3 Easy Steps to Buy Real Estate in The Philippines
How to Buy Real Estate in The Philippines?
Real estate in the Philippines as a business has lately been gaining more popularity with several companies developing in the industry. Those are settled down mainly in some vital parts of the country, especially the financial district close to the capital, the well-known "Makati Sector" rated as the most expensive.
Likely, the other non-urban regions, notably the various provinces, and suburbs adjacent to the big and main cities in The Philippines are evolving similarly. Such as Cebu, Quezon City, and other important cities scattered along the peninsula that is confronting in parallel, a continuous increment in population demography.
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In Metro Manila, the old city still surrounds the new district - The Philippines’ biggest city and Capital, Photo by www.worldatlas.com |
Is Real Estate a Good Investment in The Philippines?
It's no secret that real estate is a good investment. But is it also a good investment in the Philippines? Real estate is a hot topic of discussion in the Philippines. Some people believe that it is a good investment, while others are not so sure. In this blog post, we'll take a look at the evidence to find out. We'll explore the pros and cons of real estate investing in the Philippines.
Besides, the economical state of the Philippines has dramatically improved during the past few years and still growing but with confidential steps and a promising future as many international economics experts approve: “The Philippine economy is projected to be the 5th largest in Asia and 16th biggest in the world by 2050,” says Will Martin for the businessinsider.com magazine.
Is it worth investing in real estate in the Philippines?
It is more than normal for the real estate industry in the Philipines to witness the biggest economical progress ever thought in its history. It is by far the golden age of a promising era where investors can make big money profits if they invest in the right fields.
Thus, the first step to succeeding in real estate is to buy at the right price; Otherwise, if you deal with a price too high, you will face all sorts of troubles in the next steps. But still, we need step Zero if we can say, to find the right and the truthful broker in this risky business, where you can expect all kinds of ups and downs to occur.
Although the easiest and most popular method to find realtors in the real estate business is by searching for them on the Internet or social media networks, also you can find them while visiting some local exhibitions organized particularly for foreigners looking for this kind of business. This is the right event for the leading companies in real estate development to expose and promote their latest projects and outlooks concerning the industry in the country in general.
Furthermore, based on my personal experience in buying real estate in the Philippines, back in the year 2012, it is their big pleasure to guide you through the most sophisticated deals for buying condominiums or other properties available in the market and to help you resell it in the future if you needed to.
Besides, the Philippines’ online real estate marketers promote their items which include their properties’ listings and brokerages to international search engines such as Google or other specialized real estate websites and blogs. This makes their coverage wider and reaches more audiences, increasing the possibility of getting more closed deals in less time.
On the opposite side, if someone plans to sell real estate property in the Philippines, they will be glad to help as well. They will be looking after potential buyers and take on their own mission of clearing up every initial policy and clause of the offer.
For people who want to buy real estate property in the Philippines, online marketers also provide a complete real estate listing that comes from other brokers in different regions of the country.
Because of the difficulty to search through the available list of properties for sale, some marketers have developed a related application to filter out the options with more accuracy, such as by their budget, preferred location, and even their size. Once a selection has been made, the buyers submit the form online. Then the online marketer will contact the broker of the selected property for a detailed negotiation concerning the real estate package, and so on.
With the online marketing trend in place, the real estate sector in the Philippines is expected to register more profits in the next years.
But how to find the right real estate property to buy?
In the world of real estate and properties, you can make money when you invest in the right place; For instance, you have to buy properties at a convenient price so you can quickly resell them at a higher price, and make a profit.
Buying at the right price allows you always to resell the property immediately and with a worth right into your pocket. You don't have to wait for the approval. You can sell it minutes after you purchase it. But if you buy it too high, your profits will be naturally reduced. Besides, you won't have the flexibility to offer lower prices or better terms; You might end up being pressed to sell and maybe even taking a loss…
- So, how do you find properties at an affordable price?
- How do you know it is the right price?
- And if you do find one, what to do then?
Step 2. Analyzing the Data you get
Therefore, if we can pay him cash and close the amount in 2 weeks, what is the final price that we can negotiate about? According to what was said earlier, it is 2.5M. But when we pushed him, he went down to Php 2M but later he called back to say that it was his final price: Php 2.5M. We wouldn’t press him more since the margin was good already…
MAO = (RV * Cost Factor) - Repairs - Expenses - Profit
The Cost Factor that our seller will use ranges from 70% - 100% depending on the market conditions and your buyers' list. If you have a sure buyer for the property, use 100%. If you don't have a buyer but since the area is engaging, use 90%. If you don't have a buyer and the market is down, then use 70% or below.
Using our seller property as an example, we will have the following:
MAO = (4,000,000*0.8) – 0.00 – (15% 2,500,000) – 200,000
MAO = Php 2,625,000
The asking or demanding price (which is initially Php2.5M by the seller) is below the resulting MAO (Php 2.65M) so this means we can accept the asking price and still make a profit of Php 0.125M.
- The art and skill of successful negotiation by John Ilich
Here, are some other good examples of how to conduct a successful discussion with any kind of seller:
- Always ask for the lowest price they can offer. As mentioned in step 2, here is the exact scenario to follow again. Assume that you’re facing your fellow and negotiating with him with the following deal: “If I can pay all cash (or fresh money-cash) and close the whole amount in 2 weeks, what is the LOWEST price you are willing to offer?” That has been said, you don't have to change any of the wording. Use it as it is, word by word: Those are proven scripts to mimic as a parrot!
- Is that the best you can do? This is the question you must ask immediately after you get his first demanding price. If it is close to the MAO (discussed above), go to the next step and inspect the property. During the inspection, point out all the defects found in the location, such as neighborhood and property itself, etc…
- Have your purchase contract ready for modification – You can always ask for an exclusive option-to-purchase real estate which is a legally binding contract that allows you as a prospective buyer to agree with the seller, in which you are given the exclusive option to purchase the property for an extended and limited time and a specific price.
Disclaimer
References
- eng.wikipedia.org
- businessinsider.com