Investing in Makati Properties- 3 Best Investment Types That Will Raise Your ROI
One of the fastest growing investment options in Makati is real estate. There are several types available such as residential, commercial, industrial and land. Real estate is a major driver of economic growth and provides great opportunities for return on investment (ROI).
Owning property-rights gives you not only the title of ownership to the land, but also provides right to make improvements, the access to water, oil and minerals, with the enjoyment of the flora and fauna found in the region.
However, investors need to be wary of trends, quirks and fluctuations in the real estate market to avoid potential risks.
Is it worth investing in Makati?
Known as the “Wall Street of the Philippines,” the City of Makati (its official title), is part of Metro Manila. It is a Class #1 urbanized city, and financial capital of the country, with some of the world’s leading banks, corporations, retailers and foreign embassies located here.
It’s the country’s richest LGU (local government unit), with 62,000+ registered businesses. Residential property-buyers usually look for homes close to workplaces.
Land-values are higher in Makati than most Metro Manila cities, with CBD rates increasing by 5.09% YoY. Premium residential property in Makati commands PHP 151,323/sq m, making it a high-value investment, showing positive trends.
Makati Development
Earliest developments in the area were made by Spanish colonizers. It was also the center of resistance against colonial rule. Following the Spanish-American war in 1898, the region was ceded to the US and incorporated into the Province of Manila.
In 1914 the name was changed from San Pedro de Macati to Makati. Real estate values boomed after WW2. Makati became a financial hub in the 1960s. Improved health care and infrastructure have driven property-values upwards, along with the launch of several mega-projects.
Today it is the richest city in the Philippines, with the highest GDP. Studies show that residents feel that their taxes are used wisely. Major developers report 20% average ROI, with rental and land values on the upswing.
3 Best Investment Types
Condominium: According to data provided by the big-name real estate brokers, condos located in the city’s prime locations have high ROI value. Prices in areas like Greenbelt have appreciated by more than 100% since 2003. Other areas like Park Terraces have appreciated by 50%.
Location is a prime driver, but rising prices are also driven by high demand. Makati residents prefer to live closer to their workplaces in CBD due to traffic woes. Many condo developers also target certain specific customers and build in terms of size, facilities, amenities, services management etc. Quality of construction is also important in ROI.
Apartment: is different from a condo unit which can be bought individually, whereas an apartment block is usually owned by a single person who rents them out separately. If you’re planning to invest in an apartment block in Makati, you can be assured of rental income ranging between PHP3000-10,000 per month based on location and amenities.
Apartments in Makati are more common in the residential suburbs and not very popular among those working in the CBD. However, they’re generally larger than condo units. Condo owners have to pay individual maintenance costs while apartment owners have to pay for the entire block.
Villa: Though buying land by expats/foreigners is disallowed in the Philippines, a good property lawyer can provide information on purchasing. It’s also possible to purchase/lease a villa without getting rights to the land.
This allows you to make improvements and utilize the space better. When you decide to sell, you can be sure of getting a higher ROI mainly due to the lack of available residential space in Makati.
Great options are available in Makati’s “villages” (gated communities), exclusive (and expensive) villas in Greenbelt, Legaspi and Salcedo villages in the CBD etc. Many are interconnected, by-passing Makati’s notoriously difficult traffic-jams.
Few Bonus Tips to Make Your Investment Safe
1. Know your target market: While buying a condo/apartment/villa, consider who your typical next buyer or renter would be. This helps you make the right decision.
2. Research market trends: Though the real estate market is quite fickle and can swing from one location to another without obvious reasons, it’s good to understand trends and directions.
3. Research the developer: while investing in condos and apartments, especially if you’re purchasing during the pre-selling/construction phase. Timely delivery, quality of construction, overall look, amenities, public spaces, connectivity, etc are crucial.
4. Long-term planning: “Flipping” is a get-rich-quick strategy that may not always work. Leveraging long-term values is safer/smarter.
Conclusion
While making the decision to invest in Makati properties, it’s wise to thoroughly understand the pros and cons of each property type. Condos, apartments and villas each have their own value, advantages and disadvantages.
You also need to do independent research and keep yourself updated with current trends to leverage the best ROI. Investing in property provides great opportunities to earn a passive income, but there are serious risks involved too.
Protecting your assets is crucial. That’s why it’s wise to get the help of an experienced, professionally qualified, local expert or firm before you sign on the dotted line.
Author Bio:
Shaz is working for various real estate websites, including FazWaz. He is a talented writer with extensive knowledgeable in the Philippine real estate industry.
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