Real Estate Cebu
1. HIGH POTENTIAL FOR GROWTH IN INCOME – Rentals for residential, Business and Office Space.
2. TANGIBILITY - It is a safe investment (of an asset) because it has actual physical existence, and it is material or substantial compared to insurances and banks.
3. INCREASE PROPERTY VALUE – Guaranteed appreciation every year.
4. CASHFLOW / PASSIVE INCOME – Monthly income through rentals has higher income compared to monthly/yearly interest in banks.
5. PROPERTY BANKING / POWER OF EQUITY – Rental yield is more than bank savings rate. And when property is bought in pre-selling stage (not yet ready for occupancy) with just the 30% of the Total Contract Price, you can already own a property (condo/house and lot), and after 18 mos. - 24 mos. when it is already finish and ready to be occupied you can let someone assume it/sell it to a higher price, knowing the fact that the price of your property appreciated.
6. BEST INVESTMENT – Higher return compare to banks. Even banks invest in Real Estate.
7. LEVERAGE – Can be use as collateral.
8. SHIELD AGAINST INFLATION (BUYING POWER) – High Appreciation every year. (Eg. Money in left in bank with very little interest is 6 – 7% less in buying power because the products and goods have already increased in price)
9. FLEXIBILITY / EXPANDABILITY – You can expand it vertically by adding more storeys or horizontally by adding more rooms. (Eg. Apartments – instead of 1 story, there are more storeys; Condominiums – use as office space )
10. HEDGE vs TAX – Tax paid in structures is depreciating every 5 years of the structure.
11. POWER OF AMORTIZATION – If property is loaned, bill deposited every month is still the same all throughout. This is an advantage especially to rental properties because you can increase the rental and still pay for the same loan cost every year.
12. DIFFERENT LIFESTYLES, LIFE CYCLES, and PERSONAL GOALS – This is a long term investment because you could pass on your properties and it’s benefits to the next generation.
Real Estate, Still the Safest Investment
With the global financial crisis continuing to pose bleak prospects for many countries, Fitch Ratings' stable outlook for the country's economy should give Filipinos some glimmer of hope. Even the World Bank, in its report released in November, said the Philippines has greater chances to weather uncertainties brought by the slowdown, citing fiscal reforms and strict measures undertaken by the government over the past few years.
One of the sectors that stands poised to benefit from the global credit crunch is real estate, with foreign property investors starting to turn away from Europe and looking at other markets like Asia, showing particular interest in countries such as the Philippines. Global property consultants aver that real estate continues to be the best and safest investment especially during times of crisis since over time, these will appreciate in value.
Add to this the fact that the industry is fundamentally sound, with safety nets and conservative lending policies that have limited their exposure to high-risk ventures. Unlike in the US, Philippine property developers usually break ground for a project only when about 60 percent of the units have been pre-sold to avoid the problem of unsold units. Property consultants have disclosed that a lot of foreigners from the UK and the Middle East are showing interest in buying second homes, particularly buy-to-let condo hotel units that offer better returns ranging from eight to 14 percent since investors can derive income by having the unit rented out.
Luxury housing also continues to be a robust market, with demand for high-end properties in Metro Manila and nearby areas still strong. One of these high-end projects is Dubai-based Kingdom Hotel Investments' Raffles Residences. Located in Makati, the project posted a record-high one day sales of over $45 million in July despite the fact that it was still in its pre-construction phase at the time.
While the US financial mess has been in large part driven by the collapse in the housing market, Filipinos will always consider owning a house their priority in life. Perhaps this is why developers are gung-ho about middle and lower-end projects that target the OFW market.