Being an instant landlord is a good motivation for buying a condo in Muntinlupa, Makati, Taguig, or any other part of Metro Manila with a thriving business district. Although many Filipinos, including those who have been based outside the Philippines for many years, want to buy houses, the condo rental market in the country has been consistently growing over the past years.
A condo, as a secondary place of residence, makes a good investment. The rental yield in the country is among the highest in Asia. Many Filipino renters are willing to pay anywhere between 10,000 pesos and 44,000 pesos just to live in the city and be closer where they work. Apart from using monthly rental payment to pay off any loan you take out or replace the money you have spent in your bank account, you can also grow your wealth passively through steady capital appreciation.
Despite the attractive benefits of buying a condo that you can rent out, it is imperative to be ready for the demands of being a landlord. You may not have to live next door to your tenant to attend to immediate needs since the condominium management can take care of them on your behalf 24/7, there are things you need to do to ensure that your investment stays profitable. To avoid rookie condo investor mistakes, use the tips below:
Think About Your Market Beforehand
Rule number one in real estate investing is knowing your market even before buying the unit. Not every condo is right for every renter, so it is imperative to pick whom you wish to target to ensure occupancy 365 days a year. Do you want to cater to unmarried young professionals who want to prioritize their careers? Would like to open your doors to growing families who can’t afford to buy a property of their own yet? Are you more interested in attracting expats? Your choice of tenant affects what type of condo you purchase and how you market it. You can consider to cast a wide net, but it pays to have an image of your ideal tenant in mind as early as possible.
Take Presentation Seriously
It is a must to furnish your unit to some extent before putting it on the market. Do not overdo it, though, to give your tenant some room to decorate. Make the interior design as generic as possible. Nobody wants to live in a place that has someone else’s personality.
Know Your Tenant
No matter how excited you are to get a tenant, do not accept anyone at face value. Exercise due diligence to pick a person who can truly afford to pay you on time every month. Generally, asking for proof of employment or income is enough. It is better to find a potential tenant through a referral from someone you personally know to carry out the background check much easier.
Get All Documents in Order
Talk to a qualified attorney to make sure that you have the right documents to rent out your unit. A real estate lawyer can help you create a fair contract that clearly reflects your terms and rules. You may not always find a good tenant, but a good lease agreement can protect your best interests at all times.
Getting a foothold in the Philippine condo rental market is an exciting proposition, but it comes with responsibilities. Take your time to find the perfect unit and be a model landlord to get the most out of your promising investment.