Investing in Properties in Cebu: Things to Know First
Nowadays, people invest their money on assets that they believe would yield the highest returns possible. Often, they would ask which would have more rewards in the long run, and real estate investment is often one of the considerations. It is not just an option but a priority considering that investing in real estate usually yields long-term benefits.
Investing in properties in Cebu City, an ever-progressive city in the South, would be an opportunity not worth missing.
The question now is: which real estate products to invest in?
Investing in real estate provides multiple options to choose from based on what ideal plan you would want for yourself. After all, this is an investment for your future.
However, with the unstable economy and all, is investing in real estate worth a shot? The answer is yes. Real estate is a flexible investment plan for you. It is adaptable, easy to understand, and an income-generating feat for you.
Different opportunities are waiting when you invest in real estate, but you have to be particular with the deal you are getting.
Please remember that when investing in real estate properties such as in Cebu or elsewhere in the country, it means you will be using the said property other than for personal use. That is, you are expecting a return (or an income from it).
Real estate investment strategies to choose from
So, what are the different types of real estate deals you can look through and choose? You have your choices here.
1) Bank acquired properties
In other countries, especially the United States, these are called real estate owned (REO) units. It is a property that a bank has taken over ownership of. Usually, this happens when the previous owner cannot keep the real estate anymore or a mortgage. When you purchase this property, you will not buy it from the past owner. Rather it will be straight from the bank.
The deal would be an easy one because banks tend to release homes rather than keeping them. This happening is due to the costs of remarketing and selling the homes. Banks also don’t want to have the non-revenue-generating real estate on their hands.
Purchasing this real estate deal will be an excellent opportunity for you if you want to sell homes. Also, short selling can be an option. This happens when the bank is willing to sell it to a bidder for less than what the house truly deserves. It means the price value of the home is lesser than what it’s supposed to be.
You can purchase this house from the market and later on sell it for a higher price. You can receive profit from reselling it to others. You can also add changes to the property if you want to enhance its marketability and resale value.
This method is when you acquire a house at a lower price and then sell it to another real estate investor at a higher price, or in another case, you sell it to a person looking for a comfortable new house. The difference between your price and that of the owner will be your profit.
Technically, you don’t own the house you are selling but act as a bridge between the owner and the homebuyer. If you buy, improve, and sell the property, that’s flipping.
Whether for wholesaling or flipping purposes, check to see if there are changes or repairs to be done before buying the property. This practice saves your time in seeing the house’s interior and fixing some things that need to be restored.
Buying a fixer-upper means introducing a lot of improvements before selling it. The restoration process of the real estate property usually takes time and effort, and most importantly, another round of shelling out money. So, you must thread this investment strategy carefully.
This is the most common type of real estate investment in the Philippines, and, of course, Cebu is not an exemption. This popular strategy involves you buying a property and having it rented out by someone else. Some condos such as Amaia Steps Mandaue or apartment owners do this to their assets.
Essentially, when the condo unit is under a mortgage, it more than pays for itself. This is more so for condo units located near business districts and IT parks. Condo rentals in Cebu are between Php15,000 and Php60,000, depending on the unit’s size and location. The facilities and amenities available in the building may also affect the rental prices.
It is essential to choose the right investment strategy. Consult with a property advisor or expert to guide you with the entire process. Your goal is to make informed decisions.
Also, since it is an investment, you need to commit to learning more about the market, especially your target location and property types.
So, why would an investment in real estate be wise for you? Here are the three reasons why doing that would be a practical choice.
Real estate investing brings in profit even despite inflation.
Inflation is an economic emergency where the prices of everyday goods and services are beyond expensive, while money is low. Inflation is a difficult time for anyone, regardless of where you live.
A real estate property has a bigger chance of surviving. It’s the most secure and suitable option for your investment channel because it will withstand any challenge. The coronavirus pandemic is the proof that heightens the value of having your property.
Having a property that can be turned into a passive income is advantageous for you and your family due to the numerous ways you can profit from it. During inflation, your property will serve as a buffer.
Real estate investing is not as demanding as other types of investments.
A lot of investment plans are hands-on and direct. In many business investments, the presence of the owner is necessary. You have to be there as things happen to avoid some problems or fix that problem. Everything that needs to be handled has to go through you and should be approved by you.
The same goes for service-oriented investments. Your immediacy in the workplace of your business is needed, especially when it’s new. You’ll have to manage how the workflow goes and the satisfaction level of the customers.
However, it’s very different from a real estate investment. Once a deal has been made, and contracts are signed, the tenant is now responsible for the property, but this is more on the rental unit venture, which is still an excellent investment choice.
As the real estate owner, you must make sure that the tenant is taking care of the unit and checking if their stay is comfortable. Besides that, you can check on your property from time to time.
Introducing enhancements raise the property’s market value.
Once you have the property, you can refurbish the place a little bit for you to sell it with more profit. After all, the goal is to gain profit from your property.
Unlike buying a stock that highly depends on the company management and rate of returns, real estate investment is directly under your supervision. The decisions you enact about your investment are based on your discretion and not on some outside, uncontrollable factors.
Even though you can’t restrain changes that can occur on a business’s economic aspects, you control other investment aspects. To boost the returns of your property, you can improve your real estate. You can make it the best among competitors.
Some of the things you can do are:
If you are successful in doing so, the investment value will grow, resulting in increased income.
A property in Cebu that’s worth the investment
If you are looking for a property to invest in, Amaia Steps Mandaue is the most viable option. It is located in one of the residential areas in the greater metropolitan area. It has a total of 576 units. A studio unit is priced at Php2.2 million to rent out for Php15,000 to Php18,000 per month.
If you are going to invest in a condo unit for rental purposes, please take a moment to read these additional tips.
If interested in Amaia properties such as condo developments or other property investment opportunities, do not hesitate to get in touch with us here on our website.