When you look at the list of wealthiest men in the country, you will notice that most of them made their fortune, or have interests, in real estate. Passive income, value appreciation, great returns, tax benefits – these are just a few of the reasons why investing in real estate is a good choice. Now the question is, “How do I get into this?”

Like in any other investment, it is best to exercise due diligence before cutting a check in the millions of pesos. Here are a few things you should know before you start spending your hard earned money on real estate.

The Right Location
When it comes to properties, the reason why you hear everyone talk about “location, location, location” is because it is a tried and tested rule. Location, more often than not, determines how much rent you can charge, what kind of renters you will have, and if the rent agreements in the location is seasonal, short-term or long-term.

If you are on the hunt for a profitable rental condo, look for a neighborhood near business hubs, good schools, public transportation, shopping centers, and other establishments. Condominiums with plenty of amenities also make your rental condo appealing to prospective tenants.

The Potential to Appreciate
Most properties appreciate a little bit over time. As an investor, you should be looking for a property that increases in value more than the rest. Choose the areas with high property value appreciation rate such as Makati, Bonifacio Global City, Ortigas Center, and Bay Area in Pasay. Industry experts also recommend investing in the fringe areas of established business districts.

Another thing to consider is the appreciation potential you can get from dressing up your condo. How much more can you charge for rent after repainting the walls, versus leasing it out as-is? How much will your condo be worth once you add a furniture or even another bedroom? You stand to earn more on your initial investment if you’re willing to upgrade your condo after you buy it.

A Safe Margin
A sound financial strategy on your real estate investment is a must prior to purchase. You will need to factor in the cost to maintain the property versus expected profits. Maintenance costs will include your monthly amortization, association dues, property taxes, insurance, and general upkeep.

While working on the numbers, consider setting aside at least 1% of the property value annually for maintenance costs and at least 2% for annual real estate tax. Set a goal of at least 10% return on investment.

Low Maintenance
Go for low maintenance investments. With several home flipping shows on TV, it is tempting to just buy a fixer-upper unit and go the DIY route. Unless you are an expert at large-scale home improvements though, this journey might cause you to spend too much on renovation and put your cash flow in the red. It would be better to purchase a condo that has a competitive price tag and needs only a paint job and few decors.

Similarly, short-term rentals, such as student dormitories and vacation rentals, may not be as attractive an investment. Because of the high turnover of short term rentals, you will need to spend more on maintenance to keep the rental usable and profitable. If you prefer a steady occupancy, low- maintenance condos in good locations are the ones that attract stable long-term renters.

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With the rising demand for condominiums for rent in the Philippines, renting out a condo is a good source of additional income. As with any other investment, a rental condo will not give you immediate big returns. Keep your expectations realistic and stick to the basics when starting out. Over time, your rental condo will prove to be a rewarding investment.

Looking for your next investment? Check out Federal Land, Inc. condominiums in the Bay Area and Ortigas.


Real estate can be a lucrative investment that presents opportunities to gain a steady stream of income. According to Colliers, Metro Manila is one of the most attractive real estate hotspots in Southeast Asia due to the high rental yield and strong demand for condominiums for rent.

While it is an appealing business venture, renting a condo is more than just advertising a lease and collecting rent every month. To be a successful landlord, you need to constantly learn and adapt. For first-time landlords, here are a few tips to get you started.

Know the rules
The very first thing you should consider is how freely you can rent out your condo. Some condominium communities will have no qualms about a bed and breakfast rental in their midst, while some communities can vet the lessees. Aside from the boundaries, you should also know the rules and regulations of the Homeowners’ Association (HOA) so you can lay it out to your tenants.

Target the right market
Will you be leasing your condo to families with small children, or to young professionals starting their careers? Before you decide on the price and the furnishing of your rental condo, identify your market first.

The location of your condo can help you define your target market. If your condo is within the university belt, then students and university employees are practically a captive market. If your condo is in a business district, you can offer your rental condo to young professionals, business executives, or expats working nearby.


Ask the right price
Like in any business, pricing should be on point. Ask too low, you lose money. Ask too high, you lose potential tenants. You want a price that will attract tenants and ensure a good profit.

There are several considerations to make in pricing your rental condo. First, consider the prices of similar units in your area, so you know what you will be up against. Whether you can match their rate will be based on how much you furnish your unit, your repair fund, and the fees of a property manager if you choose to hire one.

Spruce up your unit
Before you advertise your condo unit for rent, make sure it is in tiptop shape and more than livable. Check if all windows open and close properly, faucets don’t leak, and electrical wirings are safe. Then decide if you want to furnish your rental unit or offer it bare. Generally, unfurnished units are more affordable and get leased out quicker compared to more expensive furnished units. So depending on your target market, you can keep your unit sparse or fully furnished. For instance, if you are renting out to a small family, they may prefer to furnish the condo themselves. If you are renting out to students, however, you can provide bunk beds, study tables, and built-in closets to make your condo conducive to living and studying.


Advertise online
An eye-catching listing will attract the right client and help you stand out from other rental properties online. Post photos that highlight the best features of your unit and the amenities. Write an informative description that includes the unit features, list of amenities, and the nearby establishments.

Screen tenants
As a landlord, you take the risk of a tenant messing up your unit, disregarding HOA rules, and missing monthly payments. To avoid stress, choose a tenant that is responsible and tidy. Create a checklist of all the qualities you want in a tenant and use it as a guide when meeting with potential renters.

Ideally, conduct a thorough background check on all potential tenants. Ask for IDs and call the previous landlord to probe how he/she is as a tenant.

Write the contract
Before you rent out your unit, you will need to prepare an official lease agreement. Your lease agreement should clearly define the duration of the lease, the terms of the monthly rent and initial deposit, and the responsibilities of both landlord and lessee. The contract should also plainly state all your house rules and reasons for eviction or pre-termination.

Depending on your condominium administrators, you might need to secure a permit prior to renting out your condo. Attach the leasing permit to your contract, together with the Proof of Ownership, the Official Receipt and Tax Registration, and a list of inclusions as an annex.


Build a network
When your tenant calls you about a leaky faucet or burnt-out light bulb, you should have a handyman lined up to do repairs. Unless you are willing and capable to handle the maintenance yourself, it helps to have a network of trusty plumbers, electricians, and repairmen you can turn to when the need arises.

Manage the finances
You might want to open a bank account solely for your rental business. This will help you see how the cash flow is going, especially the income and the expenses. For instance, the two- month advance and security deposit you required may cover the unpaid rent and the repair damage. Once the tenant vacates your condo, you will have to return the deposit less damages incurred.

Nurture a healthy landlord-tenant relationship
Since you are practically letting a stranger into your property, establishing trust is important. As a landlord, you must reach out to build a healthy landlord-tenant relationship. Respect each other’s time and learn to compromise every now and then. Mutual respect and professionalism are the keys to smooth tenant relations.

Undoubtedly, renting a condo is a great additional source of additional income. With the rising demand for condominiums for rent in the Philippines, anyone can be a landlord. Like any business endeavor, however, leasing out your property requires a whole lot of planning and commitment. Take precautions when starting as a landlord. Over time, your condo rental will prove to be a rewarding investment.

Want to invest in a condo for rent? Check out Federal Land condos in the Bay Area and in Ortigas.