What makes home rental an attractive investment in the Philippines?

After experiencing years and cycles in regular employment, investing for a passive income is the next ultimate goal that everyone wants to achieve. Passive income refers to the earnings derived from investments, business partnerships, or enterprise in which a person is not actively involved. Perhaps, renting out properties is among the best ways to achieve every Filipino’s goal. Think about earning money without lifting a finger.   

As such, a growing number of population and the booming economy of the Philippines are some of the major reasons why it makes perfect sense to invest in real estates and home rental business in the country. Plus, the increasing rate of foreign and domestic tourism has made sure that there is no shortage of tenants, especially in Metro Manila ‒ the capital city of the Philippines and the most densely populated city proper in the world in 2018. 

If you’re deciding to establish your source of passive income and be your own boss, know that a couple of rooms can provide steady monthly income, just enough to cover expenses even beyond your retirement years. If not yet convinced, I’ve rounded up more reasons why rental properties make an attractive investment in the Philippines:

Surging Demand for Rentals

As I’ve mentioned, foreign and domestic rates are promising in almost all parts of the country these days. The population growth results in a surging demand from low-cost buyers or high-end renters in metropolitan areas such as Manila and Cebu. Reports also show that the high rental demand has decreased the vacancy rates in different rental properties across the central business districts in certain towns of Manila including Makati, Fort Bonifacio, and Ortigas. 

Additionally, a study released by Lamudi, a property listing site, reveals that 69% of Filipinos delay purchasing their own homes and prioritize home rentals instead due to financial constraints. Aside from a strong number of local occupants, foreign investors and multinational company executives also prefer prime rentals that they find relatively cheaper compared to other countries.  

Despite the witnessed increase in rental rates and demands, the country is not yet seeing any sign of slowing down this year.    

High Occupancy Rates

The high demand for home rentals provides an assurance that landlords won’t have to worry about their units sitting for a very long time without finding a tenant. This also means that high demand for rentals and shortage of supply will surely bump up prices in the long run.  

Affordable Property Prices

Investors have two options, either to purchase properties from real estate apartments and condominiums or negotiate with project home builders if they already have a space for the construction. Good thing is that you can find several affordable property prices among 13,400 new condominium units around Makati Central Business District, given that properties in the Philippines are one of the cheapest in Southeast Asia.   

Potential Growth   

The continuous progress of home rental business provides a striking potential growth of the business community range. This means that not only those with rental properties can attain the rental business. Different online hosts such as Airbnb and HomeAway made it happen for homeowners to rent out their extra rooms at home.  

Making an investment decision is never an easy task but once you’ve decided, here are some expert tips when investing in home rental properties: 

  1. Identify your target market and location. 

  2. Furnish your unit to create an appeal and attract renters. 

  3. Use different strategies to market your unit. 

  4. Have a detailed lease contract to have a safe deal. 

  5. Take care of your tenants and treat each of them as your best customer.

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Written by Sarah Contreras

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