⌛ Should I Rent or Own a house in the Philippines?

I think that may be the best way to put it. If you do buy something you should plan on having it for a LONG time. If you think that at some point you may pull up stakes and go somewhere else stick to rentals. I know that, when I finally find that choice property, it will be the last real estate purchase of my life and it's not really for me but for my wife and family.

 

Buy in Manila, rent in the provinces..take ur time

hi. this is my first post. I had trepidations myself buying in the Philippines but i did it in early 2005 in Makati with a Shangri La property. It was an emotional investment since I was making a killing here in the san francisco bay area(I live in berkeley) with my properties and equity on my homes so I bought one in the Philippines not really caring about appreciation of the property. I know and have experienced in Brasil and Argentina that it's hard to sell your property unless you are in a "hot" and "expensive" zone. So i bought right in the heart of Makati. Not having anticipated the housing subprime mess here in the US, I am glad to have unloaded a property late 2005 and bought in Manila. The resultant devaluation of the dollar( i bought at 57p to 1 US) along with appreciation has given my value of my property from 12M to 18M only with appreciation. All in all, i doubled my investment in less than three years. I bought another property in Makati by Greenbelt which has also appreciated 3 million pesos in one year with appreciation and devaluation of US dollar.(labor and materials getting more expensive due to oil prices and materials going also to China and India)

i also want to buy something in dumaguete since my friend said that would be my vibe. I am a university professor at UC berkeley, an artist, traveler of over 50 countries, but totally love the philippines after being born there and not visiting for 25 years since i was 10 except a trip in .94 for a research project related to my dissertation. I really want to open a cafe/resto/bar/internet/art center/pension right there on rizal Ave but dont really know the prices or availability of buildings.. should i rent or buy?

Can any give me advise ..I want to add to the local flavor/urban flavor of dumaguete but need some advise..

I will be there in May to check it out.

 

??

Well first, whos name did you buy the property in Manila in? Your filipino wife? You are not allowed to own land in the Philippines, if you are a foreigner....

 

should i buy or rent?

i only bought condos in makati because I am Filipino American but my mom just sent me my original birth certificate so I am going to apply for a dual citizenship so I can buy some land. I did some internet research on land ownership about how much land I can actually own as a Filipino for residential and business purposes(I forgot the hectares or square meters that was on one website).

I have visited baguio, vigan, sagada, banaue up north. South of manila, I traveled to palawan (PPC and el nido), Cebu, Davao, Bora, Camiguin, CDO, and Camiguin. I am checking out all the vibe in the cities and have a friend who's an ecoactivist visionary in Camiguin who owns and runs the Enigmata tree house and also Kublai Milan, the artist I met in Mindanao famous for his Art boutique hotel and his awesome statues. I spoke to my friend at length at which place I would like, and she suggested Dumaguete because it is a university town. I live and teach at Berkeley and UC berkeley so I am looking for a litlle intellectual/artistic vibe with the beach flavor and small town setting to base my eco art projects.( I did some in Sri Lanka as part of the tsunami relief efforts and also in Camiguin). I know it is not going to be Manila but I can always access it my plane in one hour.

So that what draws me to Dumaguete. It seems like a great place and the beach setting(ocean setting) is more my vibe than the mountain(not much of a recluse as an artist so I dont think I can do the BenCab tam awan village like in Baguio and Puerto Princessa might make go island crazy(a bit small) even with their small art scene like Kamaratukan(didnt spell it right). I didnt spend enough time in Davao to really feel the vibe.

I am not really in it for the money as far as opening my described project in Dumagets but would like to just cover my costs since I will spend time also in the US but would not mind teaching a couple of classes at Silliman University.

So what do u think? Do u think I would like Dumagets? Reading this forum has got me excited but dont want my expectations hyped only to be disappointed so I am keeping an open mind.

 

oh yeah..to answer your question..i bought it under my name since its only condo units. My three other American friends are also planning to buy in Makati since we are all in our 30's and early 40s so we are still in the urban vibe and I don't think they are really into the smaller towns until maybe they settle down. I am not married and neither are my friends but 4/7 friends that have come with me twice this year including myself have Filipina girlfriends.

 

Sorry

Ah, forget the above. Did not read your post properly. Just one comment then, on how much money you have "earned" by appreciation of property values and the peso: You havn`t actually earned anything before you have sold AND changed your money back into USD.

This is a very real issue with property, as you can not always sell it the moment you might like or at the price you thought it was worth. It is not like investing in the stock market, where you can always sell in a second by the click on a mouse, and where the spread between best offer and best bid is perhaps only a few 10´th of a percent at most.

Had you invested in Asian stocks in early 2003, you would have earned a 200% return on your investment in 5 years, measured in USD. Had you invested in late 2005, you would still have earned a 50% return in a little more than 2 years, even after the latest decline in stock prices.

Both these figures are very significantly above the long term returns, that these markets have historically delivered. How much longer this huge asset inflation (property, commodities, stocks) will continue, noone knows.

As you state yourself, it stopped and went into reverse gear in the US property market a few years ago already. Sooner or later the same will happen in other property markets, including the one in the Philippines.

If right now is a good time to buy property in the Philippines or not, noone will know until 10 years from now. The only thing we know is, that property in the Philippines has never been more expensive, than it is right now.

Personally I would never dream of buying property anywhere in the world for "investment". I would only buy property, that I liked to live in myself. I really do think, that you are much better off investing your money in liquid instruments like stocks or bonds.

If you are buying property for borrowed money in the hope to make a profit, then you are really out on the very thin ice.

Best regards, Lars

 

your right. lars..I was thinking of US property where u can sell homes in less than 7 days like in my city during the heydey of real estate. Now u have to wait 3-4 weeks. My city's property prices are only down about 5% because of the San Francisco Bay Area and the university town. You're right, I should have invested in Asian Stocks but me and my friends were all burned by the dot com day trading back in the days when we used to make so much money and lost so much in 2002 so switch to real estate until the runup in 2006 before the housing bubble. I am currently renting my condo in Makati for 150,000p a month since I never spend more than one week in Manila before traveling in other parts of the Philippines. I only went back in 2006 after 1994 going on academic semester breaks so I have been there 4 times since dec 06. Yah, ur right though, PI property is getting expensive but one bedroom condo in San Francisco is about $1M dollars and in my city about 500,000 usd. I think it will only go up because many in the area(other Asian countries and Europe) will still think it is a bargain compared to Seoul, HK, Tokyo, Shanghai, London where my brother lives, etc) which will drive prices up until it hits saturation. My cousin told me about the housing bubble back during the Asian Crisis in the PI but then it went back through the roof. Some of my friends are getting priced out even in Manila as the dollar goes down, and they havent pulled the trigger in buying.

But do u like dumagets? Does it have an intellectual, cultural, artistic life for what it is(let's not compare to San Fran, Manila, or Berlin)..I mean for what it is.... I dont easily get bored so I would probably get involved in some nonprofit work if i stay there..

 

I was looking at a korean condo hotel 4 bed 4 bathroom a lot of imported material, even koreans doing the finishing, overlooking lake taal, 12m pesos real nice, but the price is too high, I said how many units have you sold? she said block (a)is sold out, a bit later after looking at the unit in block (d) I said if I purchased a condo I would prefer the view from block (a) "ohh I think we can get the purchaser of the top floor to change so you can have that one" hmm ha ha. The property downturn is bound to effect prices here, a lot of the money is coming from filipino's returning home, from usa and europe and I would say now is not a good time to buy here, if any time is good is debatable in my opinion, there is not a true real estate market here in western terms, just people putting values on property as in a fishing expedition waiting for the big one with a long nose ha ha

 

I was looking at a korean condo hotel 4 bed 4 bathroom a lot of imported material, even koreans doing the finishing, overlooking lake taal, 12m pesos real nice, but the price is too high, I said how many units have you sold? she said block (a)is sold out, a bit later after looking at the unit in block (d) I said if I purchased a condo I would prefer the view from block (a) "ohh I think we can get the purchaser of the top floor to change so you can have that one" hmm ha ha. The property downturn is bound to effect prices here, a lot of the money is coming from filipino's returning home, from usa and europe and I would say now is not a good time to buy here, if any time is good is debatable in my opinion, there is not a true real estate market here in western terms, just people putting values on property as in a fishing expedition waiting for the big one with a long nose ha ha

 

Life in Dumaguete

Yes of course I like Dumaguete, thats why I have chosen to stay there. There is not a tremendous amount of intellectual, cultural or artistic life in Dumaguete though, to be honest. Dumaguete is more a place to live a relaxed and laid-back life, but still with all modern amenities within easy reach.

Anyway, if you are considering to buy property in Dumaguete, for sure you will want and need to go there first, so you will see for yourself, what it is like.

I would not buy for "investment" in Dumaguete though. I think it can be quite difficult to either sell or rent out property here, and rental rates seems to be very low compared to purchase prices. In general, if one DOES buy property as an investment, focus should always be on rental income, not on expected or hoped for price appreciation. If the investment can generate a large direct return from rental rates, then it is a good one, otherwise it is most likely not.