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Originally Posted by Paul B.
Does anyone know anything about Manila real estate? I remember Mark (mnlgrind) was telling me to consider buying in the Fort area, Bonifacio Global City (BGC). I didn't give it much thought, but now I'm on the fence between buying a place and just renting.
I have done a little research regarding this and a lot of online resources and news articles seem to indicate that the real estate market in BGC has been booming. I have to do a bit more research but would appreciate any insight in the meantime.
PaulB
This is probably the best article I have read about buying a condo in Manila. PM me if you want the source.
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I bought a condo in Makati almost 4 years ago. It is 150ish sqm. With a parking slot (titled) on the 20th floor of a 38 floor building. It was a 3 bedroom back-converted to a very large 2 bedroom w/maid quarters. Purchase price was 5. 1 million (at p56 to the dollar) which seemed like a fair amount based on comparable units in the market. This covered everything in the transaction including a condo certificate of title from the Makati City Hall (where I picked up the original copy and paid about 10 months of back taxes). I took many months to make the decision. And here are the lessons learned.
If you are a working professional you'll probably need to live in Manila. (close to the airport) Manila is a lot like Mexico City. Spend a few months here and get to know the place. The best places to live in terms of investment value are Makati, Rockwell, and Fort Bonafacio. The most interesting places (in Manila) to live in terms of lifestyle are Malate (awesome nightlife and shopping, tons of pussy (and stick pussy should you indulge)), near the water, close to the US Embassy) and Makati. I choose to buy in Makati as it's the financial district of the country, lots of old money, great restaurants / shopping and there were better deals in Makati than the Fort and Rockwell (which are newer areas). While Malate may have been more fun (in terms of the classic "Pearl of the Orient" experience) Makati just made more financial sense. If you are retired, then Tagatay and Cebu are great choices (mostly beach and resort destinations). In all these places you can get decent internet access. Makati, Rockwell and the Fort are the best. Followed by Metro Manila (Malate), Cebu and Tagaytay.
You need no special visa to buy a condo. Show up on a tourist visa. I recommend going to the Philippine consulate and buying the one year tourist visa. They will automatically give you 59 days on arrival.
What did I do right?
Use a local to handle every aspect of the transaction. Agree on a price before you personally inspect the unit through your representative. If they sense a foreigner, the price goes way up so have a nice Spanish sounding alias. Have a local you can trust (or who's trust you can buy) do most of the legwork. Do not use any member of your girlfriends family for this. In the Philippines, everyone is looking for their cut.
Examine the area. I almost bought a great 3 bedroom unit overlooking the Manila Yacht Club in Malate. They are now planning a new high rise that would have obliterated the view. Do your own investigation of the area because the developers won't have a clue or will lie to you. Real estate titans are at war here, and they will build in some areas just to piss off competitor's in the market. Look at the small things. Super cheap doors and fixtures will translate directly into less rebar and more sand in the cement. Examine hinges, wire gauges, locksets, under the counter plumbing, cracks in the concrete and fire control systems.
If you are buying from a developer, make sure you get a title. Without a title you do not legally own anything. Get this in writing before putting money down. If you are buying from a owner. Make sure they have the title and taxes current, and in their name. There is no escrow. So when you pull the trigger you'll wire a big lump of cash to these people. Know who they are, look at their passports. US tourist visas are a good sign that the owners are not in this to rip you off. Basically, check the class credentials of the seller. If the sellers are clearly upper middle class, drive nice cars, have vacationed in the US and own reputable businesses the deal is probably on the level. If it is your girlfriends uncle who arranges visas for her friends to go work as entertainers in Japan. You may have a problem. Check whatever back story they tell you about why they are selling. Remember. As a foreigner you can only own a condo. Not a townhouse, not a connected property. If it has land (as part of the deal), the purchase is illegal and while you may still hand over the cash (and even get a title); in the eyes of the law you are not the rightful owner; someone will eventually find out and steal the property from you. Again. Only buy a condo.
Ask about appliances. It is common for new units to lack air conditioners, hot water heaters, and kitchen appliances. Expect to pay for these separately. Make sure your unit has plumbing for hot water in the bathrooms and kitchens. Chances are the maid quarters will not have facilities for aircon or hot water. (locals treat domestic help very poorly) If you plan to use the maid quarters as a quest room. Make sure there is some reasonable way you can add these comforts. (I added a shower water heater, and was able to duct (hack) a small aircon unit that vents into the buildings exhaust fan system).
Understand your building monthly fee structure. See if you can get a discount for paying all your fees yearly. Make sure there is a working, tested fire alarm and sprinkler system. Make sure there are no rules in the condo association that prevent you from voting if you are a foreigner. Find out if any of the major owners or shareholders of the condo corp. Actually live in the building. Remember, uneducated Filipinos are a very dirty people who live (and eat) like raccoons. Make sure your building is strict about tenant boundaries. If the doorway to each unit has about 10 pairs of crappy sandals outside and a shrine to the virgin Mary. Don't buy in that building. Locals will live with 8 roommates and leaks (water), roaches, puddles, short circuited appliances and bare wires don't seem to overly worry them. Personal standards for cleanliness and sanitation are FAR LOWER than yours. Even the best buildings in Makati or the Fort can have foul people supported by remittances raising chickens and living stone age lifestyles above or below you. Look for signs of that. Feathers in the hallway. Look for other foreigners in the building. Ask what percentage of units are owned by foreigners. Ask how many owners live in their units. An owner occupied unit above you is likely to fix things like the inevitable leak in the plumbing which will destroy your drywall. The renter will live for months with no shower curtains, water pouring into the walls, a kitchen infested with roaches and a smell of burning wire they just can't pinpoint. I had renters above my unit with leaky plumbing, no shower curtains and tile damage in both bathrooms. It has taken a year to resolve. Luckily, the building is reputable and tried to repair all damage. A process I had to babysit every step of the way. Ask if your building has a local staff of maintenance engineers or contracts this out. You are much better off if they contract out. Local building engineers are, in my experience all clueless yahoos who will paint over leak damage, stuff newspapers into walls to try to 'soak up the water' before it hits your drywall, or attempt cement patches on damp nonviable concrete. Take lots of pictures as they do the work. Remember. There is a reason this country is such a ****hole. It's a perfect storm of incompetence, laziness, corruption, poor education, remittance welfare, low standards and an accepted practice of jacking foreigners. You will deal with this in the nicest buildings, and even the nicest buildings will (due to the tropical weather and pollution) look 30 years old five years into your ownership.
Keep all utility bills, receipts (especially for appliances), invoices, everything. You will need them for taxes, as proof of payment, to establish that your electrical meter has broken (why is my power bill 40% more this month); you never know when some scrap of paper will be the key to getting something done. Never give anyone a complete set of keys to your condo. Put US made high quality (Medeco) deadbolts on all internal doors. Insist on references and police clearances for any domestic help you may hire. Lock, alarm and webcam everything.
Be assertive about your property taxes. There is a strong chance you will not receive your yearly tax bill. Before the locals declare your property in default without due notice (and "auction" the title to a friend or relative) send someone to city hall every year and take it upon yourself to pay the property tax proactively.
Another unexpected surprise will be your utility bill. Local rates for electricity are possibly the highest in the world. I typically spend $500. 00 US a month on electricity and water. However, I run my aircon (and dehumidifiers/ air filters) all the time, have lots of computers, and take hot showers.
Shower (multipoint) water heaters will explode (and flood your kitchen / bathroom) should there be a dramatic change in water pressure. Make sure your water heaters have a drain path, if possible, to a floor drain.
Some unsolicited personal advice
Be willing to consider whatever you invest here as "fun money". If you are just visiting to get laid. Rent. If you don't have an income from outside the country. Rent. You will NOT find any job in this country that will allow you to live a western lifestyle without some pretty high in-demand skills (you'll take a paycut) or a family member in the Philippine Senate. Do not invest in ANY business venture until you have lived locally for at least five years and establish connections. Never go into business with a girls family.
Most guys are here for the pussy, the girls (at all economic levels) love to **** and all speak English which makes it a lot more fun (and meaningful) than Thailand or other similar destinations. Risking the purchase price of a condo over a few pints of semen is not an intelligent financial decision. However, if you (also) love traveling in Asia, a low cost of living, and being close to opportunities in the region I strongly believe the Philippines represents the best overall investment opportunity in the pacific rim. However you only have rights as far as your cash and connections will carry. Stay off the radar. Do not attract attention or trouble to yourself. Never forget these key points.
- You are a guest (be respectful in whatever dumb situation you face) in this country so act like one.. You are in a poor country. There is POVERTY all around you. Never lose sight of this.. You have no rights here (beyond some minimal protection as an investor) and frankly if your "rights" are at issue, you're probably a self-absorbed idiot who's already lost the argument.. Don't break the law but if paying a fee will settle the issue. Go with the fee.. Always carry photocopies of local ID (don't carry the real ID) unless you are going to the airport.. The locals have no ethical issues with ripping off foreigners. Your embassy WILL NOT HELP YOU. Re-read that a few times.. Filipinos are pack animals that think and act as a group. His/Her priorities will always be family, the children you may have together, friends and then possibly you.
If you are single, do not invite locals to your place. That girl you let yourself believe was at 18 at the bar will look 14 at breakfast the next morning eating a hot dog and txting her friends. What you spend on local hotels will pay huge dividends in peace of mind as your modest condo will come across as very wealthy here in the Philippines. Again, don't be a target. I am reminded of a story a friend tells. He told his girl that things were so expensive in San Franciso that he spent p20K pesos on a coffee maker! She replied cleverly "I paid two pesos for mine! " and held up her spoon. The message intended was "things at home are super expensive so I don't always have a lot of money to send you, " the message received was "holy crap, this guy can blow a months salary on a coffee maker! "
OK. What did I do wrong? What mistakes did I make?
I can say that I did almost everything right. Great location, lots of new buildings going up nearby and something the size I have usually sells (today) in the 9 to 10 million range. Unlike my US investments, my property here has appreciated. Owners live in the building, it is reasonably well maintained, many of the condo board members are also residents, it's not too poorly built.
OK. What I did not count on was the noise (mistake number one). Even on the 20th floor if you have bus and jeepney traffic these morons will lay on the horns constantly, day and night. Live deep inside a village and away from a main road. Clashy noise is music to the Filipino ear. They will park for 15 seconds outside your building, blast their Mexican airhorns, and speed off before anyone (everyone) who heard it could possibly react to it's arrival. Near as I can tell the horns have no purpose beyond amusing the drivers. If you have window style aircons they will pick up all the outside noise and direct it inside.
So, mistake number two. Window style aircon units. Even if you replace the crappy single pane glass the noise will still wake you up early. Also, make sure the rocket scientists who design the building (if you have window style aircons) put them high up instead of on the floor. I have small fans in front of every aircon unit to direct the cold air upwards. Which adds to the noise and cost. The aircon above you may drip onto your aircon making a loud banging noise with each drop. All night long. Buildings are supposed to fix these things but you'll wind up being responsible for getting them to act no matter where you buy. Lastly, submit all requests to your building office in writing because the locals love paperwork even more than dried out fish and burnt pork. Demand a written reply. (you won't get one, and this is a good precedent to set should anything ever go to court).
Local electrical systems are not grounded and locally manufactured switches, outlets, and other electrical devices are garbage. Expect to replace everything. Be very careful when replacing. If you have computers or home theater systems you care about buy a high quality power / noise filter (or UPS) from APC. Use data center grade gear and don't skimp (do not buy any locally manufactured junk.) There are surges, brown outs, and extreme variations in voltages and frequencies. Until I put my computer rack on a decent standby power system and regulator, I lost power supplies and motherboards frequently.
I have broken the "don't bring a girl here, " rule on a number of occasions and have regretted it at least 50% of the time (mistakes 3, 4, 5, 6.). One girl (who I suspect may have been underage) became a stalker leaving me notes, letters, cards and sending crazy text messages. Another quickly made friends with the building guards (one was, of course, a distant relative) who (for a while) reported my comings and goings to her long after we were no longer an item. Others texting me "can I come over, " or just showing up. (much better to spend the night in my clean place, hot water, lots of food, fresh sheets, clean towels, someone to hug) then back in a bad 3rd world rental room shared with other 7 other girls. Again. Never forget that this is a poor country. Remember the best part of paying for it is saying goodbye when the transaction is complete!
OK. So you have bought a place because no one could talk you out of it. (or sending that girl money every month for the last two years). What's next?
Before you leave the USA (which is where I am from) sign up for Vonage. Get the device all set up and configured then toss it in your luggage. There is nothing like being able to call friends and family for the sanity check you will frequently require. They can also call you locally, which is good. Bring a good Uniden 5. 8 GHz base with extra handsets and batteries.
Get on eBay and order Medeco deadbolts (and extra keys). You'll immediately want to install locks the locals can't pick, drill, or make copies of keys. Don't buy a lock for your door (like one of those cool fingerprint jobs) that costs more than the average local makes in a month. Nothing you own or do should stand out.
Use Mon Cargo (on the west coast) to ship heavy stuff. Standard U-Haul 3x3 boxes are $50. 00 each with no weight restriction. They will go sea cargo so don't ship your pets or anything you really need badly.
I'm in the computer business, I have both PLDT DSL and Skycable. Highest speeds possible into a Netgear load balancer. If you require things like big hard disks, or a new PC. Buy it in the US and ship it as personal effects.computer equipment in the Philippines is about 6 months behind the rest of the world and usually broken or defective when you buy it as new. So load up in the US or Japan, and walk with confidence through "Nothing to Declare. " In almost 4 years of living here I have never been stopped. Don't bother shipping appliances or power tools, the Philippines is 220 VAC.
The American expat community here is small and very xenophobic. I almost never see other Americans while out and about. Figure out some way to get involved and meet people. You will get lonely, and the comforts of a pretty girl only go so far. Reach out with the understanding that you will need to work twice as hard to be seen as anything other than "that white guy. " When you do meet other white guys. Be very selective. Most people are here for a reason, if they aren't with a big US company or the embassy then they will be ex-military, selling bogus stock through illegal boiler rooms, or participating in other adventures you probably don't want much to do with. Lastly, whenever anyone asks me what it's like to live here I simply say "Imagine what Hong Kong would be like today if the British had turned it over to the Mexicans. "
Never forget. Bro's before Ho's!