Going Into The Property Market Business For Extra Income?

[bootleultras]

Jpbago

" All of these will continue to do well unless the world stops driving cars, stops smoking and drinking. If you want to keep busy, dabble in options"

I actually own a bar at the same time & believe me it can be harder than you would think,although right now I'm doing well out of this, there are certain periods that it does seem that the country does stop smoking and drinking which can be extremely frustrating....an example would be one of the million public holidays that filipinos have!!

Thanks all for the advice so far & if theres any more input please continue to add, there have been some valid points raised so far and all are appreciated.

jpbago, you also mentioned about a tax increase for foreigners only in condos, do you have a link for this, it would be an interesting read, what if I jointly owned properties with my filipina wife, would this still apply?

Also one more question for all, would I be right in assuming that foreigners can only have a certain % of apartments in any Philippine condo development?

Thanks again!

[stevewool]

have you thought about buying back in england, there are lots of good cheap property around and lots of people want to rent these days it seems

[Jollygoodfellow]

If the condo building was only owned by kanos, then it would hold it's value. PI standards are different

 

My understanding is only 40 % of a condo building can be foreign owned, this is something to check before purchase. You can own the condo its self but 60/40 rule over the whole building.

[bootleultras]

JJReyes:

"Going back to Philippine real estate. I would buy or construct a house for lifestyle reasons. It would be something for me to occupy and enjoy."

JJ, I already have my house here for 9 years. I enjoy it alot especially the peace and quiet.

[bootleultras]

Steve,

I did think about it for some time, but decided against it for differing reasons, the main one being I like to be close by to any of my investments, I just wouldnt be comfortable leaving a property there without seeing what was happening with it, I wouldnt want my elderly parents having to go around on my behalf if there was issues.

[Curley]

My wife, son and I are in the real estate business owning a real estate firm in Hawaii. We had looked into the Philippine property market for investment opportunities either for ourselves or our clients.

 

There is no multiple listing service in the Philippines. Without a reliable database, it is difficult to make an informed decision when it comes to investment properties. Everything is rumor and hearsay. The tax code means you pay capital gains irregardless whether or not you made money from the transaction.

 

Metro Manila and Metro Cebu real estate is in a bubble. Prices will more likely continue to rise because "hot money" from Asian speculators and overseas Filipino workers continue to fuel the market. At some point, the bubble will burst. Think what happened to the global markets after the American real estate collapse in 2007/2008. Unless you can stomach a 40% to 60% loss, be careful.

 

How can you tell the market is in a bubble? A simple gauge is to look at the property developer prices and how much the units are reselling. For greater accuracy you need reliable data from a multiple listing service, which is non-existent in the Philippines.

 

The International Monetary Fund is starting to question the Bangko Sentral Ng Pilipinas, who in turn, is questioning the commercial banks. The Philippines is an oligarchy with powerful families controling the banks. The small depositors receive very little interest and the cumulative deposits are loaned by the bank owners to their friends or they use the money for their pet projects like building offices and high rise residences. Each new project always seems to be bigger and more prestigious. What happens is the mid-level companies and small businesses have no access to capital. They are forced to borrow outside the banking system at exorbitant interest rates. This is contrary to a sound monetary policy.

 

My greater concern is Mainland China because they can drag down the rest of Asia. Unless you have strong government connections in China, you can't borrow money. If you manufacture widgets and in need of trade financing, the only choice is to borrow at 30% to 70% interest rates. Someone earlier posted a video about a huge shopping complex in China without customers and without shops. That's just one of many examples. The money is borrowed through government connections. Everyone involved already made money except the government who forecloses on the property.

 

As they say in Latin, "Caveat Emptor." Let the buyer beware.

 

I wholeheartadly agree, for all my life I have believed in property being a solid investment but now I do not. I want to have the freedom to move whereever and whenever I want. I have a quite expensive property in the Canary Islands in a fabulous location that I want to sell, the problem is that the Spanish banks are not lending and that means finding a buyer with a lot of cash which really restricts my potential buyers. With the money from my sale I will invest in a well balanced portfolio of safe stocks happy in the knowledge that if I need a chunk of money I will have a choice of stocks to sell and more importantly I will be able to sell in a matter of days.

 

Ultra, you sensibly say that you wouldn't want to invest in property far away from where you live, what happens if life where you live now turns sour and you want to maove away?

[JJReyes]

JJ, I already have my house here for 9 years. I enjoy it alot especially the peace and quiet.

 

The original inquiry was on income property. If you are buying for your use, think lifestyle. It's for your enjoyment. If you are renting to others, consider the return-on-investment and pulling hair if something goes wrong. We have a property management division at our company. They handle the call if a tenant has plumbing issues at 2:00am in the morning.

 

 

I wholeheartadly agree, for all my life I have believed in property being a solid investment but now I do not.

 

My wife stopped taking me to meetings and conferences for Realtors. At our table, I like to ask silly questions like, "Why do you call it real estate? Shouldn't you call it, 'loan estate,' "bank estate," or 'borrowed estate' since you don't really own the property? Why do you want Americans to upgrade to a newer property after paying off the 30 years mortgage?"

 

There is another way to invest through REITs (Real Estate Investment Trusts). A good REIT can generate 6% to 10% return during a time when the bond market pays less than 1%. The secret to a good REIT is their property portfolio. Look for those that own office buildings and apartments with at least a 70% average occupancy rate. The money is from rentals. The REIT does not pay corporate income taxes. It is like a Sub-Chapter S corporation. The money is taxed as dividend income.  

Edited February 14, 2013 by JJReyes

[Curley]

There is another way to invest through REITs (Real Estate Investment Trusts). A good REIT can generate 6% to 10% return during a time when the bond market pays less than 1%. The secret to a good REIT is their property portfolio. Look for those that own office buildings and apartments with at least a 70% average occupancy rate. The money is from rentals. The REIT does not pay corporate income taxes. It is like a Sub-Chapter S corporation. The money is taxed as dividend income.

 

Don't forget the OP is English so he may not be interested in investing in US dollars.

[JJReyes]

Don't forget the OP is English so he may not be interested in investing in US dollars.

 

I forgot. There might be something similar to the American REITs in the U.K.

[i am bob]

And back to the OP....

 

Have you thought of buying a small building for apartments or a boarding house?  In the right location, you can probably get started for less and bring in as much (if not more) than you will get for a condo.  Sure, it's a little more work but not that much work.  And, if there is room on the property, you can always expand and make more money back.  Or re-invest back into other units.  

 

Before you know it, you will be known as the Slum Lord of the Philippines!  Maybe even the Rich Slum Lord of the Philippines...

 

:mocking: