What is Real Estate?
Real estate is the property consisting of the land and the buildings built on it. It also includes natural resources such as crops, mineral deposits and water, as well as the air rights above the ground and underground rights below the earth. The term real estate means physical property.
There are four categories of real estate:
Residential real estate
It is the category where the property is used for people to live on and cannot be used for commercial or industrial purposes. It includes both newly constructed or resale houses. The most common examples are bungalows, condominiums, co-ops, townhouses, and vacation homes.
Commercial real estate
This type of real estate is used solely for business purposes. These properties are usually repronted out to tenants for that purpose. This category comprises of shopping centers and strip malls, medical and educational buildings, hotels and offices. Apartment buildings, even though they are used for residential purposes, are often considered commercial because they are owned to produce a profit.
Industrial real estate
Industrial real estate includes all land and structures utilized for industrial activities. The buildings can be used for manufacturing, assembly, research, production, storage, and distribution of goods.
Land
It is a real estate without any structures. It can be vacant land (undeveloped, early development or reuse), working farm, ranch or a memorial lots or garden.
Who can invest in Philippine real estate?
It’s not difficult to assess if one should make a real estate investment. The country offers excellent investment opportunities for all kinds of investors, huge or first-timer alike. Success in the world of real estate is not a derivative of having a million-dollar investment. It’s enough that you have some start-up capital on hand as an initial investment.
Getting a license is not required in real estate investment. Philippine real estate brokers have benefitted by having a real estate licensure. However, many people have earned well from buying and reselling properties. The best teacher is experience, but it’s not a requirement. All of those top real estate investors started from being inexperienced. Chances are, with a little bit of luck and a lot of real estate research, you’ll be at the top with them soon.
Where are the best cities to invest in real estate?
Discovering the best location is a huge part of a successful investment in real estate. Philippines has several prime locations and potential hotspots for investment. The property market in the Philippines is expected to achieve double-digit growth this year, with the following places listed below:
Quezon City
The highly urbanized Quezon City is home for about 3 million Filipinos. These entail an abundance of employment prospects, mostly young professionals, as well as recreational centers and wellness hubs. Investing in residential and commercial properties is encouraged.
Makati City
Makati is a place where there are around 60,000 commercial and retail establishments. Here the real estate investments are at a premium. Properties, especially in or around the Central Business District are the best target for any real estate investor.
Numerous multinational firms, such as BPOs and POGOs, have set up their companies in Makati, transforming the city into a financial center. Office spaces here soaked up by these companies, as well as residential units for their employees.
Baguio City
The Philippines ‘ Summer Capital is a top tourist hotspot as well as a busy university town. Whether for travel or study, almost always someone will be searching for a place to reside in Baguio City.
Without sacrificing value, real estate in Baguio City continues to be more affordable. At the same moment, despite ongoing growth, the town is wonderfully peaceful. Also, new ventures regularly appear, generating a growing market for commercial rentals.
Gensan
Officially referred to as General Santos City, it is a 1st class highly urbanized city in the Philippines. It is the shopping capital of the region, where residents from nearby towns and provinces visit the city to do some leisure activities. Its major economic activity is also primarily anchored into two industries: the agricultural and fishing sectors. Commercial and industrial real estate investments are promoted here.
Gensan is also home to Forest Lake. It is a memorial park that has the most interred remains since the 70s. Their investors can be assured that they will be near their departed relatives and loved ones. It is also most accessible by public utility vehicles and private cars. In Gensan’s memorial park industry, there is a big room for investment. Aside from the use of the memorial property for interment purposes, its resale value is significantly higher than other forms of investment in real estate.
When is the best time to invest in real estate?
Philippines real estate investment is long-term and not an easy-money short-term venture. Often, the expectations of the buyer make real estate investments not perform as expected. Investing in real estate is being ready to keep that property for many years after purchase.
Since it takes a long time to get a return of investment, the best time to invest in real estate in the Philippines is as soon as possible. As long as you have sufficient capital and made serious effort to research and study all the aspects, especially financially, that is the time to decide to get an investment. Properties such as a memorial lot, appreciate over time. The value of memorial lots is accelerating to a standard rate of 40% annually, and this rate is much higher for prime and accessible lots such as in Forest Lake, which is situated along the national highway with wider roads leading to the park.
How does real estate in the Philippines fare?
The Philippines enjoys a stable, robust property market. One evidence of this was the global financial crisis of 2008, which hit the U.S. hard but did not severely impact the Philippines. As a result, even if the market for Philippine Online Gaming Operations (POGO) passes its peak, the nation is anticipated to do just fine.
Moreover, real estate demand is booming, thanks to BPO firms, technology firms, and flexible space providers. For this reason, specialists predict that 2019 will be a smooth year full of opportunities for the real estate sector of the country. The real estate market is expected to increase in the coming years in Clark, Cebu, Iloilo, Davao, and other next-wave cities.
How much should be the real estate investment?
Maybe nothing has killed more real estate ambitions in the Philippines’s history than the belief that one doesn’t have enough money to begin.
The most popular concept people have about investing in real estate is that one has to either be wealthy already or focus on saving at least a hundred thousand pesos. You don’t need to be a master of financial literacy to be really successful. It means you don’t have to bring any of your own savings into the agreement, and you’d still get some profit from the property.
Now, there’s no such thing as “no money down” because someone’s cash is going to be invested, the catch is who it’s going to be. In an optimal scenario, what you’d do is do your due diligence on the land you’re interested in, find a bank to get a loan and pay the deposit to the bank and rent out the property.
There is also a specific type of real estate that is very affordable, memorial lots. The better news is that in just 3 to 5 years, there is already a significant ROI.
Why invest in real estate Philippines?
Real estate has been and will always be a growing industry. If you still wonder what you can gain from immovable property. But as a potential investor, below are reasons to help you step out of your comfort zone and make an investment in real estate.
Relatively low risks
Yes, all investments have risks, but it is known that real estate is one of the safest investments. Fluctuating markets do not affect real estate investment. Property value will only increase over time. This gives you financial security, particularly if you also think about investing in stocks or bonds.
Endless returns
Again, there is a relatively consistent real estate market in the Philippines. That suggests the longer you have property here, the more you’re going to benefit from it! This also makes real estate a reliable capital resource for additional investments.
Fixed assets
The investment goes to holdings with a real intrinsic value that has no opportunity of falling randomly to zero overnight, unlike stocks. Instead, the land in which you invest only becomes more critical over time, ensuring that your investments continue to grow. For example, investing in a memorial lot provides security for the family since it is already prepared.
