6 Ways You Can Invest in Real Estate in the Philippines
According to Colliers' report on the Philippine property market outlook for 2022, the Philippine property market is “Bound for rebound” in 2022 thanks to the improving vaccination rate complemented by rising consumer and business confidence.
Whether you’re a newbie investor or an investor looking to diversify your portfolio, that’s your cue to invest in real estate. To jump-start your journey to real estate investing, we’ve rounded up 6 ways you can start investing in real estate in the Philippines in 2022.
Do you plan to retire in a charming house by the beach? Hit two birds with one stone and buy your dream beach house now and, while you’re still working in the city, pay for it with the income you get from renting it out to tourists. Not only are you working on your retirement plan but you’re also investing in real estate at the same time.
Now that travel restrictions are easing up, thousands of tourists have been travelling to tropical destinations in the Philippines like Boracay, Palawan Cebu, etc. Manila Bulletin recently reported that The World Travel and Tourism Council “forecasted an average annual growth rate of 6.7 percent over the next 10 years for the country’s tourism industry, exceeding the expected 5.6 percent overall average growth rate for the Philippine economy.” DOT confirms this with their own forecast that 2 to 5 million foreign tourists will travel to the Philippines in 2022.
Take advantage of the resurgence of tourism in the Philippines and invest in a beach house that will also be your home address in the future.
Buying industrial property may seem daunting but there is a growing demand for warehouses in the market due to the rapid rise of the eCommerce and logistics industry. Warehouses can be used as a storage, sorting, or shipping facility that online shopping platforms and SMEs need to run their business.
To end users, buying a warehouse may not seem like an ideal investment but intuitive investors like Ayala land, the Villar group, Double Dragon, and Anchor Land have been making big moves on real estate logistics investments and maybe you should follow suit.
Now that we’re slowly transitioning to F2F classes, you’re going to want to look into residential property situated near schools or big universities like UP, Ateneo, DLSU, and UST. You’re never going to run out of tenants if your target market is students. When one moves out, another comes in the next semester.
The key to an investment like this is understanding the needs of your target market and the location of your property. For example, when choosing between condos within the area of their university the primary concern of college students is proximity but the rent might be the deciding factor between one condo over another. Carefully research your target market to determine the most ideal property investment that checks all their boxes.
Empower local businesses by renting out a commercial unit. If you invest in commercial real estate you can enjoy better leasing rates, longer lease contracts, and great potential for capital appreciation compared to residential real estate.
If you have a large or a low-rise commercial property you may even consider leasing office spaces considering that a lot of companies are returning to the office.
If you want to invest in real estate but you don’t have the funds to pay for a 20% down payment on a piece of property or have the time to manage and maintain property you can opt to buy the shares of a REIT instead! A REIT or a real estate investment trust is a corporation that earns recurring income from properties they own and manage. REITs are listed on the Philippine Stock Exchange through an initial public offering (IPO). Meaning, public investors can buy its shares in the stock market. Investors own a portion of a REIT’s real estate assets so the more income a REIT earns the more its investors get paid with stock, property, or cash dividends.
REITs are highly liquid and are professionally managed by independent fund managers who are experts in investment strategies. These factors make investing in REITs attractive to conservative investors.
Earlier in our blog, we introduced our readers to Hotel 101, a low-risk and low-effort real estate investment opportunity where investors own a condominium operated as a hotel. Investors get full ownership of their unit, 30% gross room revenue equally distributed to all Hotel 101 investors every 16th day of the succeeding month (regardless if their unit was used or not), and the premium management services of Hotel of Asia Management Corp.
To learn more about Hotel 101, you can read our blog post all about it here: Be A Certified Hotelier And Invest In Your Hotel Room!
When it comes to investing, whether it’s in real estate or other types of investment like stocks or bonds, your decisions must be influenced and inspired by your financial goals. Your investments should always support and work towards your financial freedom.
