For OFWs considering property investment, the time is now

as published in myproperty.ph

The Philippines is still very much an attractive real estate destination. Its economy remains strong with a GDP of 6.8 percent forecasted for 2018 and 6.9 percent for 2019. This stable growth makes investing in the country a solid option not only for local residents but overseas Filipino workers (OFWs) as well. Vacancies in Metro Manila were reportedly on a decline for the first quarter of 2018. At a vacancy rate of 12.4 percent, it appears that residential condominiums can be a good source of lease income. This is an important detail to know for OFWs who are contemplating investing in real estate.

High investor confidence

The real estate investment bubble does not appear to be bursting anytime soon, if there was one. The market is highly competitive and demand for new developments is quite high despite rising property values. Luxury residential condominiums can command prices of up to Php 400,000 per sqm. On the average, however, projects are selling at Php 167,000 per sqm. This is up from Php 113,000 per sqm based on similar values in major CBDs around Metro Manila six years ago.

Demand is bolstered by a low supply of 12,700 residential units for 2018 and a low vacancy rate. The Manila Bay area, which in large part is situated in Parañaque City, is joining Makati City as among the most favorable locations in the Metro. There is an uptick of companies purchasing residential properties in such locations, as well as in interest coming from Chinese nationals. It has accessible commercial, office, and leisure facilities that appeal to this ever-growing market. OFWs looking to capitalize on this property boom and potential lease income would do well to follow suit.

Points to ponder

However, there are some things they must consider before doing so. They must first determine if the investment is for personal use or for lease purposes. There are a lot of OFWs who are originally from the provinces outside of Metro Manila. Those looking to purchase a residential condominium for lease purposes might want to consider units in or near the NCR region’s main CBDs. This is where on would currently find most of the rental action. Acquiring a condominium in the province is also a good idea because of the potential increase in property values, though lease demand might be different.

Having selected a residential unit, OFWs need to consider how they will be able to maintain it. There are different aspects to renting a property. Prior to leasing, the unit has to be marketed, be viewed by an interested tenant, and have its corresponding lease documents prepared. When it is rented out, someone needs to perform necessary repairs and renovations during and after the contract of lease. There is also the payment of real property taxes, collection of rent, and payment of association dues to take care of.

These tasks could be assigned to a relative assisted by a real estate broker as well as a contractor. On the other hand, it would be more convenient to have a tenancy management firm handle all of these duties. OFWs, by the nature of their work, would not always be present in the country. To be clear, these are just some of the realities that buyers of residential properties intended for income should be aware of. It should not dissuade them from pursuing an investment opportunity, especially if there is one that offers good value for money.