Immigrants investing real estate properties in the philippines

I recently attended a webinar that aims to lure Filipino immigrants and former Filipino citizens living in the US to buy real properties in the Philippines. It portrays our country as the best place to grow your money, earn passive income and one of the best vehicles to save for retirement. Even in Cebu it doesn’t take a second glance to see the booming real estate industry.

I don’t have any problem with your spare money spent on something worthwhile such as real property. It’s one of the best investments you can make. You just have to be smart about it and deal only with reputable companies. A friend called me last week and asked for help pertaining to a real estate matter in the Philippines. He purchased a one-bedroom unit in Manila and was prompt in remitting his monthly payments. However, his employer in New York closed down due to COVID-19, leaving him unemployed. His investments in the stock market were all wiped out and his savings dwindled. He notified the developer of his financial hardship and that he no longer desires to continue his purchase. He is likewise asking for a refund of payments previously made. To his disappointment, the company is still billing him every month and the representatives are giving him the runaround on his refund request.

There are some lessons to be learned here:

1.) Make sure you read your contract if it allows you a way out if you suffer unforeseen circumstances like extreme financial hardship, health issues, or medical emergencies that prevent you from making additional payments and probably get some or all of your money back.

2.) Study the market well, including the present country’s condition. These developers and real estate companies will paint a rosy picture on how good the Philippine economy is. Make your own independent study. Compare the values of your present investments with what they’re offering. With the economic impact of this pandemic, weigh in the pros and cons in investing at this time.

3). Make sure the real estate company has a presence in the US. All these agents come to the US, make sales presentations, close deals then leave. You’re then left to fend for yourself as to how you send your documents and future payments. You have to find your way around an administrative maze in the Philippine office of that company if you have concerns. Ask the company if they have an office dedicated to address on non-Philippine resident purchasers.

4.) Don’t be easily lured by the low downpayment and the low monthly payments. This is only limited to a specific period or once you have reached a certain equity level. After that, you have to secure financing with a Philippine bank. Ask the agent how to go about these procedures and if other fees are involved.

5.) Prepare your own exit plan. If time comes you no longer need the property, you’re downsizing, or want to sell or even donate the property to your family, or in the event of your death, you must have these scenarios already mapped out. Appoint an executor, sign a power of attorney, make a will and have those documents legally and validly executed. Declare your ownership of these properties and if it’s earning income, consult with your tax attorney on implications.

Investing in real estate is still one of the lucrative ways to expand your wealth. Do it wisely.