Why rentals make great investments

The expanding population, the huge amount of workforce who migrate to Metro Manila, and the huge amount of tourists are the reasons why rentals in the Philippines are just a hit nowadays. It’s a passive income which means  it requires less effort than most businesses. With the help of property portals and online shared services like Airbnb, anyone can with a spare room can become a landlord. Below are the reasons why the rental business in the Philippines is a huge hit.

Expanding demand

The rental market in the Philippines is at is strongest. Sixty percent of Filipinos would rather rent than to buy property. A huge part of this sixty percent are young professionals who are simply not yet financially equipped to invest on a house. Renting a property gives the young Filipino population access for an properties that hold no commitment and flexibility.

Aside from the number of young professionals, rentals are also glowing because of the tourists that come in and out of the country. Three percent of the more than three million tourists that enter the Philippines prefer to stay in a rental home because they are more inexpensive and accessible. Thanks to online sharing apps and property portals, regular homeowners now have the shot to promote their places to tourists who are planning on visiting. No need to invest on a separate property if you want to start a rental.


Affordable properties

Real estate in the Philippines is one of the cheapest in the whole South East Asia. According to the research of Global Property Guide, a 120 square meter apartment located at the best addresses in Metro Manila only costs  $3,156 per square meter. This is cheaper compared to Hong Kong where a 120 square meter apartment will cost up to $22,814 per square meter. The inexpensive price means that landlords can enjoy a higher rental yield and can pay for the property they bought in no time.

Strong rental yield

A recent study from Global Property Guide reveals that a residential condominium in Metro Manila experiences an 8 to 15 percent of returns annually when they are being rented. A studio unit located in a prime location can give the owner up to 15 percent of returns.

Of course having a rental property is not always smooth sailing. There are some disadvantages such as the maintenance cost, security of the property, and supply spikes especially when there are too many rentals available in the area. Getting your property ready and creating an effective investment portfolio can help you get around these downfalls.