As more people focus on economic recovery this 2022, many are looking into the smartest forms of investments that can help them to bounce back this year. As always, real estate investment remains among the top options for many investors. According to CNN Philippines, the Philippine property market is poised for a rebound in 2022. This claim is supported by the increasing vaccination rate in the country, as well as improved consumer and business confidence.
If you are a new investor who wants to try real estate investing, you need to explore your options. Real estate investments in the Philippines take on many forms. Along with them are the important facts that will guide you in your undertaking. To help you, here’s a comprehensive guide from CitiGlobal, a trusted real estate developer in the Philippines, that provides an in-depth look at the types of real estate investment in the Philippines.
A Comprehensive Look at the Types of Real Estate Investments in the Philippines
Real estate remains to be an attractive option for investment in the Philippines. However, as with other types of investment, you need to do your research and take note of important facts to be successful in this venture.
Why Invest in Real Estate
- Real estate involves the provision of shelter which is a basic human need.
- Real estate properties are tangible assets that provide immediate satisfaction.
- Unlike stocks that are prone to fluctuations, real estate investment grows in value over time.
- The demand for real estate properties significantly surpassed the supply in today’s market.
- It is anticipated that real estate market activities will recover in line with a rebound in overall economic growth this year.
- Philippine property investment is expecting growth as companies return to full, in-office operations.
Main Types of Real Estate Properties
There are different types of real estate from which investors can grow their money from. These include:
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Residential Properties
These are real estate properties that are specifically zoned for people to live or stay.
Examples: Condotels, townhouses, and houses and lots
CHECK OUT THE FUTURE LOCATIONS OF OUR RESIDENTIAL PROPERTIES HERE.
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Commercial Properties
This type of real estate property is intended for business activities. It may be in the form of buildings that house businesses but it may also refer to land that is used to generate profit.
Examples: Buildings for lease, retail stores, and hotels
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Industrial Properties
These refer to properties that accommodate industrial activities such as the development, manufacture, and production of goods.
Examples: Factories, warehouses, research and development parks
4 Types of Real Estate Investments in the Philippines
Acquiring a real estate property is just the initial step. To make the most of your investment, you should also know how to make your money grow.
Here are the 4 types of real estate investments in the Philippines that you can venture into.
1. Buy and Sell
A real estate property can be turned into a buy-and-sell business. You can look for depreciated properties to buy and later on sell at a higher price. You can sell a property as is at a lower markup or you can have it improved or renovated to sell at a higher price.
SUITED FOR: People with large cash reserves and good money management skills
TIPS:
- Always do the math before renovating a house to avoid overspending
- Find properties that are highly demanded by your target market
- Take note of surrounding developments and opportunities for future growth
ALSO READ: The Better Ultimate Guide to Real Estate Investments in the Philippines
2. Buy and Hold
A traditional form of real estate investing, Buy and Hold involves the purchase of a property and selling it after some years. It is a type of long-term real estate investment where one is after the value that it can accrue after some time.
SUITED FOR: People with excess cash reserves and those who do not have a need for immediate returns.
TIPS:
- Take note of the maintenance fees that you have to pay while keeping the house such as amortization, utilities, and maintenance costs.
- Think of how you can generate income from a property that you are not using. Rent it out or have it leased so you can generate regular income that will make up for its maintenance cost.
3. Rental Properties
Real estate properties located in high traffic areas such as universities and business districts would make ideal rental properties. They can potentially provide you with passive income on a regular basis.
SUITED FOR: People who want to generate passive income.
TIPS:
- Consider the amortization fees that you need to pay when deciding on the rental amount.
- Remember that you will also be responsible for repair and maintenance costs so you should also consider those when setting rental fees.
- Be careful when taking on tenants. Look for IDs and supporting documents that will prove that they are capable of paying the rental fees.
4. Real Estate Investment Trusts (REITs)
REITs present an option to invest in real estate without spending a lot of money. With REITs, you can be the owner of companies or commercial real estate through stocks and you will receive a regular income from your investment.
SUITED FOR: People who can only allocate a small amount for real estate investing and those who have time to monitor their stocks.
TIPS:
- Research REIT companies to know where you should invest.
- Choose best-performing REITs and reputable real estate companies with great properties and tenants.
- Invest only with accredited PSE online brokers.
ALSO READ: REIT Investment in the Philippines: The Facts You Need to Know
Real estate investments in the Philippines present great opportunities especially now that experts have forecasted great improvements in the economy this year. As with other ventures, it comes with benefits and risks so you have to do your research and be careful when taking steps. Practice, industry knowledge, and perseverance will help you reap the rewards of real estate investment.
CitiGlobal offers opportunities for you to make the most of real estate investments in the Philippines. Learn about the company’s master planned communities in Tagaytay and Palawan as well as our future locations by talking with one of our representatives today.