Buying-Owning-Renting Property in Cebu

[Riverman]

Why ever would you contemplate citizenship here?

As Gangles said, if you marry a filipina you can get a 13 (a) Permanent Visa that is probationary status for one year and then full status granted after the one year. You will receive a duly embossed ACR card which does not need renewal.

You can come and go on this card without needing return tickets etc. Or without needing your spouse to be accompanying you.

I suppose the only reason is for property ownwership (other than multi-unit properties) , and also certain banking considertions, the only drawback there being that if things don't work out anything I would own here would revert to my "wife." That's why I'm not exactly jumping to do that.

But I do take your point regarding the Permanent Visa, certainly something I should consider. Thank you.

[Riverman]

Stroker,

Regarding the domicile, I respectfully disagree about the 12 month lease deal. I have continually been searching for a rental situation I can be comfortable with, and every time I look at an apartment I baulk when it comes to the lease agreements I see, or the value of the place compared to the rent demanded. So, every time I've decided I'm better of staying in hotels than renting an apartment. Probably what I'll do is buy a condo in a couple years, or if I decide to marry my gf and get citizenship here, I'll build something in a nearby town. That said, I'm spending most of my time here and, as they say, home is where the heart is. So for me, at this time, cebu is my home.

[Stroker Ace88]

If you live out of a suitcase (or suitcases) , if you book a room in a hotel or pension house, if you do not have a 12 month lease or own property, if your drivers license is in your Country of origin with no Philippine license, if you still make regular trips out of the Philippines back to your Country of origin then you do not live in the Philippines atleast that's my definition. Others may disagree. Possible to miss one item and still be a resident.

The important criteria IMO is the lease and or property ownership and the drivers license. Also when I mention drivers license it means more than just a holder of the plastic, it means owning and driving a car or a motorbike.

I spend 200 days a year in the Philippines most of them in and around Cebu. I stay in hotels and I live out of a suitcase. Even if the majority of my year is spent in the Philippines I can't call myself living there if I do not have the requirements to call myself a resident.

And yes, my first posting with Jackson where in 1997. Previously I was a sporatic poster, and never prolific. After a period of a couple of years of not posting, I found that my old handle / password no longer existed, and the forums name had changed, and also split into two entities. So I had to create new ones for both sites. The one for USA, and one for outiside.

Thanks for the explanation and welcome back.

[Viajando Musico]

Just a question for the guys who have brought a condo has any one sold for a profit?

Did you pay capital gain tax?

Did you use a agent or direct?

I ask this I hear many guys buying bargain but no one says they sold and collected.

I had sold 2 year ago 2 of the 4 condos I bought 5 years ago. Both with good profit, and regret as well, sold too early. I could have made better profit if I held on to them 2 more years. Well used the money for other sound investments, so shouldn't really complain. Condo price in Manila has gone up again in the last couple years. The ROI on both units I sold after paying all taxes and agent fee came out to be about 48% after 3 years of investment including all the rental income. If I sold my remaining units today with the offer I received the ROI will be at about 72% after 5 years of investment counting in agent fee and capital gain tax.

Unlike market in other part of Asia, real estate in the Philippines is not for speculating but more for long term investment. Loan is difficult to obtain, even if you do get a loan, interest rate is quite brutal not mentioning the loan to value ratio always favors the banker side. Capital gain tax on condos in the Philippines is 6% of sale price on each transaction regardless positive or negative capital gain. Agents who broker the deal normally demand another 3. With another 1% for other fees. 10% would have to be paid either by the seller or the buyer depends on the arrangement and sale price. But on the other hand rental return is quite good, and if you are in the right area, especially some specific buildings, demands are always high. I never have any of my condos vacant for more than 3 months. Mostly renters pay the whole year rent up front plus a 2-month security deposit.

I am not familiar with Cebu, but I wouldn't buy outside of Manila for investment. Actually I only looked at some very specific areas in Manila 5 years ago when I bought.

[Stroker Ace88]

Past performance is no guarantee of future failure, but prices are where they were 5 years ago in nominal terms and below where they were in real terms. Luxury condos did well between 2004 and 2008; up 55% but that was the story everywhere (except Hong Kong) until the market collapsed (except OZ, perhaps) that year. Since the great de-leveraging of 2008 (when the Euro lost 25% to the greenback between June & October 2008 and the GBP went from 88 pesos to 66 pesos), the shrinking of the mortgage market and the continuing oversupply, there is ample pussy (lest we forget!) all year round.

Global condo rates and general market conditions have no direct impact on the Philippines and can't be used as a guide when buying and selling into a domestic market based economy. Most of the condos bought and sold are done so by locals, with only a small percent bought by foreigners.

The Philippines as a whole (hole? LOL joke) does not have the same kind of mortgage leveraging banking issues that other first World countries have simply because the banking system in the Philippines does not function in the same manner. Locals have to have substantial downpayments in cash with the balance financed though Government run entities such as PAG-IBIG.

Most banks in the Philippines are owned by individual families not corporate and public stockholders like in other countries, and those familes hate to lend out large sums of money to individuals and risk losing it on a default.

[Lustforthrust]

Past performance is no guarantee of future failure, but prices are where they were 5 years ago in nominal terms and below where they were in real terms. Luxury condos did well between 2004 and 2008; up 55% but that was the story everywhere (except Hong Kong) until the market collapsed (except OZ, perhaps) that year. Since the great de-leveraging of 2008 (when the Euro lost 25% to the greenback between June & October 2008 and the GBP went from 88 pesos to 66 pesos), the shrinking of the mortgage market and the continuing oversupply, there is ample pussy (lest we forget!) all year round.

http://www.globalpropertyguide.com/A.../Price-History

[Gangles]

In my opinion, this / these questions are irrelevant.

They are only applicable at a particular instant in time, because many factors influence the price of purchase or sale of a property.

My house is a classic example.

I bought it in 1989. Cost $42, 000.

My most recent appraisal has been $450, 000.

But the market goes up and down, strategically and tactically.

Maybe if I sell tomorrow, I get $500, 000, or maybe $400, 000.

When I finish painting it, I add about $25, 000 to the sale price.

Will I get the extra? Who knows.

In one year, the value of my place increased by 100.

A good friend of mine was offered a house in his development in Bacoor, Cavite, for 8 million pesos ($200, 000). He asked me to go with him to check it out and appraise it. We came to the conclusion that hte price was too high, so my friend offered 5 million. Owner protested, but the offer stayed. 1 year later, the owner accepted 5 mill because he needed the money. Cost about 1 mill to refurbish the place, and now a very nice house to live in. So what is the true value of the house? 8 mill? 5 mill? (5 +1) mill?

Who knows, it varies day by day.

In my opinion this discussion is superfluous, because it does not take into account the objectives of the purchaser.

For the person who buys for a permanent place to live, like RK, the fluctuations are irrelevant.

For the person who buys for the purpose of making capital gains, the day to day price is everything.

For the investor who buys for income stream, the day to day fluctuation in capital value is a consideration, but not critical.

G.

Just a question for the guys who have brought a condo has any one sold for a profit?

Did you pay capital gain tax?

Did you use a agent or direct?

I ask this I hear many guys buying bargain but no one says they sold and collected.

[Red Kilt]

Just a question for the guys who have brought a condo has any one sold for a profit?

Did you pay capital gain tax?

Did you use a agent or direct?

I ask this I hear many guys buying bargain but no one says they sold and collected.

Good questions Frenzy.

In my post I was just indicating that IF I wanted to sell I could show a profit because the current market price based on a recent sale of an equivalent condo in my building is higher than the price I paid. However, it is not so easy finding buyers these days. It is not a question for me because I bought mine to live in and have no intention of moving out for a while yet.

I'd like to hear about some stories of investment successes too if anyone wants to share. Maybe investment failures too if anyone dares to share that. Your own stories too, and not the ones passed around by curious bystanders.

[Frenzy3]

Just a question for the guys who have brought a condo has any one sold for a profit?

Did you pay capital gain tax?

Did you use a agent or direct?

I ask this I hear many guys buying bargain but no one says they sold and collected.

[Red Kilt]

These condo developers are nothing but road side thugs in suits with money they made from dis-honestly means. They don't have any ethics or morality. Worse they don't have any soul. You think they made these condos by fare means to all party? And you think why these condos are over-priced?

. SNIP. .

I guess you haven't actually bought a condo here yet Starchild but you are extrapolating from some cases that you know and I am sure you have examples to support your hypotheses.

However, I must agree with Freebie Fan here. I own a condo in a salubrious part of Manila. I paid less than market price for it because I had a fistful of dollars and the owner wanted to sell. The current selling price is higher than the price that I paid.

I agree with your dictum of "buyer beware" but that holds for everywhere.

There are some good deals to be had too.

[Gaijin Gigolo]

Thanks for all the input, much appreciated.

I should have mentioned I am looking at buying a condo or two as an investment property which I could rent out when I am not visiting the place myself for long weekends. Problem with anyplace other than Cebu or Manila is the time wasted getting there. Damuguette is appealing, but again, I don't want to waste half my weekend getting there and back. I'd only be interested in places where there is a direct flight from Hong Kong. That's why I'm really only considering Cebu, as I also have no interest in living in Manila. Angeles is a possible alternative to Cebu though, thanks for the suggestion, but I'm not really into the Angeles scene. (And frankly, I don't really care if there any other expats around to chat with.)

Legallly, I'm aware I can buy a condo in my own name, but not a house. And as far as contributing to the wealth of the evil condo developers, I suspect 'normal' Filipinos are the ones doing most of the construction work, the upkeep, and the marketing and sales of such places. The way I see it, if I'm spending money to stay in the Philippines part of the year, I'm contributing to the economy, am I not?

Thanks again for all the input.

[FreebieFan]

Food for thought regarding Condo purchases in third world countries.

Guys. I'm from a third world country, poorer and worse than the PH, however, the modus operandi used by these mafioso's are same from India to PH.

These condo developers are nothing but road side thugs in suits with money they made from dis-honestly means. They don't have any ethics or morality. Worse they don't have any soul. You think they made these condos by fare means to all party? And you think why these condos are over-priced?

-

Why do you think the price never comes down in PH even when no body is owning it. Logic would suggest otherwise right. The reason is simple. They made the condo by unfair means and paid lots of bribe. When you buy the condo. You are indirectly paying the bribe to own. If they had any good intention. They should have lowered the prices long time ago and let filipinos own some of them.

-

Do not be self destructive guys. We foreigners would be happy in PH, when others around us are happy. Buying over expensive space less condos will only make the god father rich and will do nothing to make ordinary Filipinos happy. I understand life isn't great back home either and you just want to get out etc etc. And I'm not asking for charity or go out of the way to do things for filipinos or how just simple tiny me. Could change the destiny of entire ph etc etc thinking.

I'm.

You have the power now. People should just walk away and show the middle fingers to these Mafioso's who think they can take anyone for a ride. Crush them when you can. Walk away. If you want to own condos. Buy from ordinary Filipinos or OFW. Who constructs three four storey building in their own land with sincere money tolling hard abroad.

Get a good deal on your investment and for your soul by making smart choices. Good luck

As the owner of 3 condos in very superior locations in Makati, I can only say its proved to become of the best investments I have made. Ayala and Megaworld are not exactly the Godfathers you make them out to be. The prices do include the fact that a government officlal or two may have been given a condo or two along the way but all units have that system so its included in everyones price. Two of mine have doubled in price over past 5 years. I really don't see the validity of your discussion point.

[GoodEnough]

I don't own any condos in the country, and I'm not sure I'll ever buy anything given questionnable construction practices and the prices, which seem unrelated to demand. Condos are sprouting like weeds in Davao as well, and when I first arrived here, less than 9 years ago, there were none. So clearly there's a building epidemic.

As far as I know, there is nothing here similar to multiple listing services, and general property databases that would allow you to check on the history of prices for homes / condos in various areas. Given the lack of data about what's been sold, how long houses remain on the market, what other simlar properties are selling for in different areas, it's a bit difficult trying to assemble enough accurate information to make decisions. Then, given the exorbitant interest charges for mortgages, it's even more difficult to work out if you're better off paying cash.

GE

[Starchild2012]

Food for thought regarding Condo purchases in third world countries.

Guys. I'm from a third world country, poorer and worse than the PH, however, the modus operandi used by these mafioso's are same from India to PH.

These condo developers are nothing but road side thugs in suits with money they made from dis-honestly means. They don't have any ethics or morality. Worse they don't have any soul. You think they made these condos by fare means to all party? And you think why these condos are over-priced?

The reason the condos are expensive and does not make any sense on price is the way they made it.

First. Create fear in squatters how unsafe the living condition is.

Second. Burn down the squatters.

Third. Move the poor people away from prime land in the name of unauthorized occupation of government lands.

Fourth. Not safe to come back for fear of fire again.

Fifth. Bribe the godfather in power.

Sixth. Bribe the police, mayor, media. So the news of squatter struggle is suppressed for next five years.

Seventh. Quietly move over and start constructing

Eight. Relax the rules for owning condos in PH by foreigners 'because we have already sucked up all money from Filipinos.

Ninth. Recover all the money that we bribed to police, mayor, politicians from gullible foreigners.

-

Why do you think the price never comes down in PH even when no body is owning it. Logic would suggest otherwise right. The reason is simple. They made the condo by unfair means and paid lots of bribe. When you buy the condo. You are indirectly paying the bribe to own. If they had any good intention. They should have lowered the prices long time ago and let filipinos own some of them.

They are building condos after condos while the poverty keeps increasing in the PH and foreigners keep occupying it. Only few families with their 40:60 investment scandal makes them virtual monopolistic empire of everything in the PH.

I understand there are OFW who are owing it too. But its their land. They don't have one more choice like we do. Walk away from everything in the PH.

-

Do not be self destructive guys. We foreigners would be happy in PH, when others around us are happy. Buying over expensive space less condos will only make the god father rich and will do nothing to make ordinary Filipinos happy. I understand life isn't great back home either and you just want to get out etc etc. And I'm not asking for charity or go out of the way to do things for filipinos or how just simple tiny me. Could change the destiny of entire ph etc etc thinking.

I'm just asking people to look at both sides of the story, look at info's and make the right decision. Any tiny sincere good vibe send to other humans shakes the whole planet. Your tiny move would have greater power than the entire billions spend on condos in poor third world countries.

You know deep down your heart. Its not the right deal, 'because we still have our soul. Its way over expensive with less space. Every condo is same. 'because its made by same people with different family names but with same intentions to suck money and give you the short end of the stick.

-

You have the power now. People should just walk away and show the middle fingers to these Mafioso's who think they can take anyone for a ride. Crush them when you can. Walk away. If you want to own condos. Buy from ordinary Filipinos or OFW. Who constructs three four storey building in their own land with sincere money tolling hard abroad.

Get a good deal on your investment and for your soul by making smart choices. Good luck

[D Cups]

I would suggest talk to a attorney first to make sure you can buy legally. After that look around various places. AC has lots of expats who will help you in case of need and you can have expat friends.

Cebu is a nice place but I would think better to get away from big cities because of crime. Do a lot of research and it is always better to rent long term first before buying.

Dumaguete on Negros and Siquijor Island have some outstanding real estate values.