Condominiums make great investments. You can start a condo rental business to accommodate those who want to live near the city so they can be near their family, place of employment, or other important locations.
What is a condo rental business?
A condo or house rental business offers a reliable source of revenue with no time commitment, unlike many other small businesses.
You can establish a condo rental business in the Philippines, specifically in Metro Manila, if you have a significant interest in condo rentals in the country or in a specific area and have the money to purchase several units. For starters, they provide conveniences that contribute to a comfortable way of living. You can satisfy the housing requirements of those families who choose contemporary living in a condo development with lifestyle facilities and urban conveniences in this way.
Why it’s Good to Have a Condo Rental Business
Due to rental yields, demand for condominiums in Metro Manila will remain high.
Filipinos are now beginning to prefer the convenience and distinctive lifestyle that high-rise condominiums offer, thanks to their increased purchasing capacity as a result of the country's rising economy, especially around Metro Manila. This is clear from the brand-new developments that both end-users and investors are taking advantage of that are popping up all across the nation from fresh and seasoned developers. The majority of Philippine real estate developers also have the best locations for their condo unit developments, making them a good option for young professionals and young adults. The chance for consistent income that condo rentals can offer is another significant benefit that should not be overlooked.
High occupancy rates
Particularly in the Philippine condo unit market, vacancy rates have decreased due to the high need for rental properties. This means that, if you play your cards well, you as a landlord won't have to worry as much about your rental property units sitting empty for an extended period of time.
When you have paid off your mortgage in full or just want some additional cash, renting out rooms in your home is a terrific way to generate passive income.
Condo Rental Philippines: What to Consider
How do you choose which properties to invest in when there are so many options? Think about the place first.
Location is the most crucial consideration for those who wish to rent a house or condominium unit out of all the other variables they take into account. It should be located where people would truly want to live, which is what you, as an investor, want your property to be. To optimize returns, you want your property to be in an area where the population is expanding. Consider Metro Manila's cities or highly urbanized areas.
In order to reduce travel time to a workplace or places of recreation, it should offer convenient transportation alternatives, have reliable infrastructure, be surrounded by shopping, service centers, and other conveniences, or even be located in business districts. Find a location near establishments or business districts.
Be extra careful with your finances. Choose what you can afford.
Building your own condo rental company requires a greater budget due to a variety of considerations, such as the cost and availability of labor, materials, location, and more. You'll need finance if you wish to profit greatly from your business.
If your budget only allows for one condo unit, you might want to save up more cash or apply for a loan before putting all of your money into a condo rental business. On the other hand, if your budget is higher, you can decide to rent out more apartments or rooms. Additionally, if you have a lot of budget, you can improve the appearance of your condo for rent to attract potential renters.
You have the authority to place restrictions and establish boundaries since it is your property.
If you have the time and energy, running your own business is preferable since you can keep all of the profits for yourself. To avoid problems with a potential renter, you must first be informed of the legal requirements for renting out a property as well as tenant rights. Additionally, it will defend the owner or landlord.
If you choose to do this, carefully prepare a lease agreement that your tenant must sign in order to resolve any misunderstandings that may have arisen during your negotiations and to help your tenant understand your expectations.
Paperwork and Documents
Make sure you obtain any official documents—building permits, clearances, etc.—from authorities who not only meet the requirements but also possess the necessary authority.
In order to start a condo rental business in Metro Manila or anywhere in the country, you must correctly register your company. The Department of Trade and Industry (DTI), a Philippine government agency, is where the condo rental company should register if the building is already built. There, it will be mentioned what type of ownership the company is under and how much the condo for rent is.
Once you have the necessary funding and legal title to the property, construction can start as soon as possible.
Tips on How to Start a Condo Rental Business
Learn property management.
Prospective customers can't resist a well-maintained unit. You could evaluate the condition of the properties by performing rental visits or occasionally checking in on your renters. Make sure that your lease agreement specifies who is accountable for what.
You can keep track of maintenance duties that need to be carried out regularly or yearly by using a routine maintenance checklist.
Put value on amenities and aesthetics.
You have to stand out from the competition in the condominium leasing industry by emphasizing aesthetics and amenities. Invest in painting and furnishings because this will give you an advantage over other apartment businesses. If possible, try to offer Wi-Fi that can flow quickly. Additionally, the rental price that you may charge your renters will be greatly influenced by the style, amenities, and services of your unit.
Do the math.
Establish the rental fee you must charge for your apartment. To get a good idea of how much you should charge for monthly rent in your condominiums, it is best to look at the rental rates of other similar properties and surrounding condos. The furniture you put in your apartment must also be taken into account.
Run the numbers once you have a specific property in mind. To evaluate the possible returns from rental condos, wise investors employ a variety of metrics. This might include some or all of the following factors:
- Gross rental income
- Loan-to-value ratio
- Net operating income
- Operating expenses
- Occupancy and vacancy rates
- Internal rate of return
- Appreciation and rent growth
Spread the word.
Finally, you should spread the word that you are starting a condo rental business in the Philippines.
Your network and connections will make it possible to establish a relationship with potential new tenants. The majority of landlords view recommendations as a beneficial tool to discern between good and bad tenants, so they are usually wanted.
Advertising is another option. You can use social media sites to market your condos. This will widen your reach and raise your property's profile, assisting you in finding a tenant more quickly.
For more information on Vista Residences, email [email protected], follow @VistaResidencesOfficial on Facebook, Twitter, Instagram, and YouTube, or call the Marketing Office at 0999 886 4262 / 0917 582 5167.