Going Into The Property Market Business For Extra Income?

[jpbago]

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

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!

About the tax increases, it was here in the forum that I read it so it must be true. It was titled "Have you seen this?" I can't find it right now but I did find something else in the Living Costs Forum titled "Outrageous Utility Costs" like 7,000p for electric and 4,000P for water in a 32 sqm with 2 adults in Makati. I pay 2,000p for electric and 450p for water for a family of 6 in a 300 sqm house.

[Bruce]

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

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!

About the tax increases, it was here in the forum that I read it so it must be true. It was titled "Have you seen this?" I can't find it right now but I did find something else in the Living Costs Forum titled "Outrageous Utility Costs" like 7,000p for electric and 4,000P for water in a 32 sqm with 2 adults in Makati. I pay 2,000p for electric and 450p for water for a family of 6 in a 300 sqm house.

 

Electric rates in Phils are the highest on the planet. Period. Published fact. As for high water, there may be some hidden taps using  your water with out you knowing.

[Jollygoodfellow]

Electric rates in Phils are the highest on the planet. Period. Published fact. As for high water, there may be some hidden taps using  your water with out you knowing.

 

 

Quite some time back when a buddy posted about the cost of electric in the Philippines I did a check and found it was about the same price as Australia.   :thumbsup:

[Dave Hounddriver]

If you want to acquire property in the Philippines for investment purposes you may want to read the following.  It is an excerpt from the Canadian Trade Commission to Philippines but I expect it would apply to other nationalities equally.  The difference being that the Canadian Government has people here to help Canadians invest (if you follow these rules) so you may want to check with your own embassy..

 

 

2.5 Real Estate Regulations

 

The Philippines has stringent rules on land ownership and acquisitions. Under the Philippine Constitution, foreigners and foreign owned entities are prohibited from acquiring private and public lands. Land ownership is highly regulated that, generally, only Filipino citizens and corporations and partnerships at least 60% of the shares are owned by Filipinos are allowed to acquire lands.31

 

Nevertheless, there are various options that the government provides for foreigners retiring, investing and doing business to best protect their interest. Foreigners are allowed to purchase condominiums, townhouses, and buildings and enter into a long term land lease. Past administration had devised a plan that will nearly allow foreign investors to exercise the same land ownership rights enjoyed by the locals in an attempt to draw more foreign investors into the country. The ownership privileges included in this plan are the right of transacting leasehold right, encumbering it or liquidating it by allowing to mortgage the economic value of leasehold right or the present value of the lease.32 Also, the Condominium Act of the Philippines (Republic Act No. 4726) allows foreigners to purchase condominium units and shares in condominium corporations up to 40% of the total and outstanding capital stock of a Filipino owned or controlled corporation.

 

Foreigners may own houses or buildings in the Philippines provided they do not own the land on which they are built. Foreign individuals and foreign owned corporations, associations and entities not allowed to acquire lands in the Philippines may lease land for a period of 25 years, renewable for another period of 25 years upon mutual agreement of both lessor and lessee.33 The Philippines also grants long term lease on private lands to foreign investors for the establishment of industrial estates, factories, assembly or processing plants, agro-industrial enterprises, land development for industrial, or commercial use, tourism, and other similar priority productive endeavors. Any foreign investors investing in the Philippines are allowed to lease private lands for a period of 50 years, renewable once for a period of not more than 25 years under the Investors' Lease Act. For tourism projects, the lease shall be limited to projects with an investment of not less than US$5 million, 70% of which shall be infused in said project within three years from the signing of the lease contract.34

 

The usual manner for foreign nationals to protect their investments in the Philippines is for the foreign national or the foreign corporation to create a Philippine corporation to hold title. This will allow the Philippine corporation of the foreign national or foreign corporation the lowest investment risk and more control of their Philippine real estate investment and other Philippine investment assets. The foreign national or corporation may take ownership through the Philippine corporation of private lands, residential home with land lot and or commercial building with land. The foreign national or corporation may lease Philippine property in the name of the Philippine corporation for an unlimited period of time. Once the Philippine corporation has been created composing of 40% foreign owned and 60% Filipino owned, the foreign national may be the sole person on the Philippine corporation bank account, provided the foreigner has the proper Philippine visa status and power of attorney agreements. In this way, the foreign national is allowed total controls over the funds derived and paid out from the Philippine corporation which provides the most complete and secure way for foreigners to purchase and hold Philippine real estate assets.35

 

There are various firms in the Philippines which provide incorporation services to foreign national clients. Most incorporations are easy and reasonably priced depending on the type of the corporation to be formed. Classic incorporations to hold Philippine real estate may be a "General Real Estate" or "Trading or Marketing Company" or something similar to be able to buy, hold and sell Philippine real estate property. Corporations can also be formed to conduct business in the Philippines.36

 

In the Philippines, some believe that the restrictions to owning lands by aliens are hindrance to investment and that more foreign investors will put their capital in the country if the 60%-40% ownership will be abolished. Recently, the House of Representatives passed a resolution seeking to amend the Constitution to allow the acquisition by foreign corporations and associations and the transfer or conveyance thereto, of alienable public and private lands.37 This will not seem to happen easily, for attempts to amend the constitution remain a big issue in the Philippine political setting because of strong oppositions.

[GregZ]

Seems to me that Makati is a good place, with the right property of course, to get into the condo business.  Check the vacancy rates around where you are looking to buy.

 

I'm in Pasay, one can pick up a unit for 1.2 million php that rents for 15k normally.  You have to suck up the condo fee if it doesn't rent though AND here it looks like there are a few EMPTY units.  I got mine for 12k (still profitable for the owner) instead of the 15k they are asking.  I'm "special" so don't expect that all the time.

 

In Cebu City I looked into rental properties and it seemed just too low a rate of return AND the vacancy rate too high in Lapu Lapu.  :bash:

 

My background: I owned 2 rental houses and bought and sold several on my own.  Was doing GOOD on one rental and POOR on the other.  I sold BOTH just before the market crashed.  Now I am interested in the US stock market.  (See New Topic - Investment Options) 

 

I'm interested in the continued investment discussion... found in a few spots here in this thread.  LOOK for Investment Options topic.  I have 3 quoted from here to start it, plus of course my input.

[Bruce]

Seems to me that Makati is a good place, with the right property of course, to get into the condo business.  Check the vacancy rates around where you are looking to buy.

 

I'm in Pasay, one can pick up a unit for 1.2 million php that rents for 15k normally.  You have to suck up the condo fee if it doesn't rent though AND here it looks like there are a few EMPTY units.  I got mine for 12k (still profitable for the owner) instead of the 15k they are asking.  I'm "special" so don't expect that all the time.

 

In Cebu City I looked into rental properties and it seemed just too low a rate of return AND the vacancy rate too high in Lapu Lapu.  :bash:

 

My background: I owned 2 rental houses and bought and sold several on my own.  Was doing GOOD on one rental and POOR on the other.  I sold BOTH just before the market crashed.  Now I am interested in the US stock market.  (See New Topic - Investment Options) 

 

I'm interested in the continued investment discussion... found in a few spots here in this thread.  LOOK for Investment Options topic.  I have 3 quoted from here to start it, plus of course my input.

 

What size unit do you live in? I look around Makati and the cheaper ones to buy, all  800,000p + - 1,000,000p were 17 sqm or so. It was over 3,000,000p to get 30+ sqm.  And up from there!

[GregZ]

Remember that I am in Pasay... not TOO far but down the street from Makati, but my place it 1 bedroom, 32 sqm, with hot water in the shower.  The 1.2 mil php unit I referred to earlier did need some work, so total cost??? 1.5 million?  I don't know if it could have been rented the way it was.  The new owner had it completely renovated though.  Cost effective?  He seemed to think so... he has 2 properties in this building. 
 
For 3 million in Makati, I guess it is a DEAL here at even the 1.5 mil.  Walking distance to SM - Harrison and the LRT.  One jeepney ride to MOA (Mall of Asia) and probably 1 to a main street in Makati.

[bootleultras]

The one i bought originally in Makati, I got 5 years ago( will be turned over final quarter of this year)pre selling for 3 million for a 1 br 35sqm corner apartment on the corner of Makati avenue and Kalayaan, a great area for investors, I believe as is a stones throw (5 min walk) from the "delights" some seek in P Burgos.

The one Im looking at now is on Mire towards Ayala, but a 70sqm apartment with 2br for 3.5 which is what attracted me into this trail of thought in the first place, seems like a bargain and turnover is already under way.

All the comments & suggestions are really what Ive been looking & hoping for when originally opening this thread.

Cheers!

[Thomas]

Concerning estate for rent out:

Renters are often not as careful as owner, so better expect problems because of that. 

 

Bubble prices:

I DON'T look at paid prices, when I try to judge if it's a bubble, 

either look at ASKED prices for new build, because several try to get very high profits, and/or have very expensive external financing

but I would check what it would cost for to BUILD by "myself" with better financing than what's common in Phili.

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?

Yes, maximum 40 % can be own by foreigners when it's land or condo projects (but can be 100 % of BUILDING on LEASED land.)

 

 

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

Well. Everything is relative  :)   Swedish TV show a serie about estates in UK, mostly I have found paid prices "crazy".

(Compare: Within 2 hours from the continent or Stockholm, houses as e g my 6 room villa with some land and a nice view and calm neighbourhood can be bought for 100 000 USD. According to that TV program, I wouldn't get much for 100 000 USD in UK  :)  

I suppose the Swedish estate price level is a reason many Germans and Dutchs buy estates in Sweden.)

Tobacco is Phillip Morris and Altria which have done very well. PUBs simply raise their rates or fees while paying 4 to 8% dividends increasing every year. Look at TransCanada Pipelines, Enbridge, or KinderMorgan. Booze (Diageo) is another good one. All of these will continue to do well unless the world stops driving cars, stops smoking and drinking.

Well. Surely it can be true, but at least in Sweden the trend is MORE HEALTHY, and I know there are big alternative energy investments in e g Germany.

For some years other things can be better perhaps, but in the realy long run I believe the future is within:

/Meds to TREAT   :)  problems by old unhealthy habbits from tobacco and alcohol.

/More healthy living. 

/Some alternative energy. 

/But (parttly) because of much more farmland are used for producing alternative energies as e g making ethanol by sugar canes and corn, food prices have gone up much, so some types of food production/farmland I believe can be good investments for the future. 

[stevewool]

is it worth spending money converting a place into DOORS, as they call them ,looking at making upto 7 DOORS, just a room and rent that out,

I am not looking at making millions but a steady income to help pay towards our retirement