# Condo in Manila - good invest mid to long term?



## ExpatMRTW (Apr 3, 2016)

Hi there,

I am planning to stay for a year in Manila and thinking to buy a condo as de facto investment.

High level this is the breakdown as far as i understand for now:

1. Rent studio in Makati area for about PHP 20k/m with 1 year lease
or 
2. Buy a similar studio for about PHP 1.5m plus added cost (tax, maintenance, upkeep, etc.)

I might consider paying for the purchase of the condo in cash as the first year of living in there would be going against theoretical amortization (12 x PHP20k I would spent on rent).

Thereafter, I am thinking about renting out the place for the PHP20k/m and fully amortize my purchase price within 6 or 7 years (less overhead cost as the owner of course).

Is that a feasible plan or are there too many culprits for foreigners purchasing a condo and renting that out mid to long term?

Plus in general, is a condo a decent investment given that they are building so many apartment units right now there. I am fearing that there is a huge overhang of apartments in about 5 to 10 years if the BPO train potentially moves to another place (or seize to exit due to artificial intelligence development).

Thanks for any pointers!


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## ezedek (Jan 9, 2016)

You're over spending. I'm paying 15k a month for a nice 4 bedroom house in upper class subdivision with access to swimming pool, etc. Condos in manila area are a rip off and only good if you're working somewhere there in Makati/Greenhill area and need quick access to work.

If you're staying for only a year and just want a basic apartment they can be had for 10k or less a month. That is 120k a year.

Good luck renting an apartment for 20k unless you're targeting foreigners off the plane. There are many houses for rent for 10k going untouched, because renters are hard to find at those rates.

This is risky business and ownership is spotty stuff here in Philippines. When I first arrived, I'd dreamed of buying hectares of land and setting up farming, a mini clinic/hospital, etc etc. I soon recognized how corrupt the system is and how dangerous this would be even if I'm married locally.

If you got cash to burn then buy whatever your heart desire, but my gut tells me that if you were sure about this decision you wouldn't be posting on this forum. Some small voice is saying 'don't do it man'. Listen to this voice and think three times over before buying any property here.


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## ExpatMRTW (Apr 3, 2016)

ezedek said:


> You're over spending. I'm paying 15k a month for a nice 4 bedroom house in upper class subdivision with access to swimming pool, etc. Condos in manila area are a rip off and only good if you're working somewhere there in Makati/Greenhill area and need quick access to work.
> 
> If you're staying for only a year and just want a basic apartment they can be had for 10k or less a month. That is 120k a year.
> 
> ...


Thank you ezedek - that is great input.

Yes, there is a voice on my right shoulder telling me definitely not to do that.

I am thinking about a place close to Makati. Reason for that spot is that I want to also look for local work in the BPO industry as this is my background.

If after 1 year i don't find work, i will move on.

I believe that buying a condo in a high rise is different oppose to buying land (as being a foreigner is not possible).

My motivation is strictly confined in not shelling out P20k per month on a rental for 1 year duration (in that area). The rent to own ratio is very off from my perspective.

But to your point: being a foreigner in Phils has its own set of rules as it appears and those rules.


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## ezedek (Jan 9, 2016)

ExpatMRTW said:


> Thank you ezedek - that is great input.
> 
> Yes, there is a voice on my right shoulder telling me definitely not to do that.
> 
> ...


I don't know what chances you have at getting employment here even in the bpo industry. If it was me, I'd rent an apartment in Quezon city for cheap. I'd spend something like 8000 to 10000 max. Then I'd commute using bus and lrt/mrt or communal van (not taxi or jippney) back and forth to my area of focus / concentration. Communal van is cheaper and better service than the stupid hot taxis they have here. They are pretty decent as long as you're sitting in the back. Getting squeezed in the middle with no leg room can be an issue if you're a big boy.

Once, I have a minimum of a year long-contract locked up then I'd do the calculation as to whether buying vs renting makes sense economically. The way I see it anything else is like getting married after one month of dating in hopes she's the one who will be the perfect mother of your children.


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## Gary D (Oct 28, 2013)

1.2m in Makati, seens very cheap, you won't get more than a small box for that. Anything half decent will be 4-5 million. Somewhere less desirable like Mandaluyon perhaps. The condo market in Manila is massively overhested and resale is very difficult.


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## ExpatMRTW (Apr 3, 2016)

ezedek said:


> I don't know what chances you have at getting employment here even in the bpo industry. If it was me, I'd rent an apartment in Quezon city for cheap. I'd spend something like 8000 to 10000 max. Then I'd commute using bus and lrt/mrt or communal van (not taxi or jippney) back and forth to my area of focus / concentration. Communal van is cheaper and better service than the stupid hot taxis they have here. They are pretty decent as long as you're sitting in the back. Getting squeezed in the middle with no leg room can be an issue if you're a big boy.
> 
> Once, I have a minimum of a year long-contract locked up then I'd do the calculation as to whether buying vs renting makes sense economically. The way I see it anything else is like getting married after one month of dating in hopes she's the one who will be the perfect mother of your children.


Yes, i agree. Employment is not easy hence I will give my self 1 year in Phils (that also includes a lot of fun time though).

I am not a big fan of QC as way too far out but that too would be a possibility.

FX is ok but i am a little too large for those cramped vans. I prefer Uber but that too is not the most economical way to get around.

You nailed with your commitment statement at the end. I am also cautious about getting into something, which i can predict.


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## ExpatMRTW (Apr 3, 2016)

Gary D said:


> 1.2m in Makati, seens very cheap, you won't get more than a small box for that. Anything half decent will be 4-5 million. Somewhere less desirable like Mandaluyon perhaps. The condo market in Manila is massively overhested and resale is very difficult.


Yes, that would be smaller than a tiny box - 25 sqm to be exact, which is smaller than my current bathroom 

This is what I am most cautious about: 

"The condo market in Manila is massively overheated and resale is very difficult"

I am no real estate analyst but i do see each time i am in Manila how many new construction sites are popping up. There has to be a massive overhang of condos very soon (if not already).

The condo i am looking at is at the border of Mandaluyong and Makati - not a prime area but still... 1m+ php is a lot of cash to throw away if worst comes to worst.


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## JRB__NW (Apr 8, 2015)

I have real estate in the US and have considered buying a condo here but decided against it. Too many risks with all the building activity and other issues. The time to buy would have been a few years ago. In my opinion, US property is a more stable investment and I'm protected by laws that are less open to interpretation. So, I rent here, and live in a terrific, secure place that I enjoy. Still a bargain, in my opinion.


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## ExpatMRTW (Apr 3, 2016)

JRB__NW said:


> I have real estate in the US and have considered buying a condo here but decided against it. Too many risks with all the building activity and other issues. The time to buy would have been a few years ago. In my opinion, US property is a more stable investment and I'm protected by laws that are less open to interpretation. So, I rent here, and live in a terrific, secure place that I enjoy. Still a bargain, in my opinion.


Yes, my local coworkers in Phils tell me the same thing - a few years back real estate was reasonable (for local standards) and early adapters made a killing.

Now the housing boom appears saturating the market and i wonder how many units are really needed once all construction sites are done.

I also dont think that Manila will continue to be the BPO hub mid term as too expensive. Many companies are already moving away to take advantage of provincial rates.

So, yes... if appetite for risk is large buying a unit might make sense but its not for the conservative investor. I would need to think three times whether the risk is worth it or not.


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## Asian Spirit (Mar 1, 2010)

ExpatMRTW said:


> Yes, that would be smaller than a tiny box - 25 sqm to be exact, which is smaller than my current bathroom
> 
> This is what I am most cautious about:
> 
> ...


There are already far too many condo high rises in Manila. Most units in these building go unsold and are empty and some are rented out as office space to companies.
My biggest concern with *ANY* high rise building in country is shoddy and unsafe construction. The unsafe construction is covered over with plaster and paint and is just a horrible death trap in the event of a major earthquake that could strike at any time. Not for me, no way, not at any time.


Jet Lag


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## Cebu Citizen (Dec 13, 2013)

ExpatMRTW said:


> Hi there,
> 
> I am planning to stay for a year in Manila and thinking to buy a condo as de facto investment.
> 
> ...




Here is my two cents worth as I am an actual condo owner in Manila. Personally, I think the sales price of your condo in Makati is a bargain...Makati is expensive real estate and 1.5 million is a bargain, (is it a one bedroom?)...my unit was more than twice that amount in Paranaque near the airport but it is a very large unit, (more than 110 square meters and two bedrooms/two bathrooms/two balconies and private parking)!

Plus if you will have a car, you will need to consider parking or always take a taxi every day for a year and DON'T forget all the extra condo association fees due every month, and common area fees, (both electric and water) and security guard fees...these condo units nickel and dime you to death!

I pay an additional 4,000 pesos every month for all the add on crap for the swimming pool, landscaping, security and common areas, etc.

If you can buy a condo unit for 1.5 million pesos and plan on keeping it forever, then you should be alright provided the building is less than five years old. Condo associations are not great about the upkeep on the buildings here. The general consensus for the life of a condo building in Manila is 50 years with good upkeep...less if the building is not properly maintained.

Secondly...do NOT ever consider selling your place...just rent it out for as long as you can because the used condo market is overly saturated with thousands of available condo's and you will play hell trying to get a good price for it...that is a guarantee...

If you do try to sell your unit and you do get a good price for it...you will be very fortunate. Condos are being built here at an alarming rate and the over saturation will only get worse as time goes on!

I personally know of 40 or 50 new condo buildings being built right now around the airport and Mall of Asia complex and more are in the works...that is tens of thousands of new condos coming on the market in the next one or two years. Both Pasay and Paranaque are the site of the new casino area being billed as the *Las Vegas of the Orient*. Dozens of new casinos are currently being built and the condos are popping up everywhere!

So...bottom line, if you want a place to stay for a year with no hassles, then rent a nice place for a fair price and just write off the expenses as a loss...but if you have a deep burning desire to become a landlord and deal with all the renters moving in and out, (whether you have a contract or not...this is the Philippines), then buy a condo. But remember, you are also responsible for the upkeep in order to keep it rented.

Another option to renting out your purchased unit is to use an agency that will deal with all the renters and they will take care of the upkeep of your unit and all the little things that get broken or damaged and send you whatever is left, (if any). It would be very difficult to take care of your condo's maintenance from another country. Water lines, electric issues, an appliance breakage, etc. need to be fixed immediately so you can keep the unit rented.

The other posters are absolutely correct...you might luck out from time to time renting to a foreigner right off the plane but DO NOT expect to get 20k for your unit every month when there are literally hundreds of nice units available for 10k or 12k all over the city...including Makati.

Before I bought my unit, (to live here permanently), I rented a very nice unit near the Mall of Asia...two bedrooms, a big balcony, and private parking for 12,500 per month PLUS the guy, (from the UK), gave me a BIG discount because I did not want to meet him or his wife every month, so I paid him cash in advance for eight months rent and he knocked off 2k every month...so in actuality I only paid 10,500 each month for eight months...and it was fully furnished!

Great location, nice unit and I only paid 10,500 per month! Makati is known for the most terrible traffic in all of Manila and you cant get anywhere fast...like many have said in the above posts, the only ones who will typically rent a Makati condo are the Filipinos who are actually working there and want to avoid the commute or maybe you will get really lucky and find an occasional foreigner to rent it.

While living in this rental unit, I shopped and searched and found my current unit and purchased it and have been living here about 1 and 1/2 years now...


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## ExpatMRTW (Apr 3, 2016)

First of all, thank you very much for your detailed response and feedback. Very very much appreciated.



Cebu Citizen said:


> Here is my two cents worth as I am an actual condo owner in Manila. Personally, I think the sales price of your condo in Makati is a bargain...Makati is expensive real estate and 1.5 million is a bargain, (is it a one bedroom?)...my unit was more than twice that amount in Paranaque near the airport but it is a very large unit, (more than 110 square meters and two bedrooms/two bathrooms/two balconies and private parking)! ...


No, it is a tiny studio at about 25 square meters – and the location is not directly in Makati but at the outer area between Makati and Mandaluyong. A 1 bedroom is about 4-5m P




Cebu Citizen said:


> Plus if you will have a car, you will need to consider parking or always take a taxi every day for a year and DON'T forget all the extra condo association fees due every month, and common area fees, (both electric and water) and security guard fees...these condo units nickel and dime you to death! ...


Not considering a car for now as I am planning on travelling around much more so then staying in Manila.




Cebu Citizen said:


> I pay an additional 4,000 pesos every month for all the add on crap for the swimming pool, landscaping, security and common areas, etc. ...


Good info – considering the purchase price, 4k per month is pretty hefty overhead actually.





Cebu Citizen said:


> If you can buy a condo unit for 1.5 million pesos and plan on keeping it forever, then you should be alright provided the building is less than five years old. Condo associations are not great about the upkeep on the buildings here. The general consensus for the life of a condo building in Manila is 50 years with good upkeep...less if the building is not properly maintained.
> 
> Secondly...do NOT ever consider selling your place...just rent it out for as long as you can because the used condo market is overly saturated with thousands of available condo's and you will play hell trying to get a good price for it...that is a guarantee...
> 
> If you do try to sell your unit and you do get a good price for it...you will be very fortunate. Condos are being built here at an alarming rate and the over saturation will only get worse as time goes on! ...


And that is exactly my worry. I would definitely want to sell the unit mid-term (not long term). 




Cebu Citizen said:


> So...bottom line, if you want a place to stay for a year with no hassles, then rent a nice place for a fair price and just write off the expenses as a loss...but if you have a deep burning desire to become a landlord and deal with all the renters moving in and out, (whether you have a contract or not...this is the Philippines), then buy a condo. But remember, you are also responsible for the upkeep in order to keep it rented. ...


Yes, I might just go with the hassle free approach and rent. Even though I am not sure how ‘hassle-free’ that approach really is being a ‘tourist’ without permanent residency in the Philippines. I personally would not want to rent out my unit to a person who is not a resident.

--- again, thank you very much!


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## hogrider (May 25, 2010)

25sqm is pretty small. Cant imagine living in such a small space for more than a week or so.


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## ExpatMRTW (Apr 3, 2016)

hogrider said:


> 25sqm is pretty small. Cant imagine living in such a small space for more than a week or so.


It's extremely small I totally agree.

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