Top Real Estate Investing Tips For a Happy Condo Lifestyle

Want to succeed at your next real estate investing endeavor with DMCI Homes?

With the growing popularity of condo units as investments, more and more people are buying properties with the intent to gain from rental income, capital appreciation, and the other lifestyle advantages these buildings have to offer. Whether through traditional means or rent-to-own (RTO) strategies, you can find great success from such investments - and with the right tips and practical advice, you can choose the perfect property for your investor goals today.

Looking for property investment tips to help you navigate through the long and winding road of real estate? Take a look at this guide from the experts at DMCI Homes to map out your investor’s journey and help you achieve your personal goals.

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Understanding condo investment in the Philippines

To understand how to best pursue a condo investment in the Philippines, you have to do your research. You need to study market trends, identify the type of investor you want to become and narrow down the places you want to invest in for the most sound real estate decision-making possible.

Studying and analyzing market trends and forecasts will help you figure out the value of your property investments, even amid difficult economic times. They can help you identify the best times to commit to a purchase so that you can secure property financing with the least amount of risk during market fluctuations.

Identifying the type of investor you want to become will also help you strategize your DMCI Homes investment properly. Are you interested in buying a home for yourself, or are you looking to rent the property out to other tenants? Whether you’re choosing between short-term or long-term rentals or thinking of being a buy-and-hold investor, make sure to understand your intentions to better narrow down your choice of properties.

One last real estate question you’ll need to understand is where you want to purchase your property. From key cities and destinations to central business districts and tourism areas, you’ll need to pick a location that best fits your investor needs.

Studying market trends, identifying your needs, and choosing a location are just some of the baseline factors you’ll need for a successful investment. Continue on to the next section for a list of considerations you’ll want to keep in mind for your upcoming real estate endeavor.

Factors to consider before buying properties

If you want a successful real estate purchase, you’ll need to take some things into account first before you commit to buying properties. Here’s a quick condo investment checklist of factors to consider before you purchase your next condo unit:

• Location - Make sure your chosen development is easily accessible and located near relevant infrastructure and future developments. By choosing a unit near such places as transportation hubs, central business districts, schools, malls, healthcare centers, and major roads, you can ensure a happier condo lifestyle for yourself or for your future renters.
• Developer reputation - Always do a background check on the track record of your chosen condominium developer. Do research and see if they have a reliable reputation backed by professional licenses and certifications, to ensure that you’re picking the right developers for your real estate needs.
• Amenities and building management - What amenities are you looking for from your condominium? From swimming pools and fitness centers to private parking spaces and 24/7 security, assess the kinds and quality of amenities and property management services you want in order to pick the perfect building for your needs.
• Project completion timeline - Do you want to move into your unit right away, or are you willing to wait for its full development? Check out your chosen building’s project completion timeline and decide on whether you want a pre-selling or ready-for-occupancy (RFO) unit for your investor journey.
• Market demand and target renters - If you’re going to rent out your unit to possible clients, study the demand for rental properties in your area to see if there’s actual rental income potential. Also, identify the type of renters you want to target so that you can narrow down how you want to market your unit to these tenants.

With these factors in mind, you can choose the best possible building of your dreams for a great investor experience. Just make sure to check out the next section of this guide for things to prepare and strategize for financially as well.

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Preparations and strategies when you invest in property

As you narrow down your top choice of development for your real estate journey, make sure to prepare and strategize for the following financial concerns:

• Estimated costs and returns - What are the potential costs of your investment, including common condo fees like turnover expenses, maintenance fees, and home association dues? Make sure to take these costs into account as you figure out your projected rental yields, should you be interested in renting out your unit.
• Investor’s emergency fund - Make sure to build an emergency fund for your accounts as an investor, as this can help you cover the fees for up to six months of unforeseen expenses, and long rental vacancy periods.
• Financing options - What financing options are you taking on to tackle this expensive endeavor? Strategize your use of potential bank loans, in-house financing options, and flexible payment terms to ensure you pay off your dues as efficiently as possible.

Want to prepare and strategize for the best financial returns for your upcoming condo investment? Maximize your projected rental potential with the help of the next section.

Maximizing the advantages of investing in real estate

To reap the most advantages of investing in real estate, enact the following practical tips for greater rental yield:

• Identifying target renters - Choose the type of tenants you want to attract based on your goals. Do you want to lock down long-term residents for assured earnings over the years, or would you rather attract short-term tenants for a vacation rental? Identify your target renters so you can price and market your property accordingly.
• Competitive pricing strategies - Conduct basic market research by checking out the comparable rental rates in the area. Set yours to be more attractive for tenants than your other competitors so that you can secure those financial returns.
• Marketing your condo - To effectively market your condo to potential clients, enroll your unit for online listings with professional photos and engaging descriptions. Get the word out about your unit so that more people can check it out and rent it.

If it’s your first time renting out your unit and you want the experience to be successful, read up on the legal aspects of this endeavor in the next part of this guide.

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Legal aspects of various types of real estate investment

The updated Philippine Condominium Law allows Filipinos to rent out their units to various types of tenants, like long-term residents, short-term visitors or tourists, and more. Of course, before you rent out your property you need to abide by the rules and pay for certain taxes and dues ahead of time.

Your main tax obligation as an owner is your real property tax (RPT), which you need to file and pay at the start of each year. You also have to pay a documentary stamp tax upon purchase of your unit. If you rent out your property, you’re obligated to pay income tax on your rental earnings, and if you resell your unit you may also need to pay capital gains tax.

When you rent out your unit, you need to create and agree upon a lease contract with your tenant. This document legally binds you and your client on clauses for your lease term, rate, rights, and more. Remember to have your contract examined by a legal expert to ensure everyone’s rights are protected throughout the lease.

With these legal aspects in mind, you can better understand what rules to abide by and what mistakes to avoid throughout your lease. To know more about what you shouldn’t do as an investor, take a look at the next section for specific and actionable tips.

Real estate investing mistakes to avoid

Know what you should and shouldn’t do as a lessor for the best condo experience possible. To ensure your long-term success, here are some of the most pressing investment pitfalls to avoid throughout your investor journey:

• Overestimating rental returns - As you calculate your costs and project your rental yield, make sure to be as realistic as possible about your income potential. Never underestimate the negative impact of vacancy periods, and know when to increase your rent price for better returns.
• Not considering long-term maintenance costs - Remember to anticipate long-term maintenance costs, as these can have a major impact on your finances. These costs should include regular maintenance activities, association dues, and a fund for potential repairs, so that you aren’t shocked by huge expenses over the years.
• Neglecting tenant screening - To minimize risk to your investment, always make sure to conduct background checks on the clients you’re allowing onto your property. One bad tenant can easily destroy your investment, so remember to screen them properly tofind the best tenant possible.

Real estate investing can be long and arduous, but it can be a rewarding process as well. If you’re looking for something to look forward to for this commitment, check out the next section of this guide.

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Trends and future opportunities for rental properties

There are tons of exciting real estate trends to look forward to for property investors like you. Here are some of the most attractive opportunities you can expect to see over the next few years:

• Technology integrations - Digital platforms and integrations like DMCI Homes’ own Communities app are making it easier for you to access property management services, community announcements, carpooling programs, and more.
• Potential in emerging cities - As more and more provinces across the Philippines expand economically and developmentally, you’ll find that there are more opportunities for people to invest in property in these rapidly emerging cities.
• Rise of eco-friendly developments - The growing interest in sustainable and green buildings is contributing to the rise of eco-friendly developments, ensuring a safer and healthier environment for homeowners in the future.

By maintaining a good habit of researching, preparing for, and managing your property, you can definitely gain great financial success for your investment. Just remember to stay up-to-date with the latest market trends and changes, so that you can align your strategy and personal goals with this long-term ownership endeavor.

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