Manila is the perfect place for a condominium investment. Manila and the rest of the Philippines are expanding very rapidly economically, even outpacing China. Manila is virtually safe and Filipinos are generally friendly, warm and hospitable, and can speak English quite well. Most things from food to clothes and places to stay are inexpensive when compared to other cities in the US, Europe or even Asia. Here are some tips for foreigners and locals alike who are planning to invest in a condominium unit in Metro Manila.
The Condominium Act
Now whether a foreigner’s reason for buying is to move to a better residence, to invest, to go into business, or just to have a base whenever he comes to the Philippines, a condominium is a good choice. But there are condominium laws that must be understood by foreigners planning to buy a condo in the Manila area. In the Philippines, it’s called Condominium Act of the Philippines. In the Condominium Act, non-natives are allowed to buy condos in the Philippines. Condominiums do not cost as much as a house on a lot and the costs of maintenance are quite a bit less. However, keep in mind that when you buy a condominium in the Philippines, by virtue of the Condominium Act, you cannot pass it on to your kids as an inheritance. If you plan to stay in the Philippines for good, renting out a condominium unit might be a good alternative as there are numerous ongoing condominium construction projects all over Metro Manila, and in most cities and even in the provinces all over the Philippines.
How much is a Condominium Unit in the Philippines?
Buying a condo is like buying a lot. That is the general rule even in other countries. The rule is this: condominium units located in prime areas sell at a much higher price than those in other areas. In the Makati, a unit can cost up to 26 Million pesos per unit with 3 bedrooms. In the University Belt, on the other hand, you can buy a condo at around 5 Million pesos per unit. Cost of living varies from place to place, although it’s generally lower than in Singapore or Sydney or Tokyo. In prime locations, the cost of living is much higher.
To take advantage of lower condominium prices, a prospective buyer might want to check out Pre-selling Condominiums. Some investors do this, and as the condominium building’s construction is nearing completion, the price increases and then they re-sell the unit at a profit. When buying for investment, the best tip is therefore timing. Some investors buy in an area rumored to be the future location of a mall, or an airport, or a park because when such developments do occur, the price of their units shoot up like a rocket into the sky and they make good profit from it. It’s the same with those who buy to have the unit rented out. For instance, when by research, the businessman realizes that the students of a particular school like UST are in need of units that they can rent out, a condominium investor buys near it.
Location is important but dependent upon the purpose of the purchase. A “perfect” location in Makati may not be perfect to a student who wants to buy a condominium near his school along Taft Avenue. But as an investment, condominiums in Manila are usually located in places that will help them sell and will have interested buyers. Location does not also dictate price. Several condominiums within the same vicinity may not necessarily sell the same. Some will be more expensive because of the amenities that they carry, the company that built them, the architect who designed them, the management and maintenance, the condominium’s trendiness, and yes the breathability, airiness and comfort that you get from them – for instance, the DMCI Condominiums.
SM Residences offer basic amenities and are mostly located near an SM Mall making supermarket buying and mall shopping easier. It’s like having everything you need a short walk away. In addition, the Residences are equipped with huge swimming pools and gyms and promenades, although parking at SM Residences is difficult – you need to buy the parking space separately. When buying a condominium, be aware of the seller’s maintenance policies. There are still those condominium units that do not maintain the building well after it has been fully sold. It is best to join a homeowners’ association to tell the developers what you have in mind regarding the unit that they sold to you. One thing to expect from condos – the costs of maintenance and security are not cheap. So make sure that before you buy the unit, all information regarding these recurring fees should be well studied.
For those who buy to have the unit rented out, there are brokers and agents who will find you a long-term lessee. The general rule is – you pay them 1/12 of the total rental fee for a year. Or you can have your unit advertised as a hotel and get people to rent them out. However, before sub-letting it out, make sure that the owner allows this.
Now another thing to consider is this – is the developer of the condominium building reliable. There are cramped prime property units in Mandaluyong and even in Makati developed by a well-known developer. The owners of the units aren’t too happy as there is a lack of ventilation or because the plumbing is awful, or that the units weren’t designed to fully use available space. When you get hold of that developer’s name, be aware when looking for a unit to buy.
Many developers promise to make the unit livable within an allotted time period. There are times, however, when those deadlines aren’t met. Some will swap a completed unit for your unit just to give you a place to stay while awaiting the completion of construction. Be sure that before a unit is delivered to you, that you have checked the plumbing, as well as the walls, ceilings and columns for possible structural defects. Remember that not all elegant-looking units are structurally reliable. When a unit is declared structurally unsound, the Engineering department of City hall can forbid occupancy.