As of May 2019, we have seen an increase in property prices for pre-selling projects in the Philippines. In USA, they call it, “ installment sales “ properties. These are properties that are paid in monthly installments while it’s in the construction stages.
Most of the condominium offerings in todays market, is more than the P 3.2 Million Pesos range ( or $ 61,540.00 ).
Exceeding this threshold, requires the purchaser to shell out an extra 18% on top of the selling price.
For property investors today, this has become a standard expense. But, what if you can take advantage of getting a unit without having to pay this added tax?
One of the projects that caught our attention in terms of the figures is a high rise property in Mandaluyong.
Here are the numbers..
We can compare Project 1 ( left column ) vs. Project 2 (right column)
In the graph, the current rental rates of studio units in Project 1, is $ 400 a month.
Project 2, has finished 2 towers already and we have closed rentals for the same price at both towers. Here are some photos of their finished project.
Tower 2 photo of a condo unit furnished for rent in sunshine 100
Their next project ( on the works ) is Tower 3, allows a buyer to make installment payments for $ 256 dollars in 3 and a half years.
After 3.5 years of payment, the financing can be paid through Pag Ibig. Pag Ibig is a government program which allows residential houses and lots to be mortgaged for up to P 6 M Pesos (or $ 115,385 dollars)
In my research, they are the only program that accepts mortgage applications from unit owners in this particular development while its ongoing construction. Usually, they only allow loans through re-sale of the condominium property.
This advantage, allows the buyer to access up to 30 years of payment which only results to lower amortizations.
The affordability of this project allows the unit to pay for itself. Lets take a look at the chart, once again..
Assuming an investor has already finished paying 256 dollars a month, he can apply the property through the Pag Ibig program. Choosing 20 or 30 years on Project B, would net a positive gross income ( Monthly Income $ 400, – Monthly Amortization 337 = + 63 dollars a month ), while Project A would not cover the monthly expense even if we stretch it for up to 30 years. (Monthly Income $ 400, – Monthly Amortization $ 715 = – 315)
The potential for increase in value when it’s finished is also present ($ 96,387 versus $ 60,170).
These factors, together with the future development of a commercial mall
(The strip mall will be redeveloped together with an upgraded casino)
and a bridge access connecting the highway to the Bonifacio Global City, allows a good opportunity for investors looking for opportunities in the market today.
If you want to take advantage of this opportunity, Call our office now.
Office No. 956-3284
Mobile Nos. (0915)567-7656
US Line: 001 562 443 8556