I thought i might post up a new topic about Buying/Renting/Building/Leasing property in the Philippines, from my perspective, and what i have already set in place.
Ok so i personally own 5 Condo's in various locations, the law was that i could only buy into a building where the outright ownership must be at least 60% Filipino, i bought into all 5 when the buildings were already full, and each building was 95% Filipino owned, only a few foreigners owning in each building, and these 5 condo's are rented out month to month to Australian guys who visit the Philippines to sort out their marriages to their Filipino partners, as they usually need to stay for extended periods of time, and renting a condo is usually cheaper than staying in a decent hotel.
6 years ago i leased 30 small 3 and 4 room concrete/bamboo cottages in Palawan, the leases were for 20 years at a set rate per year, which can't be changed by the property owner, i then made some improvements to bring them up to a suitable standard for renting out to tourists from Australia through one of my businesses, i then offered these cottages rent free to widowed mums with kids , and they have full use of the cottages when there are no tourists staying there, when i do rent them out, they must provide 1 bedroom for the tourists, and also provide them with meals while they are there, i provide all food and supplies, and a small salary, this is covered by the rent that i charge the tourists, typical average occupancy is around 50% per cottage.
I also lease 6 beachfront lots (1,000sm up to 5,000sm) in 3 remote locations in Palawan, places that are not flogged to death with lots of tourists, i have a 25 year lease on all lots, and the owner had to clear the lots of pig pens and old shanties as part of the lease arrangement.
I am allowed to build my own cottages on those lots, and i will own those cottages outright, but i can't own the land, so far i have built 20 small bamboo cottages on 3 of the smaller lots, with another 40 to be built by the end of this year on the other lots.
Each one is 40sm with a bedroom, bathroom and a small verandah, which i rent to tourists for PHP1000 per night, and the tourists are provided their meals by the family who i lease the land from, and the tourists pay for their meals direct to the family, i just get the rent, however to comply with the local health laws and regulations, i did have to provide a small commercial kitchen in the family home, consisting of a few stainless steel benches and wall sheets, lino on the floor, 2 sinks for food prep, as well as provide a fridge and freezer, and hot water installed, cold water comes from tank water or via an underground spring.
The kitchens must be inspected regularly by the authorities and have the relevant paperwork stating that they comply with all the necessary health regulations.
After the 25 year lease is up, i can negotiate a new lease with the owner, if he does not extend the lease, the owner has buy the cottages from me at an agreed price, in my case it would be the construction cost only, which is now included in the lease documents, and if he will not buy them from me, i am allowed to remove the cottages myself and relocate them, and clear the land back to the way it was when i began the lease, however the issue with this arrangement will be that the cottages will be old by the time the lease is up, so regular maintenance will be required to keep them up to scratch.
Each cottage is built in a prefab format, so the floor and wall sections, plus the roof frame/trusses are built in one location by a crew of tradesmen and transported to the lot and erected on concrete stumps and tied down with steel straps, this was done to make it easier to dismantle if i ever need to.
If anything happens to me during the lease period, the leases will be signed over to another family member.
One final point i need to clarify, each of the Lots that i lease has a clear title with the property owner, something that everyone should check before leasing anything, as i almost came a cropper before leasing these 6 lots when i almost signed a 10 year lease on a lot without it having a clear title, if my lawyer had not called me when he did, i could have been in big trouble.
As far as my businesses are concerned, i operate one tourist business from Australia, bringing tourists into the Philippines and setting them up with all their tours, accommodation and other needs as required, and i run the tourist rental cottages through my partner, with most of these cottages being rented by the tourists that i bring into the Philippines, a few are rented by walk in tourists, as i don't advertise them on the internet.
I also have a 50% share (silent partner) in a few small eateries in a few tourist locations, all managed by the Filipino co-owners and employ local Filipino employees, i provided capital to set them up and the Filipino owner shares the profits 50/50 with me after bills and taxes are paid, it is based on 100% trust in the people who i invested with, and in 3 years i have never had any issues, the employees share the monthly tips, and also receive a bonus each month if the eatery meets a set profit margin during that month, so far only one eatery has not met the profit margin for only 3 months out of the 36 months they have been operating for, the rest are hitting the mark 100%.
If you look after the locals, they will look after you.
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Originally Posted by bridgyguy
From my experience second only to Palawan with regards to visiting.. but i have yet to visit Siargao Island..
