Becoming the landlord

by Steve Van Derodar

Photo source | Steve Van Derodar

It’s never unthinkable that at one point you can be a landlord, that is, if you choose to be one. Beyond primary residential intents, investing in properties will always be something you can rely upon for an income. It’s always a progressive thought to have a passive income by renting out a few of your properties.

Talking of the same, in 2004, I was introduced to a development, where I learned many investors rent out their condominium properties. While my Philippine property orientation, in general, is into new developments, I was still surprised that indeed, many of them rent out their condominium units to maximize the profits of their investment.

In my earlier years as an International Property Specialist, I immediately learned about the booming market especially in the high-end market in Metro Manila. Rental yields at 8-10% are always a key interest for Investors who would-be landlords and are drawn to the income the property makes.

“The fascinating business of rental business can be really rewarding and as a landlord, the world is your oyster. The risks in investment are always there but one could find his wealth by being the landlord.”

Interestingly, I have had a mix of investors in Europe, North America, and Asia over the years. Particularly in the US, some of them are lawyers, doctors, nurses, and even entrepreneurs. I have had investors also who are Philippine-based yet, they rent properties as an investment. Though some of the foreign-based clients buy for end-use, the ease of property management convinces them to enroll their units for leasing, which in turn makes rental income remitted to the property owner’s account automatically.

The fascinating business of rental business can be really rewarding and as a landlord, the world is your oyster. The risks in investment are always there but one could find his wealth by being the landlord. Even absentee owners/landlords can be represented by a leasing agent or broker. Many of them understand what’s the investment value of the property and the kind of developers to build their portfolio into for their investment.

Condo living in a well-appointed location with high security attracts foreign tenants and even Filipino professionals and entrepreneurs. In luxury properties in Makati Central Business District (CBD), a Php 150,000 – Php 200,000 for a 3 bedroom is not unusual, dependent on floor areas offered. Likewise, for standard, non-luxury buildings, a property rental of Php15,000 to 25,000 for a studio, Php 30,000-Php 50,000 for 1 bedroom in any building in Makati CBD is common.

“Rental properties are indeed a great asset-building where you could make an income from rentals alone. When you become the landlord, it’s an example of how your money can work for you.”

The rental property market is very steady in Metro Manila with key drivers such as increased interest from foreign companies (that need housing for their employees), Chinese investors, and increased purchasing power among locals, and increasingly more remittance of money from overseas. From a source, Manila property prices have increased over the years, with a year-on-year price increase of 10.4% in 2017 alone for 3-bedroom condominium units.

Rental is a true business that you can adhere to the conduct of business. It helps pay mortgages and adds up to over-all income minus expenses.

Rental properties are indeed a great asset-building where you could make an income from rentals alone. When you become the landlord, it’s an example of how your money can work for you.

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(Stevenson’s experience in Philippine Real Estate spans more than 15 years. He has been involved in horizontal, vertical, vacation, and commercial properties. He has worked as an International Property Specialist to markets in Asia, Europe, and North America with Ayala Land, Federal Land, and Century Properties. Through PhilHouseHunters, he offers real estate investment opportunities, marketing, and consultancy with a key focus on Metro Manila and Mega Cebu areas. Visit www.philhousehunters.com. Email at derodarsales@gmail.com.)

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