| Photo of a condominium unit courtesy of Highrises.com via SVDerodar
Browsing on a few videos on youtube about the Philippines from decades past brought me to places where, could be ordinary, going home to a property with a spacious living room, bedrooms, kitchen, and even a balcony –what a real functional unit to describe.
But today, in a competitive market, the real property market has changed as to what mere function is all about, and by suggestion, what else matters defines value. Without a doubt, today’s houses, be it a condominium unit or a house structure, are more often used as a financial good rather than to serve a direct use like that of providing shelter. It is simply an investment.
Often, we understand how space and function are fundamentally sufficient yet in a housing structure. To fulfill its good financial purpose is to possess marketing advantages, be it in character or acquired values. The building structure alone is a predictor of value, and so is its location.
A few years ago, while living in Makati, I had tried residing in a condominium (after having lived in a few different others for a couple of years) units for a few months within Makati Central Business District. It is a condo property next to a hotel. Yet, it did not have the amenities you would find in large-scale developments. Comparatively, the surrounding buildings offer more amenities, are priced higher, and have excellent rental yields.
Given all these, It brings me to the subject that a suitable property must possess many qualities beyond function to price higher. It has to provide reasons for added cost in enhancing value to the property, and for the lifestyle experience it offers. Appurtenant parking is a plus. Likewise, high-speed elevators, concierge, and few function rooms add to the desirability of specific properties. Views of certain units can define a distinguishably priced property, making them extraordinary prime.
“Given all these, It brings me to the subject that a suitable property must possess many qualities beyond function to price higher. It has to provide reasons for added cost in enhancing value to the property, and for the lifestyle experience it offers.”
I mean the processes involved in maintaining a property, whether for residential intent or an investment purpose. Understandably, our choices are dependent on our exposure to the market and willingness to get into the game. Desirable properties offer comfort, convenience, and one that has outstanding resale value. Even in the rental market, high preferences favor units that provide more value than just spatial advantages.
As a tenant of a Makati unit, as for me, being a traveling international property specialist then, I didn’t need to be in a luxury property since I had to travel for a few months and then go back to Manila. For practical reasons, it was for me that a particular monthly cost did not tie me down; instead, it translated to savings. As I transition to an investor mindset, my perspectives have changed not that buying has to be exclusively for the luxury class but to be mindful of the added benefits of being in well-maintained buildings, with more amenities and something that is as well within affordability. Some of us are keen on having our first real property investment, not entirely sure if it is a sound investment.
“Depending on your investment parameters, there will also be comparable returns from a given commitment. Again, we may limit our exposure to real property investment depending on pricing and familiarity with available options.”
Similarly, the same is true for many of us when choosing a property investment. We either choose a property that we are familiar with and are willing to take a risk or because of a foreseeable income, that means a cash flow. Developers cater to their particular market share. For example, some would have investments in apartments only to find a different conclusion later; a single unit investment in a high-end property has the same rental income compared to a single mid-market, if not a luxury property in monthly income. Depending on your investment parameters, there will also be comparable returns from a given commitment. Again, we may limit our exposure to real property investment depending on pricing and familiarity with available options.
So, in today’s market, the function can be an overstatement. A sound property goes beyond function. It has to be profitable enough to deserve its value which we can find in its attributes: a building structure to rely on, location, amenities, service, density, and other important considerations.
Affordability draws the line between desirability and need. What becomes affordable for someone is based on financial capabilities. What could be highly desirable is not affordable. A great point to note is that when shopping for properties, make all factors count. The distance can be costly due to high transportation costs getting around any point of day-to-day necessities. Properties in prime locations are an ideal investment. Also, for rental revenues, properties with high occupancy rates indicate good business.
“While spaces in bigger cities are pricier, expect units to be smaller. However, please do not ignore the importance of other factors beyond function that increase its value over time.”
A suitable property is highly subjective when a property investor thinks of ways to maximize gains or the exit strategy to his profit and even a stable yield generation, especially with rental properties. Yet, to end-users, accessibility to points of interest is a crucial factor. Considerations have to be made based on profession, line of work, business, and even household size.
While spaces in bigger cities are pricier, expect units to be smaller. However, please do not ignore the importance of other factors beyond function that increase its value over time. You have heard people talking about their property investment successes. Some are undoubtedly confident that for offering beyond function, say, there was more than just habitable space, their investments yielded income competitively. Residential properties with excellent upkeep say it all.
Now, the understanding is about choices. You could be eyeing for your next property investment. Bear in mind, consistent with the international real estate valuation standards, and it’s not all about function.
(Stevenson’sexperience 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. ThroughPhil House Hunters, 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 firstname.lastname@example.org.)