There are tons of things no one tells you about buying a condo for rent in the Philippines these days. From legal considerations to value appreciation, many real estate investing businesses keep their tips under wraps - thus making it harder for new investors like you to get into the local property investment industry.
But at DMCI Homes Leasing, we want to be able to guide you through the challenging yet fulfilling process of purchasing properties today. We wanted to create a guide that would give you upfront advice on how to buy a property for lease the right way, with tips ranging from hidden fees to dealing with tenancy and more.
This is where this list comes in. While buying a unit for the first time can be challenging, the more you know, the easier the process will be. By understanding the lesser-known aspects of buying property to rent, you can explore our wide range of premier condo locations with ease - thus giving you a better chance to find the place of your dreams today.
Uncover top secret tips and be ready for your new home with the help of this comprehensive guide. Check out this list of the top 12 things no one tells you about buying a condo for rent in the Philippines right now.
Photo courtesy of Andrea Davis via Pexels
Understanding condo rental in the Philippines
Condo rental in the Philippines is an excellent way to invest your time, effort, and resources - especially given the current state of the country’s real estate market. From tight-knit condo communities in major cities, to sprawling residences in the provinces, there are a wealth of opportunities available for the newbie investor to flourish in the local real estate market today.
Rental properties are booming amidst the country’s recovery in a post-pandemic landscape. Seeing how the market crashed during the global COVID-19 crisis, property developers are finally making real progress with their development again, promising bright prospects to rebound further over the next few years.
And that’s not all. With more and more real estate locations popping up all over the country, more young professionals are understanding the appeal of rental condos nowadays as well. Given this increased interest in real estate, along with the post-pandemic boom for property developments, it’s no surprise that now is the perfect time to invest in a unit for lease for your financial future.
Think you’re interested enough to invest? Then read on to discover everything you need to know about condo rental in the Philippines right now.
12 things no one tells you about property to rent in the Philippines
Prepare yourself for your upcoming real estate journey with top secret tips straight from the experts. Here are 12 things no one else wants to tell you about property investment in the Philippines right now.
1. Location matters more than you think
One of the first things you need to consider when pursuing property to rent is, of course, location. But this consideration matters more than you may realize, especially when you look at rental demand and property value for future leasing purposes.
Your location's proximity to business districts, shopping malls, schools, hospitals, and other service centers will directly affect your future plans for leasing your unit. Your rental demand may increase or decrease, depending on your distance to these essential locations, and you can actually afford to charge higher or lower based on these factors.
So make sure to pick the perfect condo location that is within your financial means, in case you lease out your place in the future.
2. Calculating ROI
Thinking of putting your place out for lease, or selling it to another interested investor? Then you’ll want to think about the return on investment (ROI) for your unit first before you get it as a long-term financial commitment.
By calculating your ROI, you get to consider factors like rental income, future expenses, and value appreciation over time. Project the amount of money you hope to receive relative to the unit’s overall cost, and you’ll see if it’s worth buying said unit before making any major decisions.
3. Hidden costs and fees
Another thing you need to take into consideration are your fees - but not just the upfront ones you see upon purchase. You need to take a deeper look into your upcoming investment, to ensure you’re unveiling the often overlooked expenses beyond the initial purchasing price.
These sudden costs and fees include things like:
- Condo property taxes;
- Association dues;
- Insurance expenses;
- Future maintenance and repair costs, and many more.
As you pursue this huge financial commitment, you need to ensure that you’re fully capable of financing this decision over the next few years. Don't let sudden or hidden costs and fees trip up your financial planning for the long run.
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4. The impact of market trends
Here’s an important tip: track the impacts of local market trends and economics on your condo choices to ensure success with your Philippine real estate. These trends include factors like supply and demand, inflation, and economic stability. By tracking these, you can predict things like price fluctuations and location popularity for your upcoming unit purchase.
Your investment decisions don’t exist in a bubble - in fact, they’re directly affected by economic actions, local laws, and other nationwide trends. By keeping an eye on the impact of these market trends, you can make moves to ensure the stability of your unit’s price and leasability in the future.
5. Legal considerations
Another thing that’s not often talked about in pursuing a new place is the legal requirement to buy one in the first place. Not considering this can become a pitfall for your investment - hence the necessity to explore all the legal documents needed for buying a new unit today.
Account for legal considerations such as property titles, contracts, loans, and more when it comes to buying a condo for rent. Study certain rental laws and regulations too, to ensure you’re following them properly, like laws on rent control, eviction processes, and tenant rights. Have all your legal documents reviewed by a lawyer as well, to avoid any pitfalls with your future unit.
6. Your options for property management
Not only should you be looking at the new property you want to buy, but you should also be looking at the onsite managers of said condominium development as a major consideration for this financial commitment.
Whether you’re thinking about managing the place on your own, hiring an individual manager, or using a property management company, you need to consider all your options for managing this new unit on a daily basis. Pick the option that works best for you, to ensure that your financial commitment is taken care of and maximized properly.
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7. The tenant screening and management process
As you decide to rent out your home, you need to conduct proper tenant screening to ensure that you’re leasing out your unit to the right people. To lock down the right tenant for your place, make sure to review the prospective tenant’s renting history, criminal records, lifestyle, financial circumstances, and more,
Bad tenants can ruin any rental experience, and can even decrease the value of your investment over time. This is why you need to conduct a thorough screening and management process, to ensure that you can have a good landlord-tenant relationship with your clients in the long run.
8. Dealing with maintenance and repairs
Even if you’re leasing your unit out to a tenant, you’re still responsible for the maintenance of said unit over time. You need to be able to deal with unexpected issues, repairs, and renovations with a properly prepared contingency fund and a condo rental maintenance guide as well.
Routine maintenance will help you preserve the condo’s condition, and staying up to date with condo interior designs will help you improve its value to renters and buyers alike. Until you sell your place to another interested investor, you’re in charge of its maintenance - so make sure to account for this financially and logistically to ensure your property’s long-term usability.
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9. Market saturation and competition
As mentioned in an earlier section, the real estate market in the Philippines is booming. With many opportunities for property investment around the country, there’s also a risk for market saturation and high competition for landlords and sellers alike.
You need to be able to navigate the rental market in order to stand out from the rest of your competitors today. To do so, make sure to study your target market, offer a competitively priced rental, and highlight the unique features of your unit, to make sure it stands out in today’s heavily saturated condo rental market.
10. Envisioning long-term plans
Another important factor that people don’t talk about is the need to envision your long-term plans for your own place. These can include things like holding versus selling, passing your home down to future owners, and more.
What would the stability of your rent look like, should you put your home out for lease for a long time? What would it look like if you turned over or sold your property in five to ten years? Create plans for these decisions, as these could impact your buying process as early as today.
11. Financial planning and risks
Planning out the finances of your upcoming property purchase isn’t just about the money that goes into your investment. It also entails thinking about risk management, portfolio diversification, and your long-term financial goals for your condo.
Are you picking the right building locations based on your averseness to risk? Does your latest purchase help to diversify your investment portfolio? Consider these factors throughout your buying process to ensure you’re picking the perfect place for your professional and financial dreams too.
12. Considering the environment
The last thing that people forget to talk about when it comes to buying a new property is the consideration needed to enact eco-friendly and sustainable condo ownership practices.
Considering the environment is an active choice that you need to make as a prospective buyer. You have to actively pursue eco-friendly lifestyle choices like sourcing energy-efficient appliances, practicing proper condo waste management, and more.
While this consideration is often overlooked, developers like DMCI Homes are making it a norm to enact sustainable development practices for the long run. With this in mind, you can rest assured that you are making an excellent choice for the environment when you choose to buy a unit from DMCI Homes today.
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Affording property investment in the Philippines
As you can tell by now, there are a lot of important things you need to consider when it comes to finding the perfect place for your real estate needs. But one thing often stands out the most among the rest: your ability to afford your investment in the Philippines today.
So in order to find the right place for your needs and financial capabilities, you need to take special note of the following tips when you pursue a property purchase:
- Know your average monthly fees. This ranges from your utilities and association fees, to your real property taxes and processing dues. Knowing and accounting for these monthly costs is a simple way to pursue your purchase properly without missing out on important financial considerations.
- Anticipate typical rental yields. Aside from knowing your monthly expenses, you should also anticipate your yield from rental, should you decide to lease your unit. This will help you account for the ROI of your condo properly as well.
- Know your deal breakers. This is an important aspect of your long-term investment strategy. Determine your deal breakers ahead of time so that you can avoid conflicts like poor condo management or property upkeep, even before you settle on any major financial decisions.
- Be flexible. Sometimes you won’t get the condo of your dreams - and that’s okay. Try being flexible by considering units outside of your initial wishlist, so that you can find affordably priced places while still getting the amenities you need for a well-balanced condo lifestyle.
Even if you don’t get the most perfect version of your dream home, you should still be able to afford one as a long-term investment. So make sure you take these financial considerations to heart as you find the place that best fits your capabilities and needs today.
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Is it a good idea to buy a condo for lease?
At the end of the day, you might still be wondering if it’s a good idea to buy a unit for lease in today’s real estate landscape.
Ultimately, it is your choice to pursue the perfect place for your investment dreams. You already know that buying a condo is a good idea; what remains is your ability to commit to such a long-term investment, based on your current financial capabilities.
So if you’ve done the research and think yourself capable of such a decision, then you should go for it. It’ll be a worthwhile and fulfilling experience - and we can’t wait to support you through it at DMCI Homes Leasing this year.
Photo courtesy of Max Rahubovskiy via Pexels
Key takeaways
Take the first exciting step towards your real estate future with this tell-all list of tips today. Here are some key takeaways for you to keep in mind as you embark on your upcoming property purchase journey:
- Do your research. Given all the considerations you need to note down for your purchase, make sure you do your research to ensure that all your logistical and financial bases are covered properly.
- Consider your finances. Can you support this long-term financial plan on your own? If not, what help do you need to employ to do so? Take your finances into consideration before making a big decision like a home purchase.
- Ask a lot of questions. Don’t be afraid to ask a lot of questions from the experts at DMCI Homes Leasing. We’d love to support you through this tough but fulfilling process - so make sure to get in touch with us today.
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