Q&A: Should I invest in a condotel? - MyProperty.ph (2024)

FAQs

Is it good to invest in a condotel in the Philippines? ›

Investing in condotels in the Philippines, just like other real estate investments, can become a lucrative source of income when done right. It can easily strengthen your financial and investment portfolio with the right research and planning.

While renting can be an affordable option for those who aren't ready to invest in real estate, buying a condo can be a practical and lucrative move that sets you up for future financial success. This is because purchasing a condo allows you to build equity in the home that you wouldn't with renting.

As of the second quarter of 2022, the average selling price per square meter of condominiums in Metro Manila amounted to 225.29 thousand Philippine pesos, reflecting an increase from the previous quarter.

There can be drawbacks to owning a condotel unit. The costs for maintenance and cleaning services may be high. Charges may be based on the square footage of each unit. The owner of the unit may need to take out special insurance for the property.

Ideally, your monthly mortgage should not exceed 30% (if your loan is above PhP 1,250,000) and 35% (if loan is below PhP 1,250,000) of your monthly income. That means, metro-wide, a prospective condo buyer needs to have a salary of at least Php 100,444 to PhP 150,000 per month in order to afford a 60-sqm condo.

In general, condos appreciate in value at a slower rate than single-family homes. The median sales price of a condo was up nearly 10% year-over-year in October 2020, according to a report from Redfin. But the median sales price of single-family homes was up more than 15% in the same timeframe.

For residential properties including condos for rent in the Philippines, the maximum percentage is 20% while the ceiling for commercial and industrial properties is at 50%. In addition to the real property tax, the LGU may levy and collect an annual tax rate of 1% on the assessed value of the property.

Regardless of the community classification, condos offer numerous benefits over detached dwellings. Not only is the purchase price lower, the lifestyle and location are often much better, and you spend less time on maintenance. In many ways, condos are the ideal choice when it comes to retirement living.

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.

How much is condo maintenance fee in Philippines? ›

Cond Dues vary greatly depending on the property or community. The monthly fees range starts between P1,500 to P3,000 pesos that can go up to P5,000 to P55,000 for upscale residential areas. The general and foremost rule is that the more services and amenities there are, the higher the fees.

At its preview sale, about 40 percent of its residential units were reportedly immediately sold, including the penthouse unit called Anadem Villa One. The three-level unit was reportedly sold for Php477 million, and is said to be the highest value primary condo unit sold in the Philippines to date.

Be sure to look for new condominiums for sale in an area near main routes with easy access to public transportation and roads and more than one point of entry. Ensure it has a low crime rate and includes essential amenities such as schools, hospitals, grocery stores, shops, and more.

Condo hotels offer hassle-free vacation home ownership. The on-site management company takes care of all upkeep, maintenance and interaction with renters. Owners of condo hotel units have the right to resell their unit at any time. They keep any profits derived from appreciation.

Risk of Over-Leveraged Capital

A hotel is deemed over-leveraged if debt mounts up, so repayments, interest payments and hotel operating expenses cannot be covered. The more you borrow, the higher your interest rates are likely to be, creating an additional risk of experiencing an investment failure.

Individually-Owned Units

As a result, some people might confuse them with a timeshare, but they're quite different. With a timeshare, you purchase set times that allow the use of that unit. However, unlike a timeshare, if you purchase a condotel unit you own the unit every single day of the year.

The average salary in the Philippines

The average salary in Philippines as of 2020 is PHP 15,200 or USD 308 for the non-agricultural sector.

The monthly rent for a one-bedroom condo in a prime location and with a trusted developer is usually around 25,000 on the average. As long as you've decided on your future home, a plan for your rent-to-own condo in the Philippines will probably be the most affordable property investment for you.

The demand for property prices in the Philippines is hampered. Thus, condominium property prices dropped off. Records have shown that these prices declined due to the Covid-19 impact. Rental yield returns in Manila are good, with them ranging between 3.55% to 7.40%, with a city average of 5.40%.

What adds the most value to a condo? ›

Improvements to the kitchen often yield the highest return for condo owners. The kitchen holds many areas for improvement including cabinets, countertops, sinks, faucets, and lighting. Often considered the heart of the home, the kitchen can make or break the perceived value of a condo.

Recent sales of similar condo units. Active for sale inventory. Other elements that will affect the price, such as the physical condition of the unit, the building amenities/fees, and the location.

What is the capital gains tax rate in the Philippines? According to Section 24D, capital gains from the sale of real estate properties in the Philippines have a capital gains tax of 6 percent, which is based on the gross selling price or current fair market value–whichever one is higher of the two.

Registration Fee – 0.25% of the selling price, or zonal value or fair market value, whichever is higher. Transfer Tax – 0.5% (in the provinces) or 0.75% (in Metro Manila) of the selling price, or zonal value or fair market value, whichever is higher.

In general, the money you earn as a host on Airbnb is considered taxable income which may be subject to different taxes like income tax, VAT or percentage tax. Income tax returns for the Philippines are due on a quarterly and annual basis.

If you have more empty bedrooms than children living at home, you might consider downsizing from a house to a condo. Investing in a condo may not fight off empty nest syndrome, but there are other benefits to downsizing, such as: Less outside maintenance: Say goodbye to shoveling snow and mowing the lawn!

A beachfront condo has the potential to be an excellent long-term investment. Over the course of many years, you could easily earn several times what you paid for your investment. Not only that, but most owners of beachside real estate enjoy the added bonus of having a vacation home for their personal use.

The majority of individuals who move into condominiums do so because they want to save time and money on upkeep. Living in a condominium is much easier than living in a house and lot with a backyard and exterior to maintain. People would like to live in a place where they can always maximize their time.

In the Philippines, hotels generated a revenue of approximately 1.13 billion U.S. dollars in 2021. The Statista Mobility Market Outlook estimates that by 2026 revenue of this segment of the travel & tourism market will increase to roughly 2.1 billion U.S. dollars.

Why hotel chains are investing in the Philippines? ›

The Philippines' hotels and leisure sector offers an opportunity for investors to take advantage of the country's fast-paced growth and get higher yields compared to what's currently being offered by traditional markets. KMC Savills, Inc.

The Philippines Offers an Affordable Entry Cost to Real Estate Compared to Other Nations. Enjoy Passive Income via Rentvestment Opportunities in the Metro. Enables You to Diversify Your Investment Portfolio in a Developing Industry. The Value of Real Estate Provides Long-Term ROI.

1. Henry Sy (Shoe Mart) Shoe Mart, or SM for short, is one of the country's retail behemoths, and far more than just a mall. It is now a well-loved institution of which many Filipino families hold fond memories.

Arena Island Resort is a luxurious resort situated in Narra, Palawan, Philippines. This exclusive island resort offers an ideal escape for travelers seeking an ultimate island paradise experience.

Risk of Over-Leveraged Capital

A hotel is deemed over-leveraged if debt mounts up, so repayments, interest payments and hotel operating expenses cannot be covered. The more you borrow, the higher your interest rates are likely to be, creating an additional risk of experiencing an investment failure.

Foreign ownership limitations in many sectors of the economy constrain investments. Poor infrastructure, high power costs, slow broadband connections, regulatory inconsistencies, and corruption are major disincentives to investment.

In 2022, the leading foreign investor in the Philippines was Singapore, with investments amounting to approximately 131 billion Philippine pesos. That year, the total value of foreign investments in the country amounted to about 242 billion Philippine pesos.

Unlike a timeshare, where buyers pay for limited use of a resort, buyers of a condotel own their residence outright and can stay in it, rent it out, or sell it according to their own wishes.

A condotel is a condo that operates more like a hotel. Individuals own each unit, although the complex shares amenities like lobby registration and a cleaning service. When owners are away from the property, they have the option to make income by renting their condo out for short-term vacation stays.

What is the No 1 investment in Philippines? ›

📈 Long-Term Bonds

These are securities that usually come with a 20 to 30-year term. They can be in the form of corporate bonds, government bonds, and even international bonds. Long-term bonds are considered one of the best investments in the Philippines because of the potentially high-interest yields.

During the COVID-19 pandemic years, the real estate industry has thrived even more. Colliers Global real estate forecast shows that the Philippines' property market will continue to grow in the next five years, with a forecasted annual growth rate of 5.4%.

Cebu. Outside of Metro Manila, Cebu is the country's busiest and most developed metropolitan. Other than a tourist destination, it's home to a slew of industries, too, attracting major investors and professional workers. effectively raising the demand for real estate properties in the area.