Building Or Buying A Philippine Rental Property, Where To Start?

[Dave Hounddriver]

 

.  Why not sell the place and buy a couple rentals here in Philippines in wife's name?  

 

 

where would you start , going down this road, would you buy new or convert any suggestion

 

I suggested to Steve that he buy a couple of rental properties here, but I only mentioned it because he had stated having experience with a rental property where he came from.  I firmly believe:  Do what you know! So whatever you were successful at in your country of origin is a good thing to try to be successful at here.

 

I was mildly successful in Canada at renting some properties and the only advice that comes to mind is to have 6 rentals that can be acquired cheap and rented for high dollar (peso).  I came to that amount by trial and error and found out that less than that leaves too many months when the 'outgo' is higher than the income and more than that many rentals made it seem like a full time job.  But this was just my own personal experience.  Any other members want to give advice?

Edited September 27, 2014 by Dave Hounddriver

[jon1]

Well, I have started down this path. I recently acquired a property and will be renting it out in about 2 weeks. I bought a 3 bedroom 1 1/2 bath unit in the Subic Freeport. I had some renovations done (laminated floors, roof replacement, and other minor upgrades). My goal is to make money on the local economy in pesos (mitigating FOREX rates and inflation). This way my nest egg lasts longer, as I have to bring less into the country. The rental contract will be in the wife's name (non-US citizen) and that money will be taxed in the PI only (doesn't count against my tax filing).

[RBM]

 

 

.  Why not sell the place and buy a couple rentals here in Philippines in wife's name?  

 

 

where would you start , going down this road, would you buy new or convert any suggestion

 

I suggested to Steve that he buy a couple of rental properties here, but I only mentioned it because he had stated having experience with a rental property where he came from.  I firmly believe:  Do what you know! So whatever you were successful at in your country of origin is a good thing to try to be successful at here.

 

I was mildly successful in Canada at renting some properties and the only advice that comes to mind is to have 6 rentals that can be acquired cheap and rented for high dollar (peso).  I came to that amount by trial and error and found out that less than that leaves too many months when the 'outgo' is higher than the income and more than that many rentals made it seem like a full time job.  But this was just my own personal experience.  Any other members want to give advice?

 

 

I know of quite a few whom have been successful in rental properties abroad and came to pieces here.

 

First and foremost as we all know we can never owner the properties and should never forget this. 

 

Obtaining eviction because unpaid rental is a drama nobody needs. Years ago in Cebu my neighbour was an American con man, he ended up going to the extreme and for his insolence enjoyed over a years free rental plus power free. The owner went to court numerous times and spent heaps before finally having a judgment to evict.

 

What amazed me judges kept saying, you must reconcile discuss the problem. What is there to discuss when a tenant is 6 months plus in arrears.... 

 

In my opinion where this is most likely to be successful is....

 

1....The property is located near a popular preferably expensive  college

 

2....Painted up nice and tidy to attract the early 20 set...

 

3....Advertised above what one expects to receive in rental.

 

4...Normally the payer is a wealthy out of town Filipino whom will negotiate rental.

 

5 Allow a nice discount, insist on 12 months advance rental plus 2 months security deposit.

 

Usual due diligence of course applies.

 

The above is followed by some friends of mine in Cebu and is working. They will not get into collecting monthly rental. This also apples to expats whom can be very difficult when it comes to rent time.....

 

Well thats my say.

[stevewool]

Lots of wise words, and like many have said its the bad tenants that you dont want, gone are the days you just turned up with your brothers or friends and just threw them out,

I have lived next door to renters and what utter s---t people they can be and there is nothing you can do about it for months,

Having rental in the Phils will be down to Ems and maybe her family too, and i dont want to go down that road at all, My Ems is a beautiful woman inside and out but she has no head for money and she thinks nothing of giving to much for family and gifts, thats why i am in charge of the cash,

Like i have said the rental here in England will be fine and if it is not well it will be sold

[Dave Hounddriver]

Like i have said the rental here in England will be fine and if it is not well it will be sold

 

I had a similar 'rental' in Canada.  My daughter was 'buying' it from me on a 'rent to own'.  Problem is her boyfriend moved far away for his job, she followed, let her mother (my ex) move in . . and I got royally screwed once again..  So that is why I have little faith in a situation like that.

[stevewool]

 

Like i have said the rental here in England will be fine and if it is not well it will be sold

 

I had a similar 'rental' in Canada.  My daughter was 'buying' it from me on a 'rent to own'.  Problem is her boyfriend moved far away for his job, she followed, let her mother (my ex) move in . . and I got royally screwed once again..  So that is why I have little faith in a situation like that.

 

did not see that one coming , hay ho back to the drawing board

[manofthecoldland]

   Knowing how difficult it is to set your wife/outlaws up with an 'honest' way to make a living income, the idea of owning rental properties holds a fascinatingly, almost hypnotic appeal.  Most of us have known rental owners who like to tell how well things have worked out for themselves going down this road. At the same time, they often tell of their horror stories.  If you are a person of sufficient financial means and are experienced, it may go well for you..... in your own home country. Therein lies the rub. IMHO....everything here is not only dicey, but you're playing against the house and they've shamelessly stacked the deck in their favour with no apologies. 

  Everytime I play with this enticing idea I eventually end up slapping myself back into my own reality here, and review all the reasons NOT to do it. But thats just me. As an old man on a pension, having survived as a commercial fisherman and other jobs and pastimes in high risk environments, I am exceedingly and perhaps excessively risk-adverse at this stage of my life. I just want to keep what I have, enjoy the final years or decades of my life, and be content w/o dealing with other people's un-ending problems. 

   There was a lady who did  a posting who was either a balikbayan, overseas Filipina or OFW who has a lot of rentals in this country and her advice and warnings were enough to disabuse me of any fantasies I like to entertain in this matter.

   Feel free to explore and perhaps go the route if you feel lucky. For me.... Uh-Uh !  We went the route for awhile on fish-pond leasing, multi-cab transport franchise, turo-turo, sari-sari and even with good connections and advice... none was so profitable as to be worth the time and trouble from my vantage point. I just pulled the plug and my wife agreed. We still have a few pigs, but her competitive edge vanished with the loss of her food-service job here that provided free scraps, so we are down to our last 2 piggies and then we will close that up as well and just focuse on our hobbies.

   Even with our vacant properties here in a provincial capital city, the numbers don't come out to my satisfaction when I run them.

   If anyone out there is doing well in this and would like to share your sucessful experiences, I'd be happy to reconsider and re-evaluate my opinion. One of my Brit friends here (a London property manager) built a 4 apt. plex and home... don't know how well he is doing. The retired Japanese business man who came to my house christening also built a 4 plex, but most of his young wife's relatives moved into the units and I'm sure they aren't lavishing their money on their sister in the form of rent.

   Like I said.... I'm hungry to hear some success stories since my step-daughter is now a nurse working in Australia and wants to build some apts. on our lots, but I am very gun-shy on this one.

[expatpaulinmy]

In my opinion, buying a Philippine rental property in major cities is not a good option due to the high cost, as well as the pollution that comes with it. I think a better alternative would be to invest in up and coming cities that have high progress potential which also offers good living conditions as well as low cost of living. A good reference would be this article that I came across while looking for places to invest that's outside the metro. I believe that the government should really start decongesting the cities and having these alternatives would provide for a better living experience to those looking for one.

[Gerald Glatt]

Excellent article gives one pause.