GOT idle residential property in the city? Read up.
Renting out property has become a thriving business in the Philippines, especially in prime cities, according to Global Property Guide, a website for international investors who want to buy houses or apartments in other countries.
In its recent research, the real estate portal found that the Philippines has the highest rental yield in Asia, with landlords getting a gross rental yield of 7.53 percent.
The gross annual rental income—expressed as a percentage of property purchase price—is what a landlord can expect as return on investment before taxes, maintenance fees, and other costs, the Global Property Guide explained.
The Philippines rental yield rate tops Indonesia (7.05 percent), Cambodia (5.33 percent), Thailand (5.13 percent), Japan (5.02 percent), Malaysia (4.57 percent), Singapore (2.83 percent), Hong Kong (2.82 percent), China (2.66 percent), India (2.22 percent), Taiwan (1.57 percent).
The research was done late last year and covered the central business districts in Makati, Ortigas, Taguig, particularly, in Eastwood City, Rockwell, and The Fort in Bonifacio Global City.
The properties are 120-square-meter apartments in prime city centers.
“Only resale apartments and houses are researched,” Global Property Guide pointed out. “Yields for newly-built properties are not included.”
But the property portal warned buyers should expect the rental yields of new properties to be lower than the gross rental yields that it has published.
It said properties that command good rental rates are in excellent condition, with good facilities, and have been refurbished or redecorated within the last five years.
“Real estate is a truly global business and especially interesting as each culture is different,” opined Mark Wong, chair of the Silicon Valley Association of Realtors’ (Silvar) global business council.
Silvar is a US-based group of over 4,000 real estate agents and businessmen appointed by the U.S.’ National Association of Realtors as an ambassador association to the Philippines.
In a recent meeting, the US real estate group learned about investment opportunities in the Philippines, including Global Property Guide’s research on rental rates.
“Many in attendance were immigrants from the Philippines, former natural born Filipinos interested to learn if they can still purchase property there, as the country has restrictions on foreign ownership,” reports Rose Meily, Silvar’s public relations officer.
In the conference, the US-based agents learned that a foreign national or corporation might enter into a lease agreement with Filipino landowners for an initial period of up to 50 years, and renewable for another 25 years. A foreigner married to a Filipino citizen can hold title in the Filipino spouse’s name. The foreign spouse’s name cannot be on the title, but can be on the contract to buy the property.
“Discussion became quite technical when a question on divorce and ownership was raised, as there is no divorce in the Philippines,” Meily said.