10 Good Reasons to Invest in Real Estate in the Philippines as an OFW + Tips on how to Get Started | Dubai OFW (2024)

FAQs

Why is it good for OFWs to invest in properties in the Philippines? ›

A growing population suggests that the country is poised for economic growth over the next decade. Investing in the Philippines provides OFWs with an opportunity to diversify their portfolio and capitalize on their potential returns.

The big goal of real estate investing is to increase your cash, otherwise known as building capital. When you sell a property that has risen in value, you'll boost your capital. The key, of course, is to invest in the right properties that will rise in value.

The Philippines is a good place to invest in real estate, especially given how profitable and booming the industry is. Furthermore, real estate investments are a great strategy to increase wealth due to the nation's strong economy and ongoing growth.

Noteworthy advantages of the Philippine investment landscape include free trade zones, including PEZAs, and a large, educated, English-speaking, relatively low-cost Filipino workforce.

The Philippine Real Estate industry is a significant contributor to the Philippine economy and plays a crucial role in the development of the country. The industry is a key driver of economic growth and job creation, as it supports various industries such as construction, finance, and retail.

The benefits of investing in real estate include passive income, stable cash flow, tax advantages, diversification, and leverage. Real estate investment trusts (REITs) offer a way to invest in real estate without having to own, operate, or finance properties.

Why is investing important? Investing is an effective way to put your money to work and potentially build wealth. Smart investing may allow your money to outpace inflation and increase in value. The greater growth potential of investing is primarily due to the power of compounding and the risk-return tradeoff.

Investing your money is one of the best ways to grow your wealth over time. By investing, you can potentially earn higher returns than you would by simply saving money in a bank account. Additionally, investing can help you achieve your financial goals, such as saving for retirement or buying a house.

Foreigners are prohibited from owning land in the Philippines, but can legally own a residence. The Philippine Condominium Act allows foreigners to own condo units, as long as 60% of the building is owned by Filipinos. If you want to buy a house, consider a long-term lease agreement with a Filipino landowner.

Increase in real estate property prices is imminent

According to the Philippine Statistics Authority (PSA), headline inflation in the Philippines climbed from 8.0 percent in November 2022 to 8.1 percent in December 2022, with the housing sector recording a markup of 6.4%.

Which is better buying a house or building Philippines? ›

The advantage of building your home is that you can always compromise certain features to fit your budget. You cannot do the same with a fully completed residential property. Furthermore, any alterations to a house you buy will always entail expenses. For instance, you may initially want a two-story house.

High Vacancy Rates

Unfortunately, there's always the risk of a high vacancy rate in real estate investing. High vacancies are especially risky if you count on rental income to pay for the property's mortgage, insurance, property taxes, maintenance, and the like.

In 2022, the leading foreign investor in the Philippines was Singapore, with investments amounting to approximately 131 billion Philippine pesos.

Between 2016 and 2022, Philippines' Central Bank data showed that firms from China and Hong Kong invested US$1.7 billion in the Philippines, trailing only Japan at US$2.8 billion but ahead of USA (US$1.3 billion), South Korea (US$1.1 billion), and Taiwan (US$580 million).

Poor infrastructure, high power costs, slow broadband connections, regulatory inconsistencies, and corruption are major disincentives to investment. The Philippines' complex, slow, and sometimes corrupt judicial system inhibits the timely and fair resolution of commercial disputes.

According to data from the Philippine Statistics Authority (PSA), the real estate industry in the Philippines accounted for 13.1% of the country's Gross Domestic Product (GDP) in 2019. This figure shows the significant contribution of the industry to the country's economy.

With real estate investments, you own properties such as land, houses, buildings, and resources within, above, and below the land that generates income, as opposed to just residential properties that you acquire for occupancy.

The three most important factors when buying a home are location, location, and location. Too often I hear people talking about making decisions based on the home itself, instead of the location, and that is a mistake.

What is the 10 rule in real estate investing? ›

A good rule is that a 1% increase in interest rates will equal 10% less you are able to borrow but still keep your same monthly payment. It's said that when interest rates climb, every 1% increase in rate will decrease your buying power by 10%. The higher the interest rate, the higher your monthly payment.

Multiply the value of the home by 5%, then divide that number by 12 to get your breakeven point. If the monthly rent on a comparable home is below the breakeven point, it makes financial sense to rent. If the monthly rent is higher than the breakeven point, it makes financial sense to buy.

Despite what some may think, 2023 is still a good year to invest in real estate, thanks to advantages like long-term appreciation, steady rental income, and the opportunity to hedge against inflation. Mortgage rates are expected to decline, but the housing market is likely to remain competitive due to low supply.

There are five investment style factors, including size, value, quality, momentum, and volatility. The other type of factor investing looks at macroeconomic factors such as interest rates, inflation, and credit risk.

Everyone will need a visa to move to the Philippines. If you wish to stay for long-term purposes, you will have to apply for long-term visas. Moreover, a few countries can enter the Philippines visa-free but for a short period. If you want to extend your stay, you must have the necessary visa.

Who can open a bank account in the Philippines? Anyone can open a bank account in the Philippines. In the past, non-residents, including those holding a temporary visitor's visa, couldonly open a foreign currency deposit account, or a peso account funded by foreign currency deposits converted to peso.

Former natural-born Filipinos can own land in the Philippines, subject to limitations prescribed by Philippine Republic Act 8179 (for residence purposes- up to 1000 square meters of urban land or one hectare of rural land) and Batas Pambansa 185 (for business or investment purposes 5000 square meters of urban land or ...

What is the real estate trend in the Philippines 2023? ›

According to the Philippine real estate projection for 2023, there will be a boost in both the value and the number of residential and commercial properties, with annual growth rates of 0.7% and 2%, accordingly.

The short answer is a resounding YES. Remember that inflation is the measure of prices in the entire economy. This means that whatever you buy, expect it to be more expensive than usual. However, real estate properties are some of the best places to put your money during inflation.

This suggests that the Philippine real estate market is resilient and well-positioned to continue to capitalize on the growing demand for housing and investment opportunities. The Philippine economy has been growing rapidly in recent years, with a GDP growth from 2021 to 2022, averaging 6.7%.

A house for Php 1 million is possible if you're going for something minimalist and simple. Yes, it's possible. A lot of overseas Filipino workers document online their journey of building homes under 1 million pesos. The design of your home would determine house construction cost.

Renting provides you with greater freedom. As a renter, you have the freedom to move from house to house and neighborhood to neighborhood after your lease ends. Because of the high expenses connected with purchasing and selling a home, you have less freedom when deciding to move.

According to the data from the Philippine Statistics Authority (PSA), the total cost of construction per square meter in the Philippines is about 10,900.42 for the first quarter of 2021. And for residential construction in a condominium, it sums up to 18,347 pesos per square meter.

Investors must know you, like you, and trust you before they will fund you. And they are looking for what I call the three Cs in a business founder: character, confidence, and coachability.

The most common way to make money in real estate is through appreciation—an increase in the property's value that is realized when you sell. Location, development, and improvements are the primary ways that residential and commercial real estate can appreciate in value.

Buy your own home

It's one of the best ways for you to invest in real estate, offering numerous benefits. The first benefit is building equity in your home from your monthly payments, rather than paying rent which always seems to rise year after year.

How do people get rich investing in real estate? ›

The most popular way is to buy an investment property and slowly build up your portfolio. Generally, there are two primary ways to make money from real estate assets — appreciation, which is an increase in property value over a period of time, and rental income collected by renting out the property to tenants.

Real estate investments tend to have high transactional costs, especially in legal and brokerage fees. The process of acquiring a new property is also very long and tedious with lots of legal formalities. Another disadvantage of property investments is that they are not easy to liquidate.

Real estate is a generally safe option for many first-time investors. Every investment comes with some type of risk, including real estate. Investors have options for reducing their risk by diversifying their portfolio with different types of investments.

The high influx of OFW remittances strengthens the power of the Philippine peso, which in return provides the following benefits: lower costs of imported goods, helping curb the nation's debts and increasing the value of Philippine peso against other currencies.

Our Overseas Filipino Workers (OFW) are our modern day heroes because they contribute to the economic growth of our country through their remittances and most importantly, there personal sacrifice to give their family a comfortable life despite fighting homesickness.

Saudi Arabia is the leading destination of OFWs

About 26.6 percent of the total 1.77 million OFWs worked in Saudi Arabia, followed by United Arab Emirates at 14.6 percent. Other countries in Asia with large number of OFWs include: Kuwait (6.4%), Hongkong (6.3%), Qatar (5.4%), and Singapore (5.3%).

What are the struggles of overseas Filipino workers? ›

Three themes had emerged: Physical and psychological abuse, sexual harassment, and insecurity of financial stability. This paper recommended that the concerned government agencies provide concrete plans for Filipina OFWs in consonance with Republic Act No. 10022.

 Migration boosts the working-age population.  Migrants arrive with skills and contribute to human capital development of receiving countries. Migrants also contribute to technological progress.

In fact, there are a whole host of reasons why people decide to move to another country. Living overseas can offer new opportunities, new lifestyles, new careers and a new direction. It gives you the opportunity to leave your past behind and reinvent yourself. When moving abroad everything is different.

The cost of living in the Philippines in 2023

A single person needs at least $600 average monthly budget to live comfortably, with a family of four needing at least $2,500 average monthly net salary. The monthly cost for rent alone can be as high as $1,000 for a two-bedroom apartment.

What are the living conditions in the Philippines like? The Philippines is a top-rated destination for expatriates. The country has a warm climate, friendly people, welcoming culture, and low living costs make the country an ideal destination for expats.

With over 7500 islands, a warm marine climate, friendly locals, and some of the top-ranked beaches in the world; It's no secret why 8 million tourists visit the Philippines each year. The jaw-dropping natural beauty combined with low prices also makes the Philippines a top expat destination.