Buying Rental Properties - Some Tips

Buying rental properties can be a great way to build your wealth. However, as in most real estate investment, it is sometimes difficult to know if you've found a good deal - especially the first time. Here are some things to look for to be sure that rental is a great investment.

<P>1. Location. If traffic is heavier, rentals are easier to rent. A sign will often pull more response than an ad in the paper. If it is a nice locale, it will usually rent faster. This is also true of places close to amenities.

<P>2. Numbers. Run the numbers. Get every last expense figured into your calculations, and be sure that you will have positive cash flow from the start.

<P>3. High home prices. Look in towns with high home prices, as this creates rental demand. What do people do when they can't afford to buy? They rent.

<P>4. Low maintenance buildings. Avoid cedar-shake roofs, and wood-sided buildings. Look beyond current expenses to how much maintenance the building will need. Low maintenance means less headaches and more profits.

<P>5. Good rental history. Ask to see the rental history. Note how long residents are staying on average, and how well they pay on time.

<P>6. Below market rents. Buying rental properties with below-market rents means you get to raise rents. Raising rents means you imediately raise the value, because rental property values are based on income.

<P>7. Complies with zoning and fire codes. Have it inspected, and ask local officials if there are any problems.

<P>8. Less than 20 years old. This is somewhat arbitrary, but if you limit your search to newer buildings, you will be less likely to have building code and maintenance problems.

<P>9.Owner/manager that is out of state. These properties are often the best deals, because it is tough to manage a property from far away. An out of state seller is often more concerned with a quick sale than a high price.

<P>10. Neighborhood is stable or improving. Stable is okay, but if you can buy in a neighborhood that is improving, you'll rent the units more easily, and therefore get automatic appreciation in value with time.

Buy to Let Rental Property

Condotel Investments in the Philippines, Buy to Let rental properties are now being preferred to failing Pension Plans as more and more Filipinos and Overseas Property Investors look to the future and retirement.

20 Dollars a day for 6 years will buy you a Studio Condotel unit in the Philippines with a projected ROI through rentals of some 500 dollars per month after 3 years. With preconstruction property appreciating at some 20-30% per annum not only does the Real Estate Appreciation look good but the rental income is in excess of what many Pension Plans offer for the same or similar investment.

With many Overseas Filipinos and Offshore Property Investors looking to start saving for retirement, the Philippines with its comparative low cost of real estate yet high rates of Hotel Accommodations, make the Condotel investment an extremely attractive investment proposition.

Beth Collingz, International Marketing Director for PLC Global, a company specializing in Condo Hotel Sales and Investments in the Philippines for the Lancaster Brand of Condotels, said that many new investors are looking to replace failed pension plans and other future saving schemes with a solid investment in Real Estate.

“Many of my clients are looking for investments that will give them an income for retirement as an alternative to traditional private pension plans that have failed. Personally, I have always regarded Pension Plans as a glorified ‘Pyramid Scheme’. Most company pension plans are insufficient as are Government Pensions. Bank rates for Savings accounts are at record lows. Savvy investors are now looking for a more solid investment with potential for monthly income. Condotels in the Philippines fit the bill”

This potential, high rates of rental returns from Condotel Investments, currently from 8% up to 16% per annum, opens up a huge market not traditionally looked at by Real Estate Agents and Brokers whom all so often run around like headless chickens looking for normal residential profile “buyers” without looking at the by far bigger picture of investments, investing and retirement.

“We look at Condotels as pure investments. Not primarily as Real Estate. If you look at the Condo Hotel market as investing for future income, and think outside of the box, it is plain to see that Condotels are not only real estate investments but more importantly income generating property. Think of Condotels as a Managed Pension Plan. After all, Condotel units are fully managed property. The owner of the property does not have the hassle of renting out the unit and contend with all the normal pit falls of being an amateur land lord. This is taken care of by the Condo Hotel Management” said Collingz.

“One of my clients from Chicago, just purchased 4 Studio Condotel Suites at Lancaster – The Atrium Manila which is currently in preconstruction sales. His plan is to retire in the Philippines in 2012, live in one of the Suites and receive the Condotel rental income on the other three. His outlay for the purchase is only around 85 Dollars a day for 6 years by opting to purchase on a 6 year no prequalification, no down payment, no interest payment plan. Even before completing payment for the units, he will be receiving some $1,500 a month in rental income in additional to any Government or Private Company Pension Plan. Better yet, the rental income is in tune with inflation and buying on preconstruction terms gives real estate appreciation of some 60-80% over 3 years. As Hotel Rates increase yearly, so does the rental income”

Foreign Nationals are legally allowed to purchase as much as 40% of the total number of condominium units on the market at any given time. Overseas Filipinos and more and more foreigners are now emerging as a market for condotel units. Many or our clients are coming from different countries like South Korea, Australia, United Kingdom, Saudi Arabia and other parts of the Middle East,” Collingz said.

Lancaster - The Atrium Tower II [which is the second Tower adjacent to the existing “Sold Out” Tower I] is now accepting Reservations for Studio, One, Two & Three Bedroom Suites adopting International Standard Escrow Trust Account “Buyer Safe” Easy Secure Payment Plans… with 6 year interest free payment terms or up to 12 year “In-House” financing available, full condo ownership, no management costs for Condotel Suites and minimum monthly maintenance fees – “You really should take a moment to look at this Philippine Condotel Investment Opportunity” enthused Collingz.

All units at the Lancaster Suites have kitchen facilities. The standard unit price provides for the suite to be finished but not fully furnished. Included in the current price are the interior finishing’s such as tiled & fitted bathrooms, bedrooms with simulated wood plank flooring, living and dining area tiled floorings and lower kitchen cabinets/work tops installed. A complete optional extra interior fit-out package including appliances will be available towards the time the units are closer to being completed towards the latter part of 2009. Monthly condo dues are currently around 80 pesos/square meter of the unit floor area/month..

The Lancaster Atrium Suites are now available on the very affordable and competitive New Payment Plan that provides for Suites to be purchased on a No Interest No Down Payment basis with 67% of the payment payable over 60 equal consecutive monthly installments without interest and the 33% balance payable upon turnover of the unit or to be paid over an additional 5 years from turnover through our hassle free no prequalification “In-House” Finance Plans…

The current selling price [effective March 1, 2007] for the Lancaster Manila Atrium Tower A Tax Exempt Studio Units is Pesos 75,888 or $1,615.00 per sqm. The One Bedroom, Two and Three Bedroom Suites are priced at Pesos 84,994.56 or $1,808.80 per sqm including Government Taxes [R-Vat 12%]. Units may be purchased on a Six Year No Interest Charge Term of payment or longer term “In-House” financing plans. Turnover of units for Tower A will be from December 2009/2010

All payments will be made to the Lancaster Suites Manila Atrium Tower A Equitable PCI Bank Escrow Trust Account. It is anticipated, given the track record on sales of Tower I Units that property appreciation for initial buyers of Tower A Atrium Units will be at least 60-70% on turnover of units.

Beth Collingz

PLC International Marketing Networks