Due to the increased competition and scarcity of current physical resources, many households are considering investing in invaluable properties. Individuals with more substantial financial backgrounds tend to allocate resources through money in the expectation and probable likelihood of garnering more income or profit. Nowadays, investment is commonly achieved through a business, investing in assets, purchasing real estate to book a place for future residence, or selling it at a higher price depending on the land of property value. The principal mission of investing is expecting profitable returns through monitoring value or price enrichment with statistical significance.
However, the profit or end value rate depends on the spectrum of assets in which a person invests. The natural state is the new concept dominating the idea of investment. It has noticeably produced many wealthy individuals; therefore, it is considered a sound investment method. Before stepping into the world of real estate, it is essential to understand and be acquainted with the foundation before jumping into real estate investment. Understand the principal obligations, with the pros and cons, and analyze the return. Potential real estate investors also need to calculate operating expenses and consider the unexpected and on-schedule cost of construction or purchase of the property.
Can Foreigners Buy Property in the Philippines?
Yes, foreigners can buy property but can not own land in the Philippines; if you want to buy a house or any residence in the Philippines, you can buy a property through a corporation where 60% or more by Filipino citizens, or you can make a long-term lease agreement as an individual with the Filipino landowner.
The archipelagic country of the Philippines is situated in South East Asia. It is located in the western Pacific Ocean and has about 7640 islands. It is a geographically diverse country offering the most beautiful beaches and, ideally, tourist spaces that attract countless tourists worldwide. It is considered a relatively reasonable country even by South Asian standards. Regarding tourism, the Department of Trade and Industry claims that it has significantly increased by 8.3% to 7.1 million visitors in 2018. Aside from the fact that the Philippines is a tourist-friendly country, individuals are attracted to the Philippines because of its massive expatriate community. Foreigners enjoy the meager cost of living and invite themselves to enjoy a beautiful and diverse culture with scenic natural beauty just for the locals.
As for now, foreigners in the Philippines enjoy exclusive amenities and facilities that provide them with a comfortable environment. This is mainly true for those who want to book a valuable property in the country and want to spend post-retirement life overseas. The average cost of living for foreigners residing in the Philippines is $1500 per month. This cost incorporates essential grocery items, entertainment, recreational activities, housing or rent costs, and healthcare issues. Among these parameters, the rent or mortgage of the house comprises a significant portion of the entire budget. Most foreigners believe in renting a suitable condo or home in the country; however, some real estate experts suggest purchasing property is more appreciated and practical, especially for staying longer. If the aim is to live in the country briefly and enjoy the culture, renting is feasible and cost-effective; otherwise, it is not. Regarding the debate of purchasing land or property in the Philippines, foreigners are generally not allowed to buy land; however, they have a legal obligation and freedom to buy property and reside in the country as an ex-pat.
Is buying a condo a good investment in the Philippines?
Buying a condo unit in the Philippines is a good investment idea because of low costs, high rental yields, and strong appreciation potential in the Philippine real estate industry.
By condominium policy in the Philippines, foreigners are restricted to owning land (you can buy a property through a corporation owned by 60% or more Filipino citizens, or you can make a long-term lease agreement as an individual with the Filipino landowner).
Land ownership in the Philippines
Foreigners in the Philippines are not allowed and authorized to purchase land. It is highly regulated and only directed to Philippine citizens and residents. A corporation with most Filipino citizens is directly eligible to buy land. The anti-dummy law directs and strictly regulates foreigners to avoid land ownership. However, ex-pats and foreigners can purchase condos, villas, apartments, and industrial and commercial buildings without noticeable land ownership. However, foreigners can buy any building under the following regulations.
- If the property is purchased before 1935, ex-pats may inherit any building or property under legal airship or succession.
- If the foreigners obtain less than 40% of our current condominium project
- If Filipino citizens are married to foreigners and are natural-born citizens of the country
They can also ensure long-term leases on the land with restrictions and rights of use.
The cost of living, affordability, and cost-effectiveness depends on the location, urbanization, availability of facilities, business districts, downtown, and other parameters. Regardless, foreigners can communicate with local real estate agents and purchase, sell, or rent the ideal villa or apartment, depending on their needs, lifestyle, budget, and overall preferences. Real estate agents have the complete know-how and insight about local properties; therefore, they can guide the necessary legal requirements, potential market share, and future value of the property on the market trends. They are also known to negotiate and make contracts through paperwork. Therefore, hiring a reliable real estate agent will significantly reduce the probability of fraud and scams an ex-pat may face in a foreign country.
Foreigners can purchase condos, houses, and property through corporations. However, analyzing and reviewing the locations that offer excellent quality lifestyles and state-of-the-art facilities for foreigners is essential. Owners of condos, houses, or any other apartment should be legally obliged to pay for the maintenance, work, or repairs, pay the mortgage fee, perform home checkups and inspections, and invest in the monthly upkeep of the unit. Foreigners can also participate in long-term leases with property owners under the Investor’s Lease Act of the Philippines. There are a lot of variables and options for expatriates to choose from. It depends on individual preferences as you can purchase a single-story, double attached story, villa, and multi-story property. However, review the house’s safety standards, which include the resale value, quality of materials used, and the property’s durability in times of natural disasters and calamities.
Can Americans own property in the Philippines?
Americans can buy property but can not own land in the Philippines. They can buy a house or any residence in the Philippines through a corporation with 60% or more Filipino citizens or make a long-term lease agreement as individuals with the Filipino landowner.
Ways to conduct financial transactions.
Foreigners planning to reside permanently in the Philippines will require the necessary budget and resources to purchase property in a foreign country. Even if this is not the case, acquiring loans from credible institutions has become more accessible. First, visit a bank or a brokerage firm that acknowledges the needs of an individual. Based on the eligibility review, bank administration can gift and provide a loan along with terms and conditions that need to be fulfilled. Hiring a qualified broker can assist in delivering and recording the necessary documentation with loan applications. The BDO bank facilitates the experts by giving mortgages under the categories of visas. The Metro Bank and BPI Bank also provide bank loans with available visas and mortgage loans to those married to Filipino citizens.
Purchasing property in the Philippines is considered an excellent pathway for future investment. Financially, emotionally, and culturally, purchasing and investing in properties in the Philippines will also prove to be extremely worthwhile soon and allow you to visit the stunning geography and natural beauty the country has to offer.
After leaving Wells Fargo Bank in 2014, Daniel began a career as a finance consultant, advising companies and individuals on economic policy, labor relations, and financial management.
At Promtfinance.com, Daniel writes about personal finance topics, value estimation, budgeting strategies, retirement planning, and portfolio diversification.
Read more on Daniel Smith's biography page.
Contact Daniel: daniel@promtfinance.com