive repairs, have liens, outstanding unpaid taxes, etc. Sometimes, the owners have yet to move out. Bank foreclosures are safer investments, but you need to examine all the paperwork thoroughly and get it vetted by an expert. Foreclosures are certainly not for the newbie investor.
Investing in real estate is a much safer option than playing the stock market and it offers better returns than parking your money in a bank. You can hold on to the property when the rates are low and still earn rental income or use it to get a loan.
Property investments in the Philippines are trending right now and the climate seems right to take the plunge. Avoid potential pitfalls by doing your own research and following a methodical process. Ensure that you consult professionally trained, qualified and experienced real estate experts like FazWaz before you sign on the dotted line.