1. This site uses cookies. By continuing to use this site, you are agreeing to our use of cookies. Learn More.

buying a condo

Discussion in 'Warnings and Dangers' started by steven, Nov 5, 2015.

  1. steven
    Offline

    steven Active Member

    hi guys
    what are peoples thoughts on buying condos ? are they a safe investment ?
    me and my gf have been looking at some at mplace south triangle ,Quezon City.
    I have read about others that after 50 years they sometimes demolish the tower blocks, but what im concerned of is what is the likely hood of us buying and after 10 years they decide to demolish etc
  2. bigmac
    Offline

    bigmac Well-Known Member Trusted Member

    as i understand it--you--as a foreigner--cannot own property in the filis
  3. steven
    Offline

    steven Active Member

    hi big mac,
    yeah I understand that too, but im on the understanding we can buy a condo as its part of a building
  4. oss
    Offline

    oss Somewhere Staff Member

    A condo is a 50 year lease, you never really own it.

    Bigmac he can own a condo in his name the only reason he can do that is because he does not own the land it is built on, he only owns a box suspended in the air.
    • Like Like x 1
  5. iHeartJa
    Offline

    iHeartJa Member

    Hi Steven, you as a foreigner, can buy a condo. And yes the condo property is only good for 50 years, not really a practical long term investment. However, it is still a property and the value appreciates, know when the building was built, so you can plan when to resell it anytime you wish.
  6. oss
    Offline

    oss Somewhere Staff Member

    The problem with a condo is that they have laws that state that the tower blocks have to be taken down every 50 years, so it is only a lease.

    This was explained to me by my Filipino friend and lawyer some years ago.
    • Like Like x 1
  7. oss
    Offline

    oss Somewhere Staff Member

    The issue for me about a condo is that it only makes sense if you live in it, if you buy as an investment, while it might appreciate in value for a few years eventually the problem is that it is running out of years and you can only sell the remaining time.

    Buy one if you think you will keep it.
  8. Micawber
    Offline

    Micawber Renowned Lifetime Member

    I very nearly bought a condo in Manila (Marikina City)
    Seemed a great place and a great location. Essentially it was a very nice location.
    But....... here's a few things I learned and need to be considered.

    Buying a condo for investment can work well if you follow a well trodden path and understand it's a business.
    Plenty of complexities to understand such as:-

    - Buy only finished condos in a completely finished building or you could find your investment just sitting idle for some years. Be sure all the added facilities are completed.

    - Try to secure only those condos that have an included parking lot and be sure the parking lot is big enough.
    A parking space could easily cost an additional P400k

    - Base the investment on a life cycle of 5 years renting to recoup your initial investment.
    Any new condo projects in the same area mean that your 'old' one may become the poorer neighbour and encounter associated reduced returns.
    Do it right and you could do well. But, IMO, don't consider a condo as a long-term returning investment. Treat it as short-term.

    Understand the maintenance costs and discover which are fixed (ish) for a known time.
    That way you'll know just what your costs are and how much you can charge for rent and how much profit you MIGHT make.

    - Maintenance costs are obligatory, and can change from time to time. Typically seem to be between P3k -P5k but could reach even higher. Get fixed cost for as long as you can.

    - Understand the cost of insurance (which is obligatory). These costs can also change from time to time. Try to get as much fixed as possible.

    - Get a good grip on all potentially attached legal fees. Discover which ones are refundable and/or transferable and which ones are not.


    Further important points that may come up when buying brand new up front:-

    There are often nonrefundable and completely non-transferable deposits required. Means that if you placed a deposit for condo A and you later decide to buy condo B, you'll lose the original deposit forever, from day 1

    Sometimes you find a one time 'contingency fee' or "facility entrance fee". I've no idea what it is but averages out at around P100k

    Often the case again that the condo you'll be buying is in practice a concrete room with a toilet and waste and with one set of hot a cold water pipes. There's likely no rooms (means no internal partiton walls at all.) Those are extra.
    No electrical sockets, no other water or waste in or out. No finishes on the walls or the ceilings. All extras.
    Of course no appliances, no fittings and no furnishings.... all extra

    Ammenities such as pool/gym etc are usually only completed before the last condo is sold

    Condo life can be great for many and I'm not intentionally knocking it. But the costs of maintenance and repairs increases with time. In a condo tower it's no easy task to upgrade electrics, plumbing or even a broken lift.
    To me it's thinking about a lifespan of 50 years is not practical.

    It's been quite some time since I had any active interest in a condo so I could be way out of date of many issues but at least food for thought.

    No offence intended to anyone. Just sharing my personal opinion
    This is the Philippines. Not all that glisters is found to be gold
    • Informative Informative x 3
    • Like Like x 1
  9. steven
    Offline

    steven Active Member

    thanks for info guys,
    wel my gf needs a place to live and when i visit its somewhere we can both stay , thats why we are thinking of buying, and in future possible rent it out if she stays here in uk.
    do they automatically demolish after 50years ? or can they do even sooner?
  10. Bootsonground
    Offline

    Bootsonground Guest

    Wow..Great Info Mcawber!!
    Long time since I looked at Condo`s in Manila but I must say that the Promotions and marketing are very professional along with the glitsy leaflets and B.S..So much so that after a few SMB`s in Mall of Asia one day I did get a little tempted once.. After a strong cup of coffee though I must admit to some more sober thinking..
    Steven.. You see those Pinoys driving Range Rovers in Manila?? They want you to help them get the next model upgrade..
    That said..If you can afford it and you dont trust your other half to have a house and lot in their name (Which is Fair enough given the stupid land laws here)
    Then why not??
    Would I buy one in an excellent location as a financial investment?
    NO...But what do I know though??
    I think the salesmen are the PUMP and DUMP kind..Just a gut feeling I guess but I might be wrong.
  11. oss
    Offline

    oss Somewhere Staff Member

    It is an Earthquake zone so there are no guarantees that anything will be left standing in 50 years :)

    However the lease is drawn up for 50 years so one could expect it to stay up that long.

    As Micawber mentions remember that you will still have monthly costs "association dues" this pays for the security refuse collection and general communal maintenance, when I rented a 27 square metre condo in Malate down near the bay the rent was 11,000 a month and the association dues were 1500, add to that say 2000 for broadband, 4000 for electricity and say 700 for water and it starts getting expensive, that amount was fine 10 years ago when the exchange rate was 100 PHP to the pound but would be getting on for 260 quid a month now.

    Also remember that if you come to rent it out there are not a lot of locals that can afford even 10,000 a month rent plus those kind of additional monthly costs, aircon is essential as these rooms can turn into a furnace also it is worth getting one that is high up as you will get the benefit of better views and more of a cooling effect from any breeze or wind if you leave the bedroom door open.

    For the kind of condo's that are over there now you would be looking at much higher rents in order to make it viable as an investment which further limits the prospective rental market, also if you buy small the foreign renters will be less interested but if you go too large then you will have a limited market of foreign executive types that might rent it.

    For comparison, after three years when my daughter was born we moved out of Malate and down south a few miles, I now rent an entire house for 9000 a month, 2 bedrooms and about 95 sq meters in a nice subdivision.
    Last edited: Nov 6, 2015
    • Like Like x 1
  12. Anon04576
    Offline

    Anon04576 Well-Known Member

    If as Oss says the locals are unlikely to be able to afford such a price you could always Airbnb it as a possible alternative.
  13. oss
    Offline

    oss Somewhere Staff Member

    Oddly enough I think one of the big markets for renting condos is foreign students that come to the Philippines to study, a lot of Korean's do that and tend to have enough money to afford renting smaller condo units, there were a lot of them in our building.

    My lawyer friend who told me about the 50 year rule was at that time earning about 30,000 a month, so you can see the limited scope for the local's, most of those that the means will be trying to buy rather than rent.
  14. Micawber
    Offline

    Micawber Renowned Lifetime Member

    Before relocating here we had the idea to rent a condo short term whilst looking around for a good house in a good location.

    We viewed many. To be honest some of the condo's here in Davao City are just beautiful, with views over the ocean. Way way out of our budget.
    We ended up viewing condo's getting lower and lower in rental. Couldn't find anything that would keep us happy.

    The final one we viewed was a pretty grubby 3rd floor condo in a decent area with 1-bedroom and 1 small living room.
    P20k per month was the asking price.
    Not for us.

    On the positive side, most condo's are in good downtown areas within easy walking distance of pretty much everything you'd need. Including transportation links.

    Our idea of a wonderful condo life didn't meet expectations. We just feel happier and more contented in a detached house with a garden surrounded by peace and green.
    May not be downtown but a P20 jeepney ride or P150 taxi to reach it isn't going to break the bank.

Share This Page