Millennials today live for the moment. They buy the latest gadgets, take expensive trips, and spend crazy money on food like there’s no tomorrow. Just don’t. You’re not going to be 30 forever.
But not you, dear reader! You know that investing your money is the best way to be financially secure and stable. You’re wise, motivated, and in it for the long run.
If you’re clueless about what to invest in, you’re in luck. This article will teach you all about the exciting and wonderful world of investing in Real Estate!
From Condominium units to house and lots, to discussing prime locations, acquiring loans and everything in between, we’ve got you covered!
Why Invest in Real Property?
Investing in real estate makes sense because unlike cars, gadgets, or other items, real estate is an asset that appreciates, or increases in value, over time. To better appreciate this concept, let’s look at other items and see how they stack up.There’s a popular saying which goes, “If it rides, flies or floats, it’s cheaper to rent it.” And with good reason! Cars (or any vehicle, for that matter) require gas and oil to run. They’re a headache to maintain, repair, and find spare parts for. They may be good today, but they’ll be outdated in 5 years. They’re depreciating assets. Think about it. Vehicles can break down, stock market prices can fluctuate, gadgets will get outdated… but a piece of land lasts forever. (Not if you’re in China though, where the land is yours for 70 years only.)
But aside from land, other real estate investments are also built for longevity. Let’s discuss condominium units. Though condos won’t last forever, reputable property developers will maintain their projects enough to last a lifetime. (In fact, we have a detailed review of the major property developers later on in this article! You may want to check that out to see if that condo you’re eyeing deserves your hard-earned money.)
And even if the condo developer goes bust… there’s no need to worry! Did you know that each condominium unit owner is a stakeholder in the condominium project? They have a say as to what will happen to the condominium project, such as partition or sale of the entire project, as if the unit owners were co-owners of the entire project.
With longevity and stability as the main reasons, it’s easy to see why capitalizing on Real Estate Property is a wise investment.
Philippine Property Market Outlook is Big and Booming
Now is the best time more than ever to invest in real estate in the Philippines! Why, you may ask? It’s mainly due to the favorable market conditions brought about by a strong and steadily growing economy. The Philippine economy just posted a growth of 6.4% in the 1st quarter of 2017, second only to China. It’s one of the strongest performers among emerging economies in Asia, and it has no signs of slowing down anytime soon.
Investing in real estate makes sense because of…
1. Huge demand. Be it for tourism or business, everyone wants a piece of the Philippines. Tourists are coming in by the millions, and the population is growing steadily. These conditions are perfect for those looking to capitalize on real estate investments.
For example, let’s focus on one industry alone: Call Centers. As the country with the highest English speaking population in the world, the Philippines is good for Call Center businesses. Lots of jobs are being generated by that industry alone, and condos and other apartment rentals are popping up just to accommodate the influx of workers. And that’s just one industry alone; imagine all the other expatriates and foreigners working here. There’s a huge demand for real estate investments, so now is the perfect time to invest.
2. ASEAN, Foreign expansion, and the China effect. ASEAN will open the doors for Visa-less travel between neighboring Asian countries. The result? More tourism, more jobs, and more growth.
As for foreign expansion and the China effect, many projects are lined up ensuring Philippine growth… around $15 billion worth. The projects include hotels, airport segments, telecommunications, and even steel plants.
Now, wouldn’t you want to capitalize on all that business?
3. Flexible payment schemes. There are many ways to pay for your real estate investment. From government loans like PAG-IBIG to banking loans that start as low as 4.75% interest, institutions are making it easier for you to own real estate through flexible payment schemes.
Just remember to have a good credit rating, a stable income, and collaterable assets, and you’re all set. Say hello to your new investment! Loan approved, in easy to pay installments.
Now that you’re convinced about investing in real estate in the Philippines, let’s take a look at the different property segments and locations so that you have an idea where to scout and look.
Property Prices in Philippines
When investing in real estate in Metro Manila, there are three key points that you must consider. First is Location, Second is Property Development, and Third is the Price Point and Payment Options. We’ll discuss all three in detail.
When scouting for real property to invest in, remember the golden rule: “Location, location, location.” The price of “prime lots” is dictated by where they are situated relative to the urban center. For your property to be hot stuff, it must be near offices or schools, malls or recreational facilities, or hospitals and churches. However, this rule is flexible depending on the type of property that you’re looking at. Let’s illustrate.
For farms and lots – location is not necessarily important. The purpose of this type of investment is for growing crops, or maybe you want a huge tract of land for a garden, resort, or vacation house. So even if your property is out in the boondocks (bundoks), location is not necessarily important as long as it fits the proprietor’s needs.
For house and lots and condos – Given today’s millennials or growing families, location is the first thing that they’ll look at when renting property. After all, the success of all these condominium projects popping up is mainly on the premise of convenience and access. Is it walking distance to the kids’ schools or universities? They wouldn’t have to commute or take a school bus. Is it near the office? That’s less time spent on travelling, which can be dedicated to family bonding.
Traffic is also a big factor why the urban condo lifestyle is booming. Between two condo units for sale, the first one walking distance to the mall, the second one requiring a simple 5-minute ride; the one nearest to the mall will win every single time. That’s the style of property developers to ensure that they have a good customer base for their malls. They build their condos around malls and shopping centers where it’s convenient for the tenants to just go down from their units and just shop and go around. Look at SMDC, Eastwood, Century Development, the list goes on. They also construct their projects near train stations and bus terminals.
Though there may be some tradeoffs, in general the rule stands that a prime location is key to a solid real estate investment.
2. Property Development
Property Development can be broken down into two key points: First, Zoning. Second, is the Property Developer itself.
The Philippines is notorious for having a mixed bag of property zones. It’s common for subdivisions, restaurants, and even factories to co-exist within a few blocks away from each other.
Compare the streets and avenues of New York to Makati’s patchwork. Both are Commercial Business Districts.
That’s why you need to be diligent and examine the vicinity properly. Believe it or not, a village in Antipolo lives right next to a cemetery. What’s bad about it is that the village is situated on top of a slope, and the cemetery down below… so you have a wonderful, overlooking view of all the plots and tombstones at the bottom. Quite eerie. So for investment purposes (and also for personal purposes, should you wish to use the property in the future), it’s best to plan, study, and do your homework first before signing that contract.
The next key point is about the Property Developer, or the company in charge of building the project. The property developer must have a proven track record, a good reputation, and transparent company practices. If not, you’re in for a whole world of pain. You might think that you’re getting a good deal on an affordable house, but in reality you’re setting yourself up for headaches in the future. They have quality control problems, ridiculously long construction times, or hidden fees that will charge you up to your eyeballs.
For example, a property developer (let’s not name names) sells its real estate for quite an affordable sum, so buyers are baited early on into committing. But later on, they would be charging other expenses, like Legal Miscellaneous fees which cost 200,000 pesos! This is sneaky and devious because if you look at legitimate property developers like Ayala Land, SMDC, and others, they don’t impose such fees and are transparent with their billing statements.
Buying from a reputable property developer will help you avoid headaches, and give you peace of mind on your real estate investment.
3. Price Point and Market Segment
The third factor that is worth looking into is the Price Point and Market Segment of your intended real estate investment.
Price point, of course, is the main factor that every buyer will look at. Not everyone is minted, in fact quite the opposite! Most people are either cash strapped or do not yet have the entire value of the property on hand. That’s why mortgages, loans, and flexible payment schemes are the common practice.
But whichever way you look at it, the price point should be competitive when the property is matched up against similar competitors or projects. Is the unit more expensive than other projects within the vicinity? What are the inclusions, is it fully furnished or does it come with a parking space? Are the payment schemes flexible and easy to work with? Of course price point is a major factor that you should consider, and you should really do your homework and compare the best options in order to get your money’s worth.
On the other hand, market segment is the type of market that the property belongs to. There are three main categories: low cost housing, midrange, or high-end. To determine what category your property development belongs to, the first thing you can do is to look at the price point. But market prices change over time, so aside from looking at the price, you also have to look at other factors.
Usually, you’ll know the market segment instinctively by looking at the name, branding, and track record of the property developer. If you notice, property developers won’t really tell you if their project belongs to which certain category. It all boils down to branding, advertising, type of materials used, unit size and quality, and a host of other factors. Property developers may use the words “affordable housing” or “upscale, premier” in order to describe their property.
Example: Getting along with the Neighbors
Last but not the least, is the type of clientele that this market segment caters to. You get what you pay for of course, and so you should expect the kind of neighbors that you will have to deal with.
Case in point: a home owner was complaining that he can’t get any sleep at night. His next door neighbor was always rowdy and loud even way past midnight. As much as he does not want to discriminate, their neighbor was an OFW or seaman and every time he goes home, there would be drinking and karaoke sessions until the wee hours of the morning. This property development was somewhere along the low cost to mid-range category.
As you can see, you also have to weigh market segment and price point as important factors in your real estate investment journey.
Best Cities in Philippines for Real Estate Investing
Let’s go through the top cities in the Philippines for real estate investments.
Makati is the commercial business district of the Philippines. In its cityscape, you’ll see tall skyscrapers housing big banks, multinational companies, major law firms, and everything in between. Makati also houses the Philippine Stock Exchange and the old financial district, as well as Five Star hotels, making it a huge draw for businessmen and tourists alike. Not bad for an area that used to be a former swamp land!
Expansion in Makati is primarily skyward, consisting of condominiums and building projects; but it also has an enclave of private subdivisions, where house and lots are big and the prices, even bigger. If you want to invest in Makati, you should be armed with a fat wallet and you should be willing to spend.
Taguig is sister city to Makati and is a burgeoning commercial district in its own right. It’s a vibrant city filled with such potential, with multiple new buildings being constructed at almost every other block. Bonifacio Global City (BGC) was a former military base but is now an urban center populated by big companies, tech startups, night markets, football fields – it’s every millennial’s dream.
But when investing in Taguig, keep in mind that it also has a huge portion of depressed areas. Property price and demand varies, so be sure to study the vicinity carefully before making an informed purchase.
Pasig calls itself “The Green City”. It’s a diverse area filled with a good mix of businesses, villages, and schools. It used to be a former rural settlement, and is mainly residential and industrial. However, Pasig is increasingly becoming commercial because of the business-driven Ortigas Center, which it shares borders with its neighboring city Mandaluyong. Pasig is also a good jumping point as it serves as a hub to the other cities.
When considering investments in Pasig, studying the location and the surrounding vicinity is important. You may want to stay away from its factories or from the Pasig River, which is still being rehabilitated.
If there’s a hotspot for shopping, then the Tiger City of Mandaluyong is the place to be. With SM Megamall, Shangri-la Plaza and other shopping districts around the area, it attracts a lot of foot traffic and is easily accessible. It also soars in the business and finance aspect. It houses the Ortigas business district and the Asian Development Bank, which is home to lots of foreign employees and expatriates. You definitely won’t have a shortage of tenants if you’re looking to invest in the Mandaluyong area.
Pasay is the airport city of the Philippines. You may not believe it, but ALL of Manila’s airports are conveniently located within Pasay city. It’s a very vibrant city, good for commerce and leisure – with casinos and hotels strewn across the area, and Newport City near the domestic airport. But the drawback of all this good business is that it’s traffic central. However, it’s a good, booming business for those looking to rent or flip condo units. You’re almost guaranteed to have a steady turnover of tenants if you invest in a condo within the airport vicinity.
Quezon City is the most populous city in the country, and the largest city in the National Capital Region. It’s home to the country’s top universities such as Ateneo de Manila, University of the Philippines, to name a few. It also has quality hospitals such as St. Luke’s Medical Center, Philippine Heart and Lung Center, among others. And with classy villages like Ayala Heights and La Vista, and condos located at prime lots near schools, it’s a good location for a sound real estate investment.
Muntinlupa is a highly urbanized city which is the southernmost city of the National Capital Region. This city is a contradiction, to say the least. It houses the national jail, the New Bilibid Prison, as well as the posh Ayala Alabang Village, one of the country’s wealthiest residential villages. Bordering the Laguna lake, it contains scenic views as well as quaint rolling hills. When investing in Muntinlupa, make sure that you stay away from the jail and stick to the scenic spots so that your property retains its value.
Cebu is one of the most developed cities in the Philippines, and a center for trade and tourism in the Visayas region. An interesting mix of urban and beach life, it’s home to many industries such as shipping, furniture-making, BPOs, among others. With a vibrant food scene, lots of tourist attractions, and historical landmarks, no wonder Cebu attracts millions of tourists yearly. It’s best to get a real estate investment in the city to capitalize on this growing area.
Davao is the largest city in the Philippines, with an area of 2,443 square kilometers! It has an interesting mix of urban, country, and beach properties, with a variety of activities perfect for tourists. (Mt. Apo, the tallest mountain in the country, is also located in Davao.)
It’s a haven for foodies, with fruit exports such as bananas, durian, pineapples and seafood such as yellow fin tuna, milkfish, shrimp, and crab. And as the 3rd most populous city in the country, your real estate investment is in good hands if you situate it near the urban center. Davao: Life is here!
Last but not the least is Baguio, the Summer Capital of the Philippines. With its cold climate, pine forests, and picturesque views, it’s a tourist spot for those seeking refuge from the unbearable heat of the city. Especially during summer or the Panagbenga flower festival, tourists number by the millions. That’s why there is a booming hotel and inn industry in Baguio, with over 80 establishments available. If you’re tempted to get a condo unit or a summer home in Baguio, that would certainly be a wise acquisition with lots of potential.
Types of Property for Sale
There are numerous types of properties and real estate that you can invest in. But strictly speaking, for the purposes of this article let’s narrow down our discussion to the relevant ones. These are: Lots, Houses, and Condominiums. Let’s discuss each one.
A vacant lot is a good starting point if you want to build your house (or business) from scratch. Prices are pegged at a per square meter basis. Of course, prime lots near the city command the highest prices, while lots located near the outskirts of town are much more affordable.
There are basic tips which you need to look out for when scouting for vacant lots in the Philippines. First, deal only with titled property. It’s a headache to rely only on tax declarations when dealing with untitled lots, because you would need to trace the chain of ownership from previous owners. Next, deal with the actual sellers themselves. Things get really cloudy when the sellers themselves are not the ones named in the title, or if they act through Special Powers of Attorney. Third, verify and check the title on file with the Registry of Deeds. You must check the paperwork diligently, and not just trust the seller at face value.
It is important to note that foreigners CANNOT purchase land in the Philippines and have it titled under his own name. Though exceptions apply, (hereditary succession, acquisition by a former natural born Filipino citizen, etc.) it’s best to consult a lawyer if you’re a foreigner seriously considering to purchase property in the Philippines.
Condos are a good investment for those looking to live in the city, or seeking a self-sustaining investment. Location is the primary consideration for condos, because they are located smack dab in the center of civilization. Especially in the Philippines where the traffic is absolutely horrendous, condos are a sensible purchase because they are easily accessible to schools, offices, and recreational centers.
When looking at condos as an investment, it is important to have clear goals in mind. Will you live in it yourself, or are you just looking to rent it out until it pays for itself over time? Will you flip it over after the payments are done? These are important questions because most people think that finding buyers or renters for a condo is easy. If located near schools or offices, that may be true and it’s a good self-sustaining investment that would pay for itself over time. But if your condo is located at an odd part of town, you might be disappointed to find out that there would be no real demand. You could be faced with an empty unit for a long time, with your association dues and bills piling up.
Note that unlike land, foreigners can purchase condo units in the Philippines and have it titled under their name.
House & Lot
What makes a house and lot an attractive option? First, is that you get to own the land itself. This is unlike condo units, where you only get to be a shareholder of the property development and you do not really own the land on which the building is constructed. Next, house and lots may be subjected to numerous home improvements. This is unlike condo units, which usually have a very strict deed of restrictions (some won’t even allow you to drill holes on your wall to support your picture frames!) Lastly, with this setup, kids can be one with nature, and freely roam around the yard. There is a big expanse of space for you to take up your hobbies. Compare this to condos, where you are confined to small spaces and hallways, and you are subject to the rules of the Property Management Office of your property developer.
Also note that as with vacant land, a foreigner cannot purchase a house and lot and have it titled under his name.
When it comes to condos and housing models, there are 3 different property statuses: Preselling properties, Rent to Own properties, and Ready for Occupancy properties. Each scheme has its own pros and cons. Let’s take a look at each one.
Preselling properties are a godsend to penny pinchers and those looking to save a ton of money. Especially if the condo is still in the Letter of Intent (LOI stage), the contract price will be much lower (as much as 40%) than Ready for Occupancy units. However, it carries with it the element of risk.
Buying preselling properties is risky especially if the property developer is new or has an unproven track record. There are numerous reasons why, which could include: slow construction process, quality of materials used, or even a change of plan from the intended proposal.
When considering buying preselling properties, keep in mind that you should absolutely avoid fly-by-night development companies. Only trust established ones such as Megaworld, SMDC, DMCI, etc. You’ll lose your money and property if ever the company goes bankrupt. Although our local laws and the HLURB guarantees protection to consumers, it could take a long time before you can recover your money from a developer that goes bankrupt. Thus, it’s better to be safe than sorry.
Also, choose a profitable location so that you’re sure that your unit value will not decrease. In case you want to rent out your property first to tenants, you can still command a good price.
But one thing for certain, is that buying preselling properties requires commitment on the part of the buyer. You will need to shell out downpayment, and yet your unit is still under construction. You’d need to wait for quite some time before the unit is constructed and turned over to you. All in the name of savings. Thus, you should evaluate your situation and see if buying preselling units best suits your needs.
Rent to Own Properties
The rent to own payment scheme is a convenient option if you truly plan to use the unit as your primary residence in the next 10 to 20 years. The contract price for the unit will be more expensive, but what you get in return is a convenient payment scheme that will ease the amortization of the whole contract price into manageable, monthly chunks.
However, study the contract carefully. Be sure to watch out for interest rates and other incidental fees because they might balloon the price of your monthly payment. Also, Rent to Own properties are getting less popular and it seems that many developers are not using this scheme anymore when selling their properties. You’d have to search high and low for rent to own payment schemes, but they still do exist.
Ready for Occupancy Properties
Ready for Occupany properties means that the construction is already finished, and the unit is up for sale and ready for turnover. There’s no risk involved, because the construction and development stage is already completed. You can view the units for sale, go around the property and look at the quality of materials, and decide for yourself if it’s worth investing in.
However, you’ll pay full price for the unit. This option is more suited for the rich buyer with a low tolerance for risk. For example, a preselling unit costs around 2 to 2.5 Million pesos for a 50sqm unit. If this is sold at the Ready For Occupancy date, the price will balloon to around 3.2 to 4 Million pesos. This money could have been better spent elsewhere, like new appliances or even for down payment at another condominium project. Evaluate your finances and really decide whether this is the best option for you.
Best Property Developers in Philippines
Here is a list of the best property developers in the Philippines:
SMDC. SM Development Corporation is a residential development project from mall tycoon Henry Sy. With SM’s successful malls, supermarkets and stores around the country, they are now setting their sights at building quality condo units for the Filipino people.
SMDC’s developments are strategically placed at prime lots around the Metro, and so its residents are at the heart of the action. Usually, these condos are conveniently located near train terminals or shopping centers. With convenience, quality, and a proven track record of successful projects, it’s easy to see why SMDC condos are attractive and reliable investments for the discerning consumer.
DMCI Homes is an established name in the property development scene. Backed with 50 years of experience in real estate development, it was one of the pioneers even before the condo boom in the 80s.
DMCI are experts in mid-range condos. That's the advantage of being both the constructor and developer. Compared with other condos in the same category, craftsmanship is high quality and you surely get value for your money.
Plus, DMCI is recognized by the industry. They were awarded by Reader’s Digest as a Trusted Brand in property development in the Philippines for 2012. With quality furnishings, contemporary styles and well-designed amenities, DMCI Homes will provide a comfortable home that you and your family would be proud of.
Megaworld is another experienced property developer with an emphasis on building big. Just look at their township masterpieces in Eastwood City and Venice Piazza if you’re not convinced. In Eastwood City alone, they claim to have completed “19 luxury condominium towers, 10 first-class corporate office buildings, 7 ongoing residential projects”… and many more.
What is unique about Megaworld is that they don’t just develop the condo project, they build a community around it. Their township projects are home to large multinational companies, top call centers, international schools, embassies, just to name a few. So if you want to be part of a vibrant, engaging community, pick a Megaworld project for your next real estate investment!
Robinsons Land is the residential development project of mall tycoon John Gokongwei. Known for Robinsons malls nationwide, they are building residential projects to make life more meaningful for the Filipino people.
Robinsons Land is committed to developing innovative solutions to the rigors of everyday living. They offer a variety of projects at different price points to best suit the budget and needs of different Filipino families. For instance, their Robinsons Communities line offers affordable, quality condos for the growing Filipino family. On the other hand, Signa Designer Residences is for the upscale millennial who needs a luxurious address for his trendy lifestyle. With all these choices at a competitive price point, truly Robinsons has got city living done right.
Federal Land is another prime real estate developer that should appear on your radar. If you’ve heard about the classy Marco Polo Residences and Hotel, then you already know what to expect from the experts at Federal Land. They have been creating properties and shaping communities for over 40 years, and they will bring this expertise to make sure that your living conditions are as ideal as possible.
With a good track record and capability to deliver, trust Federal Land to be a sound investment for you and your family. Beyond Structures – reshaping the skyline, reimagining the country. That’s Federal Land.
Camella Homes has grown to become one of the largest housing developments in the country. Dating back to the early 70s under the leadership of Manny Villar, they cater to the low to medium range market for growing Filipino families looking to have their very own starter homes. Also, Camella Homes recognizes their role in nation building, especially in catering to OFW investments. To quote, “Camella Homes remains a beacon of hope for overseas Filipino workers seeking to realize their dream of owning homes.”
With every house that they build, they see a Filipino Family; for every subdivision they create, they envision a Filipino Community. Camella Homes promises a quiet, peaceful and friendly neighborhood for the ordinary Filipino.
Filinvest is another up and coming company that has been making waves in the property development scene. Its mission and shared values are a sight to behold, to quote: “The primary responsibility of Filinvest Land is to the people that inhabit the cities, communities, and homes it has created. Filinvest will continually contribute to the economic development of society and will function as a good corporate citizen.”
Aside from their expertise in building villages and subdivisions all over Metro Manila, they also have a diverse selection of properties that are worth your investment. For instance, their Oasis line of mid-rise apartments are introducing a resort-style living experience to the wise, budget conscious, middle class Filipino. At Filinvest: we build the Filipino dream.
Rockwell Land is a high end property developer which focuses on exclusivity and unparalleled quality. You’ll recognize Rockwell buildings in the city skyline because of their distinct trademark: the edges of its buildings are outlined with yellow lights. Their pride and joy, the Rockwell Center in Makati, is a stellar example of what every high end community should aspire for.
They continuously raise the bar for property development and have exciting projects lined up such as the Proscenium, designed by world class architect Carlos Ott. With such audacity and vivaciousness, getting a property at Rockwell signifies that you’ve made it. Rockwell Land truly creates admired communities, beyond the ordinary.
Shang Properties is a breakthrough property developer that is truly world class. It is set to revolutionize the 5-star residential condominium market with its innovation and excellent service.
The name “Shangri-La” is a mythical place which means paradise. And truly, their name fits their company indeed! The Shang group is well known for being one of the top hoteliers in the country. Armed with their rich technical skill and proficiency, they’ll deliver the best luxurious living experience that money can buy.
Ayala Land. That last name alone, Ayala, is a brand in itself. Responsible for building the Makati cityscape into what it is today, Ayala branded projects have withstood the test of time. In fact, Ayala celebrated its 180th anniversary as the oldest business house in the Philippines.
Their building designs are brilliantly crafted and they have excellent overall development since they also incorporate their malls in their projects. They have a tried and tested track record, and their properties go up in value over time. With such rich heritage and craftsmanship behind it, you have a real gem of an investment in your hands with Ayala Land.
Alveo Land is the midrange to high end residential condominium market of Ayala Land. They are aggressive in launching new towers in key spots around the country, such as the High Park Tower in QC, the Veranda East Tower in Taguig, Park Triangle Residences in BGC, and many more in Nuvali and Pampanga.
Their units may be pricey, but you know that you are investing in more than just location, but also in management and quality amenities. Because a good location won't do alone if the property is maintained badly; you need to have both. With Alveo Land, welcome home to living well!
Amaia Land is the affordable housing arm of Ayala Land. In Spanish, “Amaya” means the fulfillment of a dream. And truly do they empower the Filipino spirit!
They cater to a broad, affordable market with its ideal clients such as government employees, teachers, manufacturing employees, small business owners, starting professionals and families of Filipinos working abroad. Amaia Land: making affordable homes for the everyday Filipino family!
Avida Land is… you guessed it. It’s another Ayala Land company, but this time aimed at the midrange market. Its goal? Delightful and inspired living. Catering to millennials, yuppies and starting families, Avida promises to foster an inspired and engaging community, motivated, driven, and in pursuit of their passion. They have numerous projects that can suit a wide variety of needs. For example, the Avida Towers New Manila are condo units for urban living. On the other hand, they have villages like the Avida Village in Nuvali, Laguna for a well planned community in the burgeoning city of Laguna. Choose from among their wide range of options and decide what suits your lifestyle best. Avida Land: your companion in your journey of living a meaningful and balanced life.
As for housing loans, there are numerous options available for you to finance your real estate investment. Let’s discuss the major ones.
Pag-ibig Housing Loan
I bet you didn’t know this, but Pag-IBIG actually is an acronym which stands for: Pagtutulungan sa Kinabukasan: Ikaw, Bangko, Industria at Gobyerno.
Pag-IBIG is a provident fund by the government to provide options for low-cost and socialized housing to low income Pag-IBIG members who cannot afford the housing packages available in the market.
You can also use the housing loan to finance a wide variety of house related needs, such as purchase of a residential lot or condo, Home improvements, refinancing of an existing mortgage, and many more.
There are 4 main criteria for eligibility: Active Membership, Age, Capacity to Pay, and Other Outstanding Loans.
1. Active Membership
You must be an active member for at least 2 years, and contributed a minimum of 24 monthly contributions.
Upon loan application, you must not be more than 65 years old.
At the date of maturity, you must not be more than 70 years old.
You must be insurable. This means that factors such as health, life expectancy, risk profile, among others, meet the requirements.
3. Capacity to Pay
Your monthly amortization (principal + interest) must not be more than 40% of your Net Disposable Income.
4. Other Outstanding Loans
Finally, you are only allowed one housing loan at a time. You must fully pay an existing loan before you are eligible to apply for a new loan.
This is only a quick guide, many sites and forums are more instructive. If you want to learn more, check out these guides which contain all the info and qualifications needed to apply for a Pag-IBIG Housing loan: Pagibig Financing.com / Hoppler
Many housing loans exist, but let’s talk about the two most popular ones: Bank Housing Loans, and In-House Financing Schemes.
Bank Housing Loans
These loans are offered by commercial banks such as BDO, Metrobank, PNB, among others. What’s good about bank housing loans is that they offer flexible payment terms which ease the burden of full price payment.
Different conditions and eligibilities apply, such as gross minimum income required, number of years to pay, interest rates, among others. The best strategy is to ask around, compare, and chart the offers of the different banks until you find one that best suits your needs. A loan application that is rejected in one bank, could be approved in another.
However, the best strategy for your loan application not to get rejected is to pre-qualify. Pre-qualifying means that you should fix your credit score and history. Pay your credit card bills on time, do not incur any penalties or late payments, and make sure that your bank info is up to date.
In-House Financing Schemes
With in-house financing, the property developer provides a way for debtor to pay for the property in staggered payments. Unlike banks which require a ton of paperwork, developers are not too strict with their requirements and you can usually get a loan approved easily.
However, the interest rates are higher and the periods to pay are generally shorter. Plus, you don’t really have a choice because you’re stuck with their terms; unlike with bank loans where you can shop around for the best offer. A good strategy would be to avail of in-house financing while in the preselling stage, so that you get the unit at a significant discount.
Philippine Retirement Agency
Good news for foreigners worldwide! There is an option for foreigners to live and retire in the Philippines. The Philippine Retirement Authority (PRA) makes it easy for its foreigner-members to retire and live in the country for as long as they want. They can do so by acquiring an SRRV, or a Special Resident Retiree’s Visa.
They get to enjoy the following benefits as well:
- Travel back and forth to the Philippines as long as they want
- Exempted from securing the Alien Certificate of Registration Immigration Card from the Bureau of Immigration
- Exempted from paying the Travel Tax at the local airports
- Exempted from getting a student’s permit/ Visa for their dependents who want to study locally
There are 4 SRRV options available.
SRRV SMILE - Healthy retirees 35 years old. Visa deposit of $ 20,000
SRRV CLASSIC - Healthy retirees 35 years old/ 35 to 49/ 50 and above. Visa deposit of $ 20,000. Visa deposit of $ 10,000/ $ 50,000 / $ 20,000
SRRV COURTESY - Former Filipinos (35 years old and above), and Foreign Nationals (50 and above) formerly serving as diplomats, ambassadors, staff of international orgs. Visa deposit of $ 1,500
SRRV HUMAN TOUCH - Ailing retirees (35 years old and above). Visa deposit of $ 10,000; monthly pension of at least $ 1,500; health insurance policy
PRC Licensed Brokers
You may think to yourself, why in the world would I need a PRC Licensed Broker? I’m an enterprising guy, I can just sell the property myself and get a hefty commission. Think again. If you read the RESA law or RA 9646, the law actually requires those who act as agents of a real estate transaction (real estate brokers) to be licensed. If not, violators may be asked to pay a fine, jail time, or both! This is actually a sound rule because the broker is not just a seller or mere prospector. He knows the basic laws concerning real estate like the Recto Law and Maceda Law, he has attended 120 hours of PRC accredited trainings and seminars, and he has passed the REB board exam. That way, the real estate industry is regulated.
Investing in real estate in the Philippines requires diligence, perseverance, and decent capital. Aside from studying the pros and cons, you must be goal based and utilize the property so that you get your money’s worth. It may be a difficult journey, however the financial stability it will bring and the character that you will develop along the way will be all worth it in the end.