Condominium as investment?

[BeerhandBop]

it could be a good investment naman. what people fail to realize is that they won't get even 1/8th of what you see in the model units. and that all they get is a piece of white box with a window.

that's that.

anyway, you have to spend atleast 300,000 to turn the condo into a livable/ rentable position. that is 300,000 cash that most of the condo buyers do not HAVE, lalo na yung mga naghuhulog lang na employees.


pero, let's say you paid for the condo in cash, and did some basic upgrades.. and a 2 bedroom condo... will set you back maybe 7.5 Milliion.

you can rent it for 30,000/ month. rent it for 5 years (60 months)

that is 1.8Million. repaint/ renovate/ update the place for a few hundred thousand, you can then turn around and rent the place for 35,000 for the next 5 years again. that's 2.1 Million.

so.. in 10 years, you got 3.90M for something that costed you 8 million.

now... you then spend a few hundred thousand to re update nd everything.. and then put the condo up for sale for 5.5 million.

in 10 years, you got 9.4 million from your total invest of about 8.2 million.

that's 1.2 million in 10 years. that's more money you can earn than if you leave it in the bank. and all you need is to worry about the place every 5 years or so. and i used 5 years as a conservative amount.

multiply that by 2 if you have the money to spare. and that's 2.4 M.

you have to realize a few things, however.

1.) your income cannot rely off the condo's rental. it's merely extra money that you have on the side that you want to grow. and nothing more.

2.) you have to sell the condo at less than 'market value'. and you have to realize that condos depreciate in value. If you just want to buy a condo, leave it as is, and then sell it again in a few year's time. e talagang LUGI ka.

3.) as i previously said, YOU CANNOT RELY OFF IT AS AN INCOME. otherwise, you will be running in the negatives if you do. talagang kulang ang kikitain mo. and mauubos lang ang pera mo and you'd be forced to sell at a loss.

so you did all that work for nothing, and at the end, lugi ka pa.

[BeerhandBop]

edit: the best investment is LAND, obviously. with a good location.

pero same as what i said above, you cant just rely off it as your main source of income.

[taga-BUKID]

it could be a good investment naman. what people fail to realize is that they won't get even 1/8th of what you see in the model units. and that all they get is a piece of white box with a window.

that's that.

anyway, you have to spend atleast 300,000 to turn the condo into a livable/ rentable position. that is 300,000 cash that most of the condo buyers do not HAVE, lalo na yung mga naghuhulog lang na employees.


pero, let's say you paid for the condo in cash, and did some basic upgrades.. and a 2 bedroom condo... will set you back maybe 7.5 Milliion.

you can rent it for 30,000/ month. rent it for 5 years (60 months)

that is 1.8Million. repaint/ renovate/ update the place for a few hundred thousand, you can then turn around and rent the place for 35,000 for the next 5 years again. that's 2.1 Million.

so.. in 10 years, you got 3.90M for something that costed you 8 million.

now... you then spend a few hundred thousand to re update nd everything.. and then put the condo up for sale for 5.5 million.

in 10 years, you got 9.4 million from your total invest of about 8.2 million.

that's 1.2 million in 10 years. that's more money you can earn than if you leave it in the bank. and all you need is to worry about the place every 5 years or so. and i used 5 years as a conservative amount.

multiply that by 2 if you have the money to spare. and that's 2.4 M.

you have to realize a few things, however.

1.) your income cannot rely off the condo's rental. it's merely extra money that you have on the side that you want to grow. and nothing more.

2.) you have to sell the condo at less than 'market value'. and you have to realize that condos depreciate in value. If you just want to buy a condo, leave it as is, and then sell it again in a few year's time. e talagang LUGI ka.

3.) as i previously said, YOU CANNOT RELY OFF IT AS AN INCOME. otherwise, you will be running in the negatives if you do. talagang kulang ang kikitain mo. and mauubos lang ang pera mo and you'd be forced to sell at a loss.

so you did all that work for nothing, and at the end, lugi ka pa.

if this is your forecast of the earnings of a 7.5M cash in 10 years, no one would really be convince to go for a condo investment.

and 1.2M in ten years????? please don't think that the only bank product available is a savings account, of course for a 7.5 M, long term investment, no wise man will invest that on a savings deposit alone.

there are tier 2 capital of banks that can reach to as much as 8.5%, or opt for Government Bonds, and T-Bills.

is this a reverse psych analysis?

[BeerhandBop]

firstly, my computations are based on CONSERVATIVE NUMBERS. while yours are based on Best case scenario numbers. right then and there, you're not being fair with your comparissons.

secondly, if you're thinking of things like mutual funds... well.. we know how mutual funds have gave losses to everyone these past few months.

and if you wanna go with thinks like stocks and bonds, well, not everybody has the time to look at numbers every 10 minutes, diba? we have work to do. as i have said, it's just an on the side income. earning more than if it's just sitting in the banks.

and again, my numbers are conservative. dahil taht's the way i like to look at things.

[taga-BUKID]

firstly, my computations are based on CONSERVATIVE NUMBERS. while yours are based on Best case scenario numbers. right then and there, you're not being fair with your comparissons.

secondly, if you're thinking of things like mutual funds... well.. we know how mutual funds have gave losses to everyone these past few months.

and if you wanna go with thinks like stocks and bonds, well, not everybody has the time to look at numbers every 10 minutes, diba? we have work to do. as i have said, it's just an on the side income. earning more than if it's just sitting in the banks.

and again, my numbers are conservative. dahil taht's the way i like to look at things.

CTDs and tier 2 investment in banks is not an active investment but a passive one.

you can enjoy rates to as much as 8.5% or more by not doing anything, just place an amount, and wait for the interest, that's what i mean, i never mentioned MF, but if you want to talk about MFs, its not a short term game but of long term, say 5 to 10 years (same as your projection with the condo unit), and the current meltdown is part of the cycle, stocks go up and down, you just have to be wiser to invest at the right time, and MFs are not designed for the short term, if its going down, let it be, you may take advantage of it by doing cost averaging, to compensate your earlier losses, and increase your shares.

if you were conservative, then its your call, but if i were to choose, id rather go for CTDs, it is way more higher than your projection of 1.2M profit in 10 years for a 7.5M investment, its way way low.

i know there are a lot of people here who knows the game of real estate, and i know they will also believe that your projections were low, ultra-conservative.

just my two cents.

[BeerhandBop]

8% per annum? what is this? fantasy world?

anyway, to each his own naman talaga.

[jeannybaby]

is buying a condominium (in the phils, either in manila/makati/ or near provinces) a good investment? (maybe a studio or 1 type room)

would the rental be enough to cover the monthly payment?

i had been thinking of buying a property in the phils (a condo would be better i think) But I do not knw if this would be wise investment.

which builder? (ayala, globeasiatique etc...)

A condo would be a good investment but there are so many factors to consider on which type of condo would be a good investment?

If you want to a good return for resale or rental of a condo, I suggest Makati.

But these are two different things. For a good resale value, based from my observation, it is better to acquire a 2 Bedroom in Makati. If you have money to put aside and forget for awhile, put this money in a pre-selling condo instead of a bank. Especially if this pre-selling condo is developed by Ayala Land. For sure the pre-selling property appreciates in value every year so that when it's completed, you can have a good reasale value. It will be completed on time because Ayala never delays. Try to find those newly launched projects! You'll have a good 30-40% return upon completion date, this rate has been proven for Ayala projects. For example, The Columns Ayala 2 BR was selling for 4.5M when it was newly launched, now their 2 BRs are selling for like 6.3 to 7.5M.

Anyway why a 2 Bedroom? It's because there is such a LOT of supply of Studios and 1 Bedrooms compared to a 2 Bedroom. I have a client looking for a 2 Bedroom at a good condominium in Makati, and I can only find a few! People who acquire 2 Bedrooms rarely sell their units compared to Studios and 1 Bedrooms. So less supply of 2 bedrooms, more demand.

If you plan to rent it out however, without thinking of living in it, I suggest you find an office space in Makati; that is if we happen to find one for sale now. The demand of office spaces in Makati greatly exceeds the supply. Don't I know it. Pretty much all the office buildings in Makati Business District are fully occupied in every unit! You can rent it out faster than a residential unit for sure.

Another option is get one of those small affordable studios (i.e. Avida Towers Makati West, or Avida San Lorenzo) that you can rent out for 15k or less; easier to rent out because they're easily more affordable compared to the other owners charging 25k to 45k a month for a studio/1br. You have a wide market here with all the call center agents, and other young professionals working in the business district.

Anyway these are merely based from my observations as a real estate broker. If you have any more questions or need help finding a property, I'd be glad to help you out. There are many things to consider when finding a property. You can email me at jean@nuevolifestyle.com.


~jean azucena~
www.rentproperties.blogspot.com

[Hulk]

tier 2 investment in banks is not an active investment but a passive one.

Actually there is a trading market for Bank Tier 2's, you just have to find it. I just bought the latest PNB issue at 9.5% from a motivated seller.

[taga-BUKID]

8% per annum? what is this? fantasy world?

anyway, to each his own naman talaga.

hmmm, ***** nga ndi ka resourceful kaya *** kang alam sa mga offers ng banks, 8% is not a fantasy, especially if were talking 5M up. Even some BONDS are issued with a rate higher than 8%, it is lower than the risk free rate, which is the sovereign bonds.

[clawed_out]

I don't encourage getting one for investment specially if the location is not booming or is marketed as to be booming soon.

You need to pay HOAs for maintenance. You don't actually own a land, as one poster candidly say.

It's good to own one if you have a small family. If you live within two blocks of your work/school. It's good if you're single and don't want room mates but can afford the mortgage and HOAs.

[BeerhandBop]

yah 8% per annum for 90 days.

please, no bank will give that high of a return nowadays GUARANTEED..

Come back to me when your 5,000,000 does indeed come back to you as 5.4Million after 1 calendar year.

[KuyaDanny]

If you have money to put aside and forget for awhile, put this money in a pre-selling condo instead of a bank.

If you really want to go bargain hunting, I think you should look for pre-sold units whose buyers are backing out of their contracts because they cannot afford to pay the installments. You might be able to negotiate a good discount.

[nuss]

Here is a speculation. In two years, real estate prices would fall. Would that include condos?

At 8.5% pa, conservative pa nga yan for mutual funds. And as said, mutual funds work for the long term at hindi kelangan bantayan araw-araw.

May 8.5% sa bangko, but you need millions before they offer you that. Para ka na ring naginvest sa condo.

[taga-BUKID]

yah 8% per annum for 90 days.

please, no bank will give that high of a return nowadays GUARANTEED..

Come back to me when your 5,000,000 does indeed come back to you as 5.4Million after 1 calendar year.

have you heard of a term called "roll over"

there is no such thing as 100% guaranteed investment, even a risk free rate government bond, insured by the sovereign still has risk in it, although lesser, one example of a loss sovereign bond is the sovereign bond issued by iraq, under sadam hussein. also, iceland is declaring a sovereign bancruptcy as well.

i dont need to flaunt my gains to you, to prove my self. if your that conservative, yes, you will not lose, but im sure if you'll win, you'll just break even.

im not saying that your assumptions are wrong, anyways, that is why it is called assumptions/forecast for it has not happen yet, but im speaking of facts for other investment which is better than your 1.2M profit from a 7.5M capital in 10 years time, which is only 1.6% per annum, even basic TD's from banks can beat that.

just my two cents.

[aspiringentrepr]

It would be good if you buy a condo which can provide you continuous cash flow from tenants.

[atuk]

If you really want to go bargain hunting, I think you should look for pre-sold units whose buyers are backing out of their contracts because they cannot afford to pay the installments. You might be able to negotiate a good discount.

this is true, because of the ridiculously unfair backout policy penned by ernesto maceda, which favored the seller, any buyer will just take any offer.

[BeerhandBop]

Ya knows, pinoys have to stop looking at condos as 'omg! you have a condo! you're living the rich life' This also includes anything made by the big developers like ayala, really.


They're MASS PRODUCED HOUSINGS and nothing more. there are far better deals to be had especially from small/ independent developers. they're not only cheaper, but they only sell them when it's ready for selling. you see what you get.

[pointguard06]

is there a mass produced housing near makati mandaluyong which i can rent out at 10k a month?

1.3M is the budget

[raphmercado]

is buying a condominium (in the phils, either in manila/makati/ or near provinces) a good investment? (maybe a studio or 1 type room)

would the rental be enough to cover the monthly payment?

i had been thinking of buying a property in the phils (a condo would be better i think) But I do not knw if this would be wise investment.

which builder? (ayala, globeasiatique etc...)

I just want to share my opinion to the thread starter...

I always check the CCR of a business or of an investment before I make the call. If the Cash on Cash Return is slow, I won't invest. If it's 50% up, I will. I don't like to see my money sleep.

These days, 4-7M pre-sold condo unit will be worth 30-50thou/mo upon rental. It's CCR will range from 5% to 15%. It simply means that your profit will start after 10 years or so.
If you're satisfied with 5-15% profit, then I'm happy for you.

[BeerhandBop]

"4-7M pre-sold condo unit will be worth 30-50thou/mo upon rental"


30k is MAYBE. 50k, is definite impossibility.