Investing in Executive flats??

[milesaway1113]

Dear All,

I was in the Philippines for the first time over Christmas visiting my wife's family. On the Manila leg of our trip, while in the Mall of Asia, we were bombarded with leaflets advertising executive flats situated in various locations around Manila.

I wanted to find out if anybody has invested in these flats? Or if anybody has any objective opinions on whether or not such an investment would be sound?

My instincts are not to touch them with a barge pole. But I have done a tiny bit of research online, and a lot of what I have read seems to indicate that the Filipino economy is on the up and that these flats represent a relatively safe investment with an excellent potential return.

Me (I am originally from Britain) and my family are currently living and working in Brunei, which is a stones throw away from the Philippines, and my wife has a pool of very reliable and educated family members, so I feel we would be in a good position to manage these properties.

Any advice would be greatly appreciated,

Many thanks

Asa

[tiger31]

keep to your instincts and you,ll be fine.Its not easy to make money here in real estate its even harder to sell property here also. The sharks are swimming round and round just waiting for ya

[milesaway1113]

So definitely not worth a shot?? Is it easy to get good tenants in for properties such as these??

Thanks very much for the heads up...

Asa

[Terpe]

...My instincts are not to touch them with a barge pole. But I have done a tiny bit of research online, and a lot of what I have read seems to indicate that the Filipino economy is on the up and that these flats represent a relatively safe investment with an excellent potential return...

Based on the experiences of our friends buying condo's for investment can work well if you follow a well trodden path.
Plenty of complexities to understand such as:-

- maintenance costs. These costs are obligatory, and can change from time to time.
Typically seem to be between P3k -P4k but could reach P6k or more.
Get fixed cost for as long as you can.

- Buy only finished condos in a completely finished building or you could find your investment just sitting idle for some years.
Be sure all the added facilities are completed.

- Understand the cost of insurance (which is obligatory). These costs can also change from time to time. Try to get as much fixed as possible.

- Try to secure only those condos that have an included parking lot and be sure the parking lot is big enough.

- Fully understand and accept all those attached legal fees. Discover which ones are refundable and/or transferable and which ones are not.

There's a lot of stuff to consider in order that you fully understand all the one-off costs as well as the ongoing costs of your investment.
Then and only then you really know what are your potential returns MIGHT be.

IMO condos have a 'life cycle' .......most folks suggest 5 years max to recoup your initial investment.
Don't forget that any new condo projects in the same area mean that your 'old' one may become the poorer neighbour and associated reduced returns.

Sorry if all this sounds negative, it's not intended that way....just 'food for thought' on those apects that might impact your investment.

Do it right and you could do well. But IMO don't consider a condo as a long-term returning investment. Treat it as short-term.

In the Philippines not all that glisters turns out to be gold.

Just my personal opinion. Not advice.
Research, research, research

[Dedworth]

These development schemes make me laugh - if they were that good the punters would be queuing up to sign on the dotted line and they wouldn't tout them around shopping malls, London Barrio Fiestas etc

[jake]

IMO condos have a 'life cycle' .......most folks suggest 5 years max to recoup your initial investment

If you are lucky.

The problem i see with flats/condo's is that after 30 to 50 years the building will probably have deteriorated beyond repair. What do you then own?

Buying a house or some land is a much better option, as future generations of your family can still reap the benefits. Land bought in the right area can be a very good investment.

[raynaputi]

If you are lucky.

The problem i see with flats/condo's is that after 30 to 50 years the building will probably have deteriorated beyond repair. What do you then own

Buying a house or some land is a much better option, as future generations of your family can still reap the benefits. Land bought in the right area can be a very good investment.

That's one of the reason why I never bought a condo while I was still working in Manila (my uncle kept on telling me that time that it's a good investment). Instead, I opted to buy a house in Cavite, where my sister and her family lives now. My mum also bought 2 houses and lots there where the rest of the family live, and my sister bought her own. My sister's house is what we are renting out.

[tiger31]

Buying property here can be a minefield. I came across a Belgian guy in Cebu who bought an upmarket house on a sub division for 6 million pesos in cash. Anyway after a few years he decided to sell and move on, but he still has no title for the house and therefore can,t sell the house. He has been requesting the title since he moved in and still nothing.

But it gets worse - to his horror he has discovered other house owners on the sub division have not received their titles either and since found out the whole land deal was a scam. He was so incensed that he put his ordeal on youtube to warn others. I forgot how to post youtube link anyway if you type in DON,T BUY AT PACIFIC GRAND VILLAS that should take you to the video

[London_Manila]

Too many pitfalls over there and that includes finding a lawyer who you could trust
You could part with large sums of money and later find out you actually own nothing
These new developments seem to be springing up all over Manila so with time anything you buy is going to be considered old = top paying renters want the latest properties

I would also point out that the more wealth you accrue over there usually means eventually someone will work out that you are better off dead and out of the way seeing that everything you own reverts to your wife when you are out of the way = Happens more than most would like to admit

Keep it simple and protect yourself = buy nothing and keep your money in the bank

[tiger31]

well i,m building a 2 storey extension onto the side of my bungalow and my builder has told me not to engage a building inspector unless I want to pay 60,000 pesos and be subject to lots of visits .he said once you have built it then get the permit because there is not a lot that can be done once you have built it .The thing I like here is that you can build more or less what you want on your own land without planning permission ,once you engage city hall then a barage of fees follow in most cases .If things were to get to hot then I would just jump on a plane back to blighty lol.only buy or build here if your are prepared to write off your money is my advice as it takes a long time and lots of fees to sell a house here unless its in the low end of the market .The only reason I bought this little house was because it was very cheap and if I lose it all then so what i,ve still got my house in the u.k to fall back on .

[fred]

well i,m building a 2 storey extension onto the side of my bungalow and my builder has told me not to engage a building inspector unless I want to pay 60,000 pesos and be subject to lots of visits .he said once you have built it then get the permit because there is not a lot that can be done once you have built it .The thing I like here is that you can build more or less what you want on your own land without planning permission ,once you engage city hall then a barage of fees follow in most cases .If things were to get to hot then I would just jump on a plane back to blighty lol.only buy or build here if your are prepared to write off your money is my advice as it takes a long time and lots of fees to sell a house here unless its in the low end of the market .The only reason I bought this little house was because it was very cheap and if I lose it all then so what i,ve still got my house in the u.k to fall back on .

Be careful tiger.. There are some pretty hefty fines here for doing that..
Our building permit cost around 6k.. The drawing 20k.
Its just not worth not having one IMO..
I have no idea what your worker is talking about?? 60 k??? To do what exactly?

[tiger31]

Be careful tiger.. There are some pretty hefty fines here for doing that..
Our building permit cost around 6k.. The drawing 20k.
Its just not worth not having one IMO..
I have no idea what your worker is talking about?? 60 k??? To do what exactly?

he just said it will cost around 60k to have building inspectors around etc etc but I will look into it further and get second opinion

[milesaway1113]

Dear All,

Would just like to say thanks to everyone for taking the time out to offer your advice. I think I will continue to research the pros and cons of this type of investment.

I have to admit that the advice that: if you were to successfully invest in the Philippines you could be in grave danger-was slightly disturbing to put it mildly!! Is this really the case?? I do appreciate the advice, but surely this outcome is incredibly unlikely??

I might have looked to invest in other parts of South East Asia, but because my wife is from the Philippines, it makes such an investment much more straightforward from a legal perspective.

I am also curious about investment in new condos depreciating in value in the long term?? There is no evidence of this happening in a European context, where in order to make money you have to be in it for the very long term, but I realise that this is a completely different context. Are these condos incredibly badly built?? I know its a cliche, but surely location is everything, if you can find apartments in the bay area of Manila, within easy striking distance of the airport, I would have thought that they could be a clever long term investment? But I could be completely wrong.

We originally came out to Asia to work with the idea of investing our hard earned money back in the UK. But having been out here for nearly a year, I'm honestly not sure if we want to go back. And it seems to me that there is the potential for good money to be made in the South East Asian property market. But, this is pure speculation.

Thanks again for all your expertise-it has been invaluable.But, I am keen to keep this conversation alive, to gain a fuller picture of the pros and cons of investing in the Filipino property market.

Thanks again

Asa

[tiger31]

Many foreigners have come here got married built huge houses or businesses and got bumped off by the spouses family. Now, i,m not saying your wife would do that to you. It is just another example what can go wrong here if you have money to splash about. You tend to attract the bad people wanting to get their hands on it - if not through murder - by other underhand dealings. You may be lucky and live through your retirement and enjoy the fruits of your investment - which hopefully you will!

There is so much red tape here when starting a business and very restrictive in what they will let you do. You might think i,m scaremongering, but i,ve only been here nearly 4 years now and some of the stuff I have read is shocking. You need a lot of money to make any money here and even then its very risky depending what you invest in. I wish you well in whatever path you take.

[milesaway1113]

Thanks very much for your advice, although I may never see my wife's family in the same light again. But in all seriousness - genuinely appreciate your help.

[tiger31]

Thanks very much for your advice, although I may never see my wife's family in the same light again. But in all seriousness - genuinely appreciate your help.

lol

[chrisincebu]

The condo i live in (renting) within Cebu city is over 10 years old and the first high rise in the city. Occasionally one of the 2 lifts is down for repair. The fitness room equipment is either tired of misuse or broken. The pool is still ok though. But generally the place looks a bit tired. Something to think about while perusing those glossy brochures promoting luxury.

The Aussie landlord i have, completely refurbished the original unit in which we stay and told me of the really bad wiring and plumbing. From what he's told me of his other investments, the common sense has improved in the design of the modern condos but they are still built as cheaply as possible.

Prices for new condos are getting higher but it's whether or not they can be resold, and will they hold the value after 20-30years post build completion? I don't know the original price of the one i lived in but i'm guessing it is higher than the original upon construction. When i did approach a few real estate agents a few years ago about buying, they all preferred to direct me to future developments rather than complete ones. I guess they get commission on the former, but it shows that reselling your condo may be difficult via these agents especially when there are dozens of brand new condos are being built over the Manila and Cebu skyline. I can reason with them though. Why buy a condo which is a few years old, when you can have a brand new one decorated to your own liking. Building of new condo's won't stop for a long time yet.....so i doubt the selling culture of agents will be changing anytime soon.

Renting a condo rather than living in one is a viable option but you'll have to make effort in making your unit better and affordable than the hundreds of other landlords out there.

There is a Marco Polo suites development up the road from us in Cebu city, and there was a Hilton development over on Mactan island a few years back. I suspect these developments have a reputation so probably hold onto the value more than others. They of course come with a extremely high price tag to begin with.

Good luck with the decisions .....buying land off a local i suspect has more pitfalls than buying a condo from a huge well known condo building corporation (providing it is built already).