FutureRetiree Posted May 17, 2011 Posted May 17, 2011 I have a question.... :)I know in the US, there are some definite tax advantages of purchasing a home. Having said that, what are the advantages of building/buying a home in the Philippines versus just renting a condo. I know that for those that can afford to pay cash for the building/buying, you would obviously save the cost of monthly payments, but outside of that are there any other advantages? I guess I look at the uncertainty of resale value in the Philippines and retirement life in general and wonder if it would be wiser just to rent a condo or house. If I plunked down the money to buy the house and lot (in my Filipino wife's name of course) then I am stuck with it. In contrast, renting allows me to come and go as I please. If I decided I wanted to travel or move to a different area of the PI, I'm not stuck trying to off load a house and lot in an economy where it's not known for capital appreciation. As has been said, it can take a long time to see a return on investment for a house built and land purchased in the Philippines. I don't want to give money away at a loss and I don't want to build such a small house that I am not comfortable. I guess that's what made me think that renting a nice house might be better for me.My wife's family currently rents a 2 bedroom house for around 5000php per month. If I were to do the same, then that is 60k php per year. How does that compare to the cost of land and building a home in the provinces just outside a main city? I guess it would depend on how long you lived in it and the actual location. I would be interested in any comments/ opinions on the subject. Thanks!Scott Link to comment Share on other sites More sharing options...
Mr Lee Posted May 18, 2011 Posted May 18, 2011 I have a question.... :)I know in the US, there are some definite tax advantages of purchasing a home. Having said that, what are the advantages of building/buying a home in the Philippines versus just renting a condo. I know that for those that can afford to pay cash for the building/buying, you would obviously save the cost of monthly payments, but outside of that are there any other advantages? I guess I look at the uncertainty of resale value in the Philippines and retirement life in general and wonder if it would be wiser just to rent a condo or house. If I plunked down the money to buy the house and lot (in my Filipino wife's name of course) then I am stuck with it. In contrast, renting allows me to come and go as I please. If I decided I wanted to travel or move to a different area of the PI, I'm not stuck trying to off load a house and lot in an economy where it's not known for capital appreciation. As has been said, it can take a long time to see a return on investment for a house built and land purchased in the Philippines. I don't want to give money away at a loss and I don't want to build such a small house that I am not comfortable. I guess that's what made me think that renting a nice house might be better for me.My wife's family currently rents a 2 bedroom house for around 5000php per month. If I were to do the same, then that is 60k php per year. How does that compare to the cost of land and building a home in the provinces just outside a main city? I guess it would depend on how long you lived in it and the actual location. I would be interested in any comments/ opinions on the subject. Thanks!Scott Welcome again Scott to the forum, basically you answered your own question and it is usually better to rent than buy in most cases and especially in the cases you wrote about. To me the only advantage of owning our condos is that my wife will have something for her future once I am gone and that they have gone up in value since we purchased them four years ago. A lot will have to do with location, your age difference, how long you have been married, how much you actually know your wife and her family, and how much you trust her and her family, since owning something in someone else's name in any country can be a crap shoot with lots of possible losses. Some possible problems, what if she God forbid dies before you, what if her family puts too much pressure on her for money or other things, and then there are more but no need to list them. Many people say to never be worth more dead than alive in any country and especially a poor country, so that is something to take into consideration. So a lot will have to do with your particular situation, and how strong willed you wife is when dealing with her family. Buying or renting is a personal decision that one makes based on their own situation, but as far as I know owning has only the advantage of a person knowing where they are going to be down the road if they are the type of person who stays put and does not move around or travel a lot. Owning a condo give a person the ability to travel around and always have a home base, and usually one that can be rented out for income if the condo is in a good rental area, so again it is up to a persons situation, but based on what you wrote, renting would be better IMO. Link to comment Share on other sites More sharing options...
FutureRetiree Posted May 18, 2011 Author Posted May 18, 2011 I have a question.... :)I know in the US, there are some definite tax advantages of purchasing a home. Having said that, what are the advantages of building/buying a home in the Philippines versus just renting a condo. I know that for those that can afford to pay cash for the building/buying, you would obviously save the cost of monthly payments, but outside of that are there any other advantages? I guess I look at the uncertainty of resale value in the Philippines and retirement life in general and wonder if it would be wiser just to rent a condo or house. If I plunked down the money to buy the house and lot (in my Filipino wife's name of course) then I am stuck with it. In contrast, renting allows me to come and go as I please. If I decided I wanted to travel or move to a different area of the PI, I'm not stuck trying to off load a house and lot in an economy where it's not known for capital appreciation. As has been said, it can take a long time to see a return on investment for a house built and land purchased in the Philippines. I don't want to give money away at a loss and I don't want to build such a small house that I am not comfortable. I guess that's what made me think that renting a nice house might be better for me.My wife's family currently rents a 2 bedroom house for around 5000php per month. If I were to do the same, then that is 60k php per year. How does that compare to the cost of land and building a home in the provinces just outside a main city? I guess it would depend on how long you lived in it and the actual location. I would be interested in any comments/ opinions on the subject. Thanks!Scott Welcome again Scott to the forum, basically you answered your own question and it is usually better to rent than buy in most cases and especially in the cases you wrote about.To me the only advantage of owning our condos is that my wife will have something for her future once I am gone and that they have gone up in value since we purchased them four years ago.A lot will have to do with location, your age difference, how long you have been married, how much you actually know your wife and her family, and how much you trust her and her family, since owning something in someone else's name in any country can be a crap shoot with lots of possible losses. Some possible problems, what if she God forbid dies before you, what if her family puts too much pressure on her for money or other things, and then there are more but no need to list them. Many people say to never be worth more dead than alive in any country and especially a poor country, so that is something to take into consideration. So a lot will have to do with your particular situation, and how strong willed you wife is when dealing with her family.Buying or renting is a personal decision that one makes based on their own situation, but as far as I know owning has only the advantage of a person knowing where they are going to be down the road if they are the type of person who stays put and does not move around or travel a lot. Owning a condo give a person the ability to travel around and always have a home base, and usually one that can be rented out for income if the condo is in a good rental area, so again it is up to a persons situation, but based on what you wrote, renting would be better IMO. Thanks Kuya Lee! I appreciate your insight. You are most certainly correct that it is a personal decision based on my situation. I am honestly leaning towards the rental, even if to just start out, but wanted to hear if there were any benefits to the other options I wasn't thinking about. As it is now, I plan on taking the first year of my retirement to get there and just see if living there is something I can do on a permanent basis. So for at least that period, I think renting is the only option for me. After that, I will likely weigh my options again. Thanks again so much for your input!ScottAlso, thank you for moving this post to a better place. Link to comment Share on other sites More sharing options...
Art2ro Posted May 18, 2011 Posted May 18, 2011 Simple choice really! Look at it this way in annual costs! Lets use P10,000 a month as a base for renting. When you rent, it will cost you P120,000 a year. If one owns a home that's paid for, they still have property tax and some Home Owner's Association fees. Average property tax on a small home and lot annually = P8,000, average HOA dues around P77 per sq meter = P13,000 annually = taxes and HOA = P21,000 annually! So, does one rent for P120,000 a year or buy a home paid off and just pay P21,000 a year for property tax and HOA dues! P120,000 vs P21,000? Which one will you choose at the present or when after we kick the bucket leaving our spouses on their own to fend for themselves? And it does too depend on location, location, location! No need to expand on that subject, because it's obvious, squatter or upscale style of living! I have based those figures on our personal experiences, because those figures are what we live with today! We have a small home that's almost paid for, in a nice location in a gated subdivision in a modern suburb setting, that's safe, clean and quiet! We paid 2.5 million pesos for our home in 2001 and this same home such as ours are now going for 7 million pesos in our area! My wife will be in good shape financially whenever I kick the bucket! Will yours? It was a long road to travel, but we finally made it and now we're content, kicked back and enjoying our retirement without too much worries in the future! Life is truly grand when a plan comes together in the end! Life is what we all make it to be! Different strokes for different strokes! Link to comment Share on other sites More sharing options...
Mr Lee Posted May 18, 2011 Posted May 18, 2011 Simple choice really! Look at it this way in annual costs! Lets use P10,000 a month as a base for renting. When you rent, it will cost you P120,000 a year. If one owns a home that's paid for, they still have property tax and some Home Owner's Association fees. Average property tax on a small home and lot annually = P8,000, average HOA dues around P77 per sq meter = P13,000 annually = taxes and HOA = P21,000 annually! So, does one rent for P120,000 a year or buy a home paid off and just pay P21,000 a year for property tax and HOA dues! P120,000 vs P21,000? Which one will you choose at the present or when after we kick the bucket leaving our spouses on their own to fend for themselves? And it does too depend on location, location, location! No need to expand on that subject, because it's obvious, squatter or upscale style of living! I have based those figures on our personal experiences, because those figures are what we live with today! We have a small home that's almost paid for, in a nice location in a gated subdivision in a modern suburb setting, that's safe, clean and quiet! We paid 2.5 million pesos for our home in 2001 and this same home such as ours are now going for 7 million pesos in our area! My wife will be in good shape financially whenever I kick the bucket! Will yours? It was a long road to travel, but we finally made it and now we're content, kicked back and enjoying our retirement without too much worries in the future! Life is truly grand when a plan comes together in the end! Life is what we all make it to be! Different strokes for different strokes! Excellent info Art, but the only thing you have not taken into consideration is the cost of the money. Using your figure as a guide, 2.5 million pesos would be about $100,000 US dollars, so if a person could get say 3% on their money, then that would be $3000 US dollars or p129,000 a year in income at todays exchange rate, then one would have to deduct the income tax due to the bracket they find themselves in. Also it is not uncommon to get 3% or more here in the Philippines on pesos in a safe bank, so the same rule would apply. Now taking into account the cost of the money and the cost of expenses and it kind of becomes a wash. I still like owning but I usually stay put in a home for many years, whereas it seem most people move about every 5 years, so if a person is a mover, then renting might be better in the Philippines since selling here usually takes quite a while unless a person is willing to sell below market, and selling here can be damned near impossible if a nice home is in a province area where the buyers might be scarce. Link to comment Share on other sites More sharing options...
Mr Lee Posted May 18, 2011 Posted May 18, 2011 (edited) Art2ro's post was moved HERE so we can expand on it without taking this off the original topic Edited May 18, 2011 by Kuya Lee repair link Link to comment Share on other sites More sharing options...
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