How Are You Going To Approach A Condo Investment In The Philippines?

Ready for Occupancy Condominium unit

True, there are advantages and disadvantages to purchasing a condo in the Philippines, but the advantages outweigh the disadvantages, especially in the aftermath of the coronavirus crisis. To allay your fears about the risks associated with condo ownership, the following are some tips on how to approach this investment and where to go from here:

1. Attempt To Acquire Assets At A Discount To Replacement Cost

As an investor, you must factor in the cost of land acquisition as well as the cost of construction. Is purchasing a condo a wise investment given the amount of budgeting required? Yes, but only if you budget properly. This entails properly pricing rents, which should not be reduced due to the increased costs associated with developing additional buildings.

2. Look For Leases With Longer Lock-In Periods

Condo investment in the Philippines can be easier if you look for properties with longer lock-in periods. Condominiums where tenants have already invested in the fit-outs bind them to the property and thus have lower vacancy projections.

3. Consider Signing Leases With Annual Escalations Of 5%

You must exercise caution in your real estate endeavors. Leases typically include a 15% annual escalation every three years, which can be intimidating to prospective tenants. Rather than that, require them to sign leases with annual escalations of 5% to make the transition more gradual and manageable for both parties.

Suggested Read: Housing Loan Eligibility & Approval Guide in the Philippines

4. Conduct A Search For Multinational Tenants Of The Highest Caliber

A tenant should be trustworthy in the same way that the developer in whom you are investing is trustworthy. Even the way banks remind us to be safe and secure with our real estate investments has changed as a result of COVID-19. Grade A tenants will view rental costs as a small percentage of total revenues and will thus view them as assets rather than as another cost center.

5. Purchase Only Leased Assets That Have Been Fully Repaid

The greatest risk is investing in a rogue developer or worrying about finding a new tenant. Purchase only completed lease assets to eliminate these leasing and development risks.

Now that you’re considering investing in a condo, are you sure it’s a good investment? Definitely. There are even prime real estate investment locations throughout the Philippines. It would be extremely beneficial for you to plan for the next stage of your life and to flesh out your safety and security through long-term investments.

https://www.camella.com.ph/are-condo-in-the-philippines-worth-to-buy-after-covid-19/