Real estate is one of the safest and most profitable investments one can ever make through careful management and smart strategies. Here and abroad, the Philippines is considered a prime location for real estate investment, thanks to the property market boom in the past few years. Yet, most Filipinos are too risk-averse to take advantage of the high-yield property investment opportunities available to them.
On the other hand, savvy investors diversify their portfolio, including real estate, to maximize their long-term earning potential. If that is your goal, then you need to tap into these six real estate opportunities in the Philippines that most Filipinos miss out on.
Strong Property Market and Economic Growth
The number one missed real estate investment opportunity by Filipinos? Investing in the real estate market sooner.
The Philippines is one of the fastest growing economies in Asia, with an average growth rate of 6.4%, according to the International Monetary Fund. The strong economic growth has boosted the residential property market, as real estate prices have been steadily rising since the early 2000s.
These developments in the economy and real estate industry highlight the fact that now—and not later—is the best time to invest in real estate in the Philippines.
Commercial Condo Space
When it comes to condo investment, the first thing that comes to mind is residential condo ownership. These days, there is a great demand for and supply of residential condos, with affordable mid-range condos as the best-selling properties.
One of the untapped real estate opportunities, however, is the income-earning potential of commercial spaces in condo communities. Condo investment opportunities like convenience stores, laundry shops, water refilling stations, salons, bills payment centers, and other businesses that add comfort and convenience to condo residents make a profitable real estate venture.
Properties in Tourist Hotspots
Among the most overlooked real estate investment opportunities are residential and commercial properties in tourist destinations outside the highly saturated Manila. Two of the most attractive yet untapped locations are Boracay and Davao City.
Despite being a world-famous beach destination, Boracay’s real estate market has yet to reach its peak. The island has so many lucrative investment opportunities to offer to business-minded people. Properties in the island are inexpensive, and they can be converted into resorts, hotels, spas, restaurants, and more. Tourist arrivals in Boracay steadily increase every year, with 2016 reaching its highest ever at 1.7 million. The island is also undergoing developments, primarily the upgrade of the Boracay Airport in Caticlan. (Although the editor personally believes that property ownership in the island of Boracay should be controlled.)
Likewise, Davao City is an ideal real estate investment hotspot because of its low property prices, low cost of living, and infrastructure and developmental projects that are expected to produce high yields for investors. In fact, Davao City is listed as one of the best Southeast Asian cities for property investments.
Short-Term Vacation Rentals
Tourists visiting the Philippines consistently increase, with as many as 5.97 million tourists in 2016, according to World Bank data. Along with numerous tourists comes a huge demand for accommodations. And with the worldwide popularity of Airbnb, an online service that enables people to lease or rent lodging, any condo owner in the Philippines can make good money out of renting out their properties to foreign travelers.
Because of its high rental yield, Airbnb is definitely one of the condo investment opportunities to include in your investment portfolio. By becoming an Airbnb host, you get to earn income from offering your space to foreigners coming to the Philippines either for business or leisure.
Compared to conventional monthly rentals, leasing your property via Airbnb may not guarantee a continuous cash flow, but its returns are higher.
Many Filipino investors are not into foreclosed property investment, and it’s easy to see why. Investing in foreclosures comes with a lot of costs, including home repairs and unpaid utility bills and taxes by the previous owner. And then there’s an emotional aspect to it—buying a foreclosed property is like taking advantage of another person’s misfortune.
However, real estate experts view foreclosures as a practical, value-for-money option for both investment and home ownership. You buy a foreclosed home at a price that’s lower than its actual market value, you live in it, and then you sell it and move to another home.
As long as you’re careful in choosing the property to purchase, foreclosure investments yield high returns because the property’s value increases over time. For investment purposes, it’s best to purchase foreclosed homes outside Manila where key infrastructures are being built. Provinces that are undergoing developments offer better property value appreciation compared to Metro Manila.
Expertise of a Real Estate Agent
One of the most common mistakes Filipinos make is doing things alone just to save money in real estate investing. But to achieve your financial goals, you need to partner with an expert who can help you make smart buying and selling decisions.
Most of the time, real estate investors let their emotions rule rather than logic when deciding on a property to purchase. Thus, you need an independent professional who is not emotionally attached to provide you with a sound advice on whether to pursue a deal or not. A real estate agent is someone you can rely on to alert you of any red flags about the property you’re considering to buy. You also need an agent’s knowledge and expertise so that everything you’re doing is correct and legal.
Real estate investment opportunities abound in the Philippines. Take advantage of them while the timing is right to diversify your portfolio, minimize your risks, and maximize your profits.
Have you tapped any of the real estate opportunities listed above? How was your experience investing in them? Share your thoughts by leaving a comment below.
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