How to Invest in a Condominium in the Philippines

how to invest in a condominium in the philippines

Thinking how to grow your hard-earned money?

Investing in properties is one of the wisest ways to create a stable income. Real estate investments in the Philippines offer opportunities for you to explore different types of assets which you can buy and sell.

Property developers are also aware of the demands of Filipinos, especially those who work overseas who may eventually either buy a property for living or investment.

There are an estimated 2.3 million overseas Filipino workers recorded in 2018. Most of them are from CALABARZON region, Central Luzon, NCR, and Ilocos region, making these key areas prime for property developments.

In a space of only 8 years, the Philippines experienced a massive housing boom according to Global Property Guide. Makati CBD prices, for instance, increased by 132% from 2010-2018 data.

As a result, you may be thinking it’s a good idea to get into the property market now by purchasing a condominium in one of these areas. And you may be right! But, there are many things to consider before you take the leap. Hopefully, this guide will serve you well and help you decide whether investing in a condominium is right for you.

Importance of investing in properties

Compared to other types of investments like stocks, forex trading, and Bitcoin, properties involve a relatively low risk. But it requires an enormous amount of investment and would even be an advantage for you if you pay in cash to avoid interest rates.

Properties guarantee a steady cash flow if you have a long-term plan, whether you’re leasing a condo, a commercial space or land.

In a nutshell, it’s a stable way to grow your money with potential profits that can result in financial freedom in the long run. If you’re young and you want to make sure you and your parents enjoy their retirement years, you can build a steady income for them too.

For example, if you purchase a 3-bedroom condo unit near a university belt in Metro Manila (let’s say in Katipunan) for about P5,000,000 and each bedroom cost P18,000 (3 x P18,000) you end up P54,000 per month gross rental income.

After ten years, you get P6,480,000. This computation doesn’t include taxes, inflation rates, rental yields and other fees. But to simplify how to get your return on investment (ROI), it means after 10 years you get your ROI.

Depending on the location, the value of properties increases especially if there are planned business or real estate developments. And it’s important to note that these kinds of developments are not relegated to Metro Manila, they can occur in other provinces as well.


4 Benefits When You Invest in Properties in the Philippines

#1 You Can Generate Passive Income

When you lease the condo you bought, you can generate a passive income that could be supplementary to your monthly income. While you sleep, money comes in as the lessee is obliged to pay you the monthly rent in a specific term (e.g. 2-3 years).

#2 Easy to Finance and You Can Buy More Assets

You can easily finance a condo unit as long as you have a good credit history. You can borrow money from banks or fund it via PAG-IBIG, and even in-house financing.

If you don’t have a PAG-IBIG account, you can get financing directly from banks so you can compare which among them offer the lowest rates instead of the in-house.

If you know how to handle your property rentals and decided to buy another unit, you can use positive leverage where you can purchase other physical assets and use them as collateral. This strategy is suitable for someone who’s been investing property for years.

#3 Invest in Other Businesses and Ventures

For beginners, leveraging your property to purchase other large assets might be too advanced a strategy.

Instead, if you’re able to cover all of your expenses (including your mortgage) through your existing salary, the rental income generated from your property can be used for smaller investments like stocks, forex trading, bitcoin or even a small business.

#4 You Can Take Advantage of Booming Markets Outside of Metro Manila

There are booming markets and cities outside of Metro Manila like CALABARZON, and Central Luzon. The government is also looking for other options for business hubs like Clark (soon there will be the Global City Clark) in the north. It’s expected to be larger than Manhattan, a $14 billion ‘pollution-free’ city that will rise over the next three decades.

The Clark International Airport is now servicing domestic and international flights regularly, and President Duterte is also looking at Clark and Bulacan for new airport projects to decongest Ninoy Aquino International Airport in Pasay.

The ongoing construction of roads and rail projects in the pipeline that connects north to south will provide opportunities for investments outside Metro Manila.

5 Things to Consider Before Buying a Condo as an Investment

Investing in a condo is something that requires a lot of planning

You need to consider your current income, credit history, emergency funds, and savings.

Should you be too hasty and fail to do the appropriate research, your lack of knowledge would result in consequences that you may regret in the future.

There are several things you can do to start closing the knowledge gap. Share your plans with someone in your network who’s also in the property market, speak to a real estate agent to get a sense of the market or join Facebook groups and explore crowdsourced information to assess if it’s for you.

Pro tip: For example, my family and I plan to lease our property for commercial use, and we don’t know the nitty-gritty, smart-street ways on how much the property should be valued. I consulted this matter with my friend’s father who happened to be in the business of leasing of commercial properties. He provided me with some tips on how to value the space, how to compute the monthly rent, exclusive of the taxes, such as 12% withholding tax, depending on the rental income.

Be proactive in consulting these matters including the legal matters. Surely, you have a lawyer, an accountant, and entrepreneur friends whom you can ask.

Target market

Treat investing in a condo like a business and decide who’s going to be your target market. If you want to target university students or post-graduate students, buying a unit nearby schools or universities would be practical.

Most condo developers have already done the market research and why they build in certain areas. So, there would be less work for you, but your job is to decide on which market you want to cater to and get to know their needs.


Location can either break or make your investment plan. You need to consider the long-term changes in the area you’re planning to buy, whether it’s in Metro Manila or in emerging provinces.

For example, if there are booming businesses and BPOs in other provinces, are you willing to risk it and buy there and see and wait what happens after 5-10 years?


How long do you want to lease or even own your condo? Do you want to initially stay there for 3 years and then rent it out after, or do you plan to get your ROI after 10 to 15 years? Do you want to resell the unit after that or create a steady flow of income by buying more units?

Timing unlocks opportunities and also closes doors. You may not have any control of what developments or changes occur in that location, so, the wisest thing to do is to conduct your research and decide if you’re willing to do it for the long-term.

Either you end up buying a property that will appreciate in value, or because of too much competition in the neighbourhood, you’ll have a hard time finding long-term lessees or renters.

You also need to consider the turn-over year of that unit (i.e. when the development is finished and handed over to you) and when you actually need the property to become available for you to rent or to live in.

The developer of the projects or condominium

Low cost and high-quality – can you find an investment that is both? Generally, if it’s too good to be true, then it isn’t true.

There are a ton of property developers scattered across the Philippines, each one having their own strengths and speciality regarding the type of properties they’re developing.

Avoid those low down payment promos – as they usually come with hidden charges in the long-term. Assess your tolerance of risk and your ability to mitigate risks when issues arise or expectations are not met.

Here are some examples of popular property developers who are operating in the Philippines at the moment:

  • Ayala Land
  • SM Prime
  • Megaworld
  • DMCI Homes
  • Robinsons Land Corporation
  • Vista Land and Lifescapes
  • Filinvest Land
  • Shang Properties
  • The Rockwell Land
  • Empire East
  • Century Properties

You may also check a comprehensive list of property developers at Zipmatch

How Much Does it Cost When Investing in a Condo Unit?

Here’s an overview of the range of price per square metres or apartments in the biggest cities in the Philippines via Numbeo.

Location Gross Rental Yield (may vary from different cities and municipalities) Average Price (per sqm). are rounded off Price Range
Metro Manila
Within the city centre 5.67% or more P141,000 P180,000 – P200,000
Outside the city centre 3.70% or more P69,868.14 P35,000 – P90,000
Within the city centre 5.51% or more P83,437.60 P20,000 -P138,000
Outside the city centre 3.99% or more P62,500 P16,000 -P86,111.28
Within the city centre 2.81% or more P101,574.99 P74,724.97 – P150,000
Outside the city centre 3.85% or more P38,459.49 P12,916.69 – P52,461.77

Here’s a sample computation you can use as a reference via PhilPropertyExpert on how to get the ROI when you buy a condo unit.

The computation is a straightforward method provided that you buy the unit in cash.

Note, figures may vary, and other expenses and brokerage fees are not included.

Computations of financing from banks and other institutions vary as well.

Disclaimer: This is just an example and figures are based as of this writing. Actual data will change.

Cost of a 23sq studio condo unit (based on the data above, P200,000 x 23 is located in the city centre) P4,600,000
Estimated rental income per year (P18,000/month) P216,000
            Vacancy Costs (3 months) P54,000
            Monthly Dues (12 @ P2,000) P24,000
            Taxes P6,500
            Maintenance P5,000
            Insurance P3,500
Net Income P123,000
Return of Investment (ROI)

= Net Income / Total Cost of Unit x 100

2.67% per year or about 9 years and 7 months.

Remember, any type of investment, regardless it’s a stock or property will always involve risk and capital. Before venturing to buy physical assets like land or a condo, make sure you have manageable cash flow, savings, and emergency funds.