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8 Tips for Running a Successful Airbnb Property

9/26/2022

52 Comments

 
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The short-term home rental platform Airbnb has grown popular over the years among travelers as an alternative to hotel accommodation.

Established in 2007, Airbnb, also an abbreviation for “air mattress bed and breakfast,” has skyrocketed to over 7 million Airbnb listings worldwide in 2022, according to stratojets.com. It is now present in 100,000 cities and 220 countries and regions with 2.9 million hosts.

The Airbnb success story is rooted in the unique way it connects the Airbnb host and Airbnb guests, offering the latter a deeper travel and local cultural immersion than what a hotel room can. It also provides Airbnb guests a range of lodging options since a rental property can be a big house, a studio apartment, sometimes even a yurt or a tiny house.

Short-term rentals and home-sharing demand also increased since the pandemic brought about the work-from-home set-up. With the rise of digital nomads, Airbnb has been hosting guests from beach fronts and near mountains. 


The Airbnb Business Opportunity

In the Philippines, Airbnb hosting has become a lucrative means to earn passive income especially among OFWs, millennials, and retirees. Anecdotes from Airbnb hosts in the Philippines say that monthly income for Airbnb rentals can range from 20,000 PHP to 40,000 PHP a month, depending on the location of your Airbnb listing. It can go higher for Airbnb a rental space near tourist attractions like the beach.

According to a survey by Philstar.com, Airbnb hosts this 2022 are able to allocate their earnings to cover food and necessities which have increased dramatically in the Philippines due to inflation. In the same survey, nearly “two out of five Airbnb hosts said they host to earn extra income to make ends meet, while over 50 percent said they host to earn extra spending money.” 60 percent responded that they also host to earn extra income to grow their Airbnb business. 

Whether you're still deciding on renting out your spare room or just listed a property you just invested in, here are useful tips for running a successful Airbnb property.


1. Compute, compute, compute.

Remember that the main goal of a successful airbnb business is to profit from your rental property. The first order of business of any Airbnb host is to sit down and run the numbers. Compute your mortgage, rent payments, monthly utilities, Airbnb fees, taxes, etc. You may only begin setting the price of your vacation rental property once you determine your overall expenses.
Be sure to compare your rental property to other nearby hotels in your area and not other rentals. This is because potential guests looking for accommodations will begin searching websites that will first show hotel prices of the surrounding area. If your Airbnb property goes lower or on par with hotel rates, you will likely be attracting guest looking for lodging with friendly and competitive rates.


2. Educate yourself about your city's local laws

Another essential pre-work of any Airbnb host is to research and educate himself about the local laws for short term rentals. Knowing the rules before you play is a good foundation of a successful airbnb business. Does the city require a business license or business permit before running a vacation rental? Is there a limit to how many nights per year you can rent your property? Is there a limit to how many guests can stay at a time in your rental property?


3. Work hard on your Airbnb listing profile

To run an Airbnb business successfully starts with a catchy but accurate description and details of your Airbnb property. Your listing description should include how many rooms and bathrooms can house potential guests, what amenities are available to use, are there nearby places of convenience and attraction, how many vehicles can your parking space accommodate?

It would be good to mention the main highlight of your Airbnb property (does it have a great view of the lake?) as well as the quirks (do future guests have to pass by a construction before reaching your Airbnb property?) so your guests feel safe and secure in their future stay at your Airbnb residence. A successful host always practices transparency to show they care.


4. Furnish Within Your Budget

Successful Airbnb hosts are great at attracting guests with unique accommodations with Instagram-worthy interiors. Part of the labor and fun of putting up an Airbnb property for rental is being able to decorate your rental space like your own home. That said, try to maintain a budget when shopping for furniture. A good practice would be to shop for furniture from second-hand stores or searching online for great deals. Guests are sure to appreciate a cozy home but that doesn't mean you have to break the bank. Furnish affordably.


5. Have a go-to cleaning service

Approach your short term rental business as a complete hospitality business. This means the cleanliness of your Airbnb property is top priority. When in doubt, hire a reliable cleaning service who can diligently come after guests checks out.


6. Work towards improving your host and property rating

Prospective guests rely on positive reviews when picking out a property to rent. Great reviews go a long way so make sure to work towards this. Get started by offering freebies and discounts to your guests in exchange for an honest review. Once you've collected great reviews as a host and good reviews about your property you will easily accrue those five star ratings and improve your search ranking.


7. Always be responsive to guest queries

You job as Airbnb host means committing to your guests. A huge responsibility of running a successful airbnb property is being able to respond to your guests quickly whenever they have queries and being able to quickly address any concerns they have. Other guests may be demanding more than others but as Airbnb host, you have to be able to make their stay comfortable. This will likely make you reap positive reviews.


8. Give the full Airbnb experience

Guests put value in the details Airbnb hosts put in their home. Stocking the pantry with essentials and cleaning supplies will be highly appreciated. Providing board games, books, movies, and entertainment options to ensure guests stay comfortably in your rental will go a long way. Make sure to provide condiments, coffee, tea and basic appliances. A good host will always go the extra mile to add in a free bottle of wine or a basket of goodies to thank their guests for choosing their property.


Key takeaways: Once you find your rhythm in being successful host, you can always expand your Airbnb business and make it a full-time job. Hosting is undeniably a great way to earn income if not more money. It is also a good way to expand opportunities like encouraging more travel of your own through the connections you make with guests.
Check out these properties for sale that are great for Airbnb rentals:

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2 Bedroom Condo in Grand Midori Makati PHP17,000,000

1 Bedroom Condo For Sale at The Residences at Greenbelt PHP22,900,000

Browse all our listings by City:

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BGC | Fort Bonifacio

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52 Comments

List Of Documents To Prepare Before Selling Your House In The Philippines

9/22/2022

5 Comments

 
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Decided on selling your real estate property in the Philippines? The process that lies ahead entails meticulous preparations and patience in familiarizing yourself with the steps. Like any legal matter, selling a real estate property in the Philippines requires securing legal documents and enduring many trips to government offices such as as Registry of Deeds' office.

But a committed property owner must follow the right process and make sure the necessary documents such as tax declaration, transfer certificate of title, condominium certificate of title (if selling a condominium unit), real estate tax clearance, transfer certificate, etc. are ready before handing the real estate property to a new owner.

Part of ensuring a smooth and safe property selling transaction is also seeking the help of a real estate broker who can make things less overwhelming for you and a property buyer. This will also ensure a headache-free process for both the property seller and their prospective buyers.

To kickstart your preparations, here's a helpful guide that maps out your journey as a seller and a list of the important documents you need to sell your property in the Philippines.


First thing's first:

Make sure your documents as current property owner are complete. As the current property owner, your responsibility as seller is to be able to have the property, along with the documents of ownership, legally transferred to the new owner's name. This will not be possible if the seller does not possess a complete set of these necessary documents:


  • Certified True Copy of Transfer Certificate of Title (Land)
    This can be obtained from the Registry of Deeds - City Hall


  • If you are transferring a condominium unit and condominium parking, make sure to have the following:
    - Certified True Copy of Condominium Certificate of Title (Unit)
    - Certificate of Ownership (along with the condominium parking, if applicable)

  • As a property owner selling from overseas, make sure to prepare the following documents:
    - Special Power of Attorney if a representative will be signing on your behalf
    - Deed of Assignment of Rights (in the absence of a title for pre-selling a real property, check with your property - developer if they will permit this)
    - Contract to Sell from your property developer
    - Most Recent Statement of Account


Second order of business:

Update or Fix the Status of Your Property TaxesGain the confidence of your buyer by ensuring that you consistently fulfilled your tax obligations. You and your broker must procure the following tax declaration documents from the assessor's office:
  • Certified True Copy of Tax Declaration (Land)
  • Certified True Copy of Tax Declaration (Improvements)


If you are selling a condominium to a buyer, make sure to procure and prepare the following tax declaration documents for your condominium purchasers:
  • Certified True Copy of Tax Declaration (Condominium)
  • Certified True Copy of Tax Declaration (Condominium parking, if applicable)


Among the legal documents a seller and a broker must also procure are the:
  • Real Estate Tax Clearance for Current Year- this can be obtained from the City Treasurer's Office
  • Certificate of Non-Improvement if property is bare and without structures such as a house or a building


It is important to note that apart from updating taxes, an owner providing complete tax documents must also inform their LGU of any improvements or changes done on the property subject. Otherwise, undeclared changes on the property will be subject to back taxes.




The third step:

Know your expenses by determining the tax applied to your property.

Good job procuring all the important documents needed for your potential buyer! Now comes another important part of your selling journey: determining your net profit by computing your biggest expense: taxes!
  • Capital Gains Tax: This is the income tax levied on the profit gained from selling a property. These are properties that are non-trade or business like homes, land, and cars. A capital gains tax is always 6% of the property’s gross selling price or market value, whichever is higher.
  • Ordinary Assets Tax: Income-generating properties are classified as ordinary assets. The ordinary assets tax is 6% of withholding taxes, plus income tax, 12% VAT, and documentary stamps tax.

Taxes aside, it would be wise to deduct your other expenses from your profit. This would include a real estate agent's fee, marketing collaterals for printing, and fee for a professional photographer to take photos of your property if you are selling our property online.

The fourth step:

Ready the after-sale documents of your property prior to turning over to your home buyer.After securing a sure buyer of the property, the seller and the broker must prepare these essential documents:
  • Letter of Intent from the Buyer or Offer to Buy

    The letter of intent is the first document the buyer sends to the property vendor expressing an intention to buy the property for sale.

    This letter includes a detailed information about the sales terms such as the time of sale and description of the property, current market value of the property, earnest money (this is provided as means of holding the property subject to the buyer's due diligence), and other terms and conditions. This should be signed by the broker and the buyer.

  • Contract to Sell

    These documents contain written agreements between the seller and you with respect to purchasing your house. There are specific sales requirements required of both sellers and buyers prior to completing payment. This contract is only for homes where there was a down payment to pay the remainder.

    If the sale contract is properly executed, the sale contract becomes the basis for execution of the deed of absolute sale confirming the completion of the sale. This will be arranged through the broker or the developer. After a buyer is fully paid, a sale agreement is drafted by the developer to the seller.

  • Deed of Absolute Sale

    The Registrar's Deed of Trust is the final record transferring the rights of the property to a new home buyer. This will provide a certificate of ownership for houses or lots or condo-related property in exchange for a condominium owner certificate for the new owner.

    If a buyer makes a complete payment upfront, you'll receive a letter of credit on your mortgage. The documents could be produced either by the buyer or the seller but must be prepared by a notary public.

  • Endorsement Letter

    This is given to the property or condominium property administration endorsing the property to the new owner's name.

  • Certificate Authorizing Registration (CAR) from the Bureau of Internal Revenue (BIR)

Key takeaways:

When selling a property in the Philippines, it pays to know the documents required. Having your land title, tax clearance, and tax declaration documents on hand makes life easier for your broker and lessens the risk of losing the interest of buyers.

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How To Prepare Your House For Sale (so you can make it sell fast!)

9/19/2022

1 Comment

 
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All sellers naturally aim to make sure their house sells quickly. Of course, this is only possible with luck.

To sell a home fast and for as much money as possible requires laborious preparations such as hiring professional cleaners to take out all the clutter of the entire home, maybe applying a fresh coat of paint to the interiors, repairing light fixtures or the front door, and everything to prepare your home to attract potential buyers. 

To impress buyers, they have to believe that your home for sale is their best possible future home. Every careful change you do, like adding storage spaces or altering architectural details, will have a significant impact in the decision of prospective buyers.

Here’s a helpful guide on how to prepare your house for sale.


1. Purge and Pack Up Your Personal Things

The first order of business to prepare your house for sale is to purge and pack your own belongings. This can be a daunting task especially if you have a big house with plenty of furniture or personal items like family heirlooms to gather. But it can be done by staying organized and giving yourself a comfortable timeline.

It is recommended to go through each room in your home for sale and sort out which items you will keep, throw out or donate. You can even make more money if you decide to sell items through a garage or front yard sale!

Make sure to secure important items such as personal documents and family photos first. You don't want potential buyers to take possession of your own belongings once you totally vacate your house. Make sure to pack your stuff in safe moving boxes too and label them so they don't end up getting lost in the process of decluttering.


2. Depersonalize and Deep Clean Your House

Before showing off your house to sell to potential buyers, it's important to deep clean and remove any decor or item that will reflect many memories of your own or your family's presence. If you still have some loud furniture on the front porch or a quirky centerpiece lying on the dining room table, this could hinder your potential buyer from envisioning the house as their future home.

Remove any distraction such as scuff marks and and allow them to freely move around with little signs of your previous occupancy.

To prepare your home for sale, you must also ensure a deep clean is part of the process. This can be time consuming so hiring professional cleaners is great way to save time and get this out of the way. This will be worth it since most buyers put value in appreciate a well-maintained and meticulously cared for house.


3. Connect and collaborate with a credible real estate agent

Reaching out to a real estate agent is an important step to take as you prepare your home for sale. No one is more knowledgeable about the buying market or potential buyers than real estate agents. By seeking their expertise, a real estate agent can take a look at your house and determine what other preparations you're missing out on in putting up your home for sale.

Real estate agents are likely to have a list of contacts who can help in repairs of light fixtures or the master bed. Real estate agents can easily provide contacts to contractors, professional staging service, landscapers or even photographers to ensure that photos of your house that go up in websites have a homey feel.


4. Make necessary upgrades

To prepare your home for sale might take more than repairing the water heater. House upgrades can make a big difference in increasing the value and appeal of your property in the eyes of buyers.

While budget may be a concern, you can always choose certain areas of your house to make a room feel and look functional and livable.

For instance, a big selling point of a house is always the kitchen. This may require hiring professionals, but installing new light fixtures or upgrading the oven and countertops are a few steps you can take to spruce things up. Adding simple details like fresh flowers in your small rooms or ensuring that a generous amount of natural light is available in your rooms, can do more to impress buyers.

The exterior of your house matters just as much as the interiors. Set the tone before anyone steps into your front door by ensuring your front yard or front porch is welcoming. Don't also forget to work on the curb appeal of your home by upgrading your backyard with outdoor furniture and giving your exterior painting a fresh coat of paint.


Key takeaways: Staging your home for sale is a big task but with ample time for necessary preparations and working with a real estate agent, this endeavor can turn out a success!

Are you planning to sell your property? Let Futurespace Manila do all the selling.

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6 Things Your Real Estate Agent Wants You To Know

9/14/2022

107 Comments

 
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Deciding to buy a home or invest in a property is an exciting milestone for anyone. The house hunting process or the buying process however may involve decisions that will be made better with an expert by your side: a good real estate agent.

Capable and credible real estate agents will have the technical knowledge in real estate that will go beyond what real estate websites tell you. Having your own agent will make your house hunting experience or property selling process more efficient and productive. 

Of course, that goes without saying that clients like you, whether buyers or sellers, have to do their part, too. Here are a few points about what your real estate agent wants you to know to ensure a smooth and productive transaction.


1. List down your wants and needs in a property prior to seeking services of real estate agents.

Yes, real estate brokers have a broad knowledge of the local real estate market. But we won’t get anywhere unless you as potential buyers or as seller know what you are specifically looking for. Prior to seeking the expertise of a real estate agent, it would be best to note down your wants, needs, and non-negotiables in a house.

For example, knowing you have 4 people in your household will already give you an idea how many bedrooms or bathrooms you need. Taking time to consider what you value in a home will also help you save money ahead for the right house. Arriving at these things ahead will make it easier for your real estate broker to point you to your dream home at the right price.


2. Be decided on a location before seeking advice from real estate agents.

Do your real estate agent a favor by nailing down the location of the house or property you want to buy before seeking their services. Property location should be on top of your notes or list of must haves and it must align not only with your budget but as well as your lifestyle and future plans.

When deciding on location, consider its proximity to your work place, schools (if you have kids), and other places of convenience like the supermarket, malls, hospitals, restaurants, or major highways. This will save you and your real estate agent time from unnecessary site work.


3. Be flexible and collaborative with your chosen real estate agent.

Having your list of non-negotiables greatly helps real estate agents get you closer to the right house for the best price. But even the most experienced agents will need you to have a bit of flexibility too. If you have a long list of requirements, the right house might be impossible to come by.

Prospective buyers must be collaborative and open to pitches by real estate agents. Clients must be able to compromise their budget and be open to the available properties in the current local market. Otherwise they might miss out on good price negotiations or properties that other agents might not be able to offer.


4. Your real estate agent appreciates honesty and welcomes your property-related questions.

Agents are not just about selling a house and closing sales. Their happiness, whether as a buyer's agent or seller's agent, is being part of their clients' success in the selling process or landing a good house deal. Agents and realtors genuinely want to help their clients.

To make this possible, a seller needs to be 100 percent honest about the issues of the property they are selling from plumbing repairs to electrical problems. This will help a real estate agent move forward and market the property better.

A buyer, on one hand, must be comfortable with asking their own agent any for additional inspections, or questions about the history of the property or house. Any agent will be happy to satisfy a buyer with their concerns if it means simplifying their house hunting process.


5. Maximize the expertise of real estate agents but keep in mind that they don't receive pay from buyers.

You can retrieve information such as the best property listings or fun facts about the neighborhood of a house your are eyeing from real estate agents. As your broker they are also expected to offer good price negotiations.

A lot of things are under the scope of work of real estate agents and you can trust that they prioritize making your house hunting process or buying process a worthwhile experience.

But as clients, remembering that while agents have a lot to offer, they are also only paid by a buyer when they get a commission out of a sale. Simply put, even if agents take a buyer house hunting to 50 different properties, a real estate agent still won't receive pay for the time and effort he or she put in.


6. Real estate agents need work-life balance, too.

The job of an agent is not limited to taking their potential buyers to house tours. As someone in the business of marketing homes, real estate agents also dedicate their working hours to researching property listings, doing site work, negotiating with other agents, collaborating with sellers, scheduling countless appointments, answering emails and messages from clients while trying to keep their personal lives too.

Clients often forget that even though agents do not have the typical 8am to 5pm job, they also have their personal lives which means they are not available for a sudden appointment or call 24/7.
​
Buying or selling a property is definitely an ordeal that will need the expertise of a real estate broker. To make the process efficient and worthwhile, make sure to keep these six pointers in mind.


FAQ

What are the three most important things in real estate?
The three most important things in real estate when investing in a property is location, location, location.

What is the most important quality in a realtor?
The most important quality in a realtor is honesty, transparency and integrity.

What personality type makes a good real estate agent?
​The personality type that makes a good real estate agent is having a problem-solver mindset, being a team player, being honest and transparent, and having understanding of the local market

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Pros and Cons Of Buying a House And Lot VS a Condo

9/12/2022

5 Comments

 
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Nothing is more fulfilling than having the resources to invest in your dream home. Deciding however on the property type to buy is one of the biggest decisions you have to make prior to investing. 

House and lot or condo unit? That is the ultimate question! Weighing which suits you best⁠, whether a condo living or traditional house, a homeowners purchase boils down to personal preferences. 

Do you see yourself in a peaceful neighborhood away from city living? Or right smack the vibrant urban living in Metro Manila? Will you be accommodating families that require a larger spaces or is a single family house in the suburban areas ideal for you?

Personal finance aside, arriving at the right property requires careful consideration of your present and future lifestyle. Condo or house? Look beyond the price first and be guided by this helpful comparison.

Pros Of Buying A House And Lot

1. The Luxury Of More Space 

Unlike condo owners, people who go for house and lot properties will generally possess more space be it outdoor space and more storage space. A larger interior will definitely allow spacious bedrooms, living rooms, bathrooms, and provisions for a laundry area or even a dirty kitchen which pales in comparison to the restricted space of a condo property.

2. Total Control Of Your Living Space

Having complete and exclusive access to a property comes with the benefits of purchasing a house and lot. The freedom to customize your own living space at any given time is a great way to maximize an investment property. Having a house and lot puts one at an advantage of repairing, renovating, or even expanding whenever you or your family see it right.

3. Complete Privacy

Having your own house and lot grants you total privacy and exclusivity to a property that condo dwellers do not enjoy. A detached house means not sharing a common wall or floor or even outdoor space with other condo owners. You are free from condo rules too which make you master of your own property.

You can have all the social gatherings you want since homeowners usually live away from each other. Of course, condo residents have to be conscious of not making too much noise so as not to disturb other condo owners.

4. A Better Long-term Investment Than Condo Units

Owning a house and lot can turn out to be a better long-term investment than choosing a property in a condo building. The house or the structure may depreciate, but the value of landed properties will appreciate over time, especially ones located in prime locations like Makati City or Mandaluyong City. A house and lot is definitely a lifetime asset you can pass on to your family’s next generation.

Cons Of Buying A House And Lot

1. Costly Property Maintenance

Unlike condo living that comes with its own building maintenance, a house and lot ownership comes with all the maintenance work that you will be completely responsible for. Having total control of your own house entails not just paying housing amortization or monthly utility bills. You also have to take charge of the upkeep of your house's exterior maintenance and interior repairs.

2. High Utility Expense

A house and lot occupies a bigger space which will definitely cover more utility bills unlike in condo developments where you share condo complexes with other condo owners. Naturally water and electricity consumption will be higher for a house and lot.

Pros Of Buying A Condo Unit

1. More Affordable House

Unit owners of condo projects opt to purchase condos because they are less expensive than purchasing a house and lot. House and lots in prime locations like Metro Manila, compared to condominium projects, are a lot more expensive. Condo life makes owning a home a lot more achievable. Many opt for condo ownership due to the low maintenance lifestyle it brings.

2. Wide Range Of Amenities

Condo ownership includes a wide range of amenities. Most condominiums come with a swimming pool, gym, and function rooms which association fees cover for condo unit owners. You get a bang out of your buck even by just owning a studio unit.

3. Strategic And Convenience In Location

Most condo dwellers opt for the condo life because most projects are built on desirable locations such as in central business districts in urban areas. Living in a condo grants you the convenience of access to commercial establishments or fitness centers. Some would even have convenience stores of their own. Most work places could be walking distance from a condo.

4. Low Maintenance

Having a condo for a home means putting less time and effort in maintenance since your jurisdiction relatively covers only the living space or interior space of your condo. It is the condo's administration who is in charge of the upkeep of the property.

Cons Of Buying A Condo Unit

1. Fees, fees, fees.

Association fees on top of monthly mortgage payment are collected from condo residents to cover operational and maintenance costs of a condo building. Between a condo or house, condos tend to cost more due to the collection of monthly membership or parking fees. A condo dweller also has to pay RPT or real property tax every quarter or year as well as his or her share in areas and the land where the condo stands on.

2. Restricted living space.

Condos tend to offer less space to its owners. A condo studio unit in business districts in Metro Manila can be as small as 20 square meter. A condo owner only has the interiors as his own space and will have to share the outdoor space and amenities like swimming pools with other unit owners.

3. Less freedom
Living in a condo generally disallows home extension projects which house and lot owners can take up anytime they want to. Prior to home renovations a condo owner has to seek permission from the condominium's property management office. Condo rules can also restrict owning pets and other house rules.


Condo or house, deciding on the right property type boils down to what you value you most in a home and which one defines a quality life for you. No matter what you decide on, carefully weigh your long-term goals including where you want to retire or if having a family is something you see yourself in.

Buildings

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FAQs

Which is better buying a house and lot or a condominium unit?
Buying a house and lot or a condominium unit depends on your long-term goals and what your non-negotiable's are in owning a home.

What is better, house or condo?
Owning a house or a condo comes with both its pros and cons.

What are the disadvantages of owning a condominium?
The disadvantages of owning a condo are limited space, less freedom or control over home renovations or improvements, and high condo fees.

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Pros and Cons of Buying a Home for Airbnb

9/8/2022

0 Comments

 
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Airbnb rentals have definitely become the go-to choice of accommodation of foreign tourists and local staycationers alike. As Airbnb guests, whether they go for short term rental or decide to be long term tenants of an Airbnb property, Airbnb guests are able to experience the genuine comfort of a home despite being away from home. 

Airbnb rentals also allow an Airbnb guest the total cultural immersion in a destination since many rental properties have already emerged in many cities in different countries. An Airbnb rental does attract renters exactly because it provides a new experience to a “vacation home.”  Airbnb is a real game-changer in international and local tourism. 

To real estate investors, investing in an Airbnb property has become comparably lucrative these days to traditional real estate investments. Despite the ongoing pandemic, Airbnb owners are seeing vacationers sign up on the Airbnb site for short-term rentals, if only to find reprieve from their usual environment. In the age of digital nomads and remote-working set-ups, an Airbnb investment property cannot be denied of its potential ROI, too.
 
But is an investment in real estate for an Airbnb all that? Before you get carried away with all the benefits you hear and decide on an Airbnb investment, allow this article to take you through the pros and cons of an Airbnb investment. 

 Pros of an Airbnb Investment
 
  1. Any Airbnb rental easily spells PROFIT.


    A fully booked Airbnb rental with a high occupancy rate can mean a lot more profit to Airbnb hosts because renting the same property to long term tenants will allow an Airbnb host to charge more per night than traditional rent payments.


  2. Boost your passive income with a single Airbnb rental

    Airbnb income from rental properties can conveniently become a source of cash flow for real estate investors if they go the Airbnb route. To first time property owners, an Airbnb investment property can amplify extra money. Imagine a single tenant signing up as a long term tenant for a single Airbnb rental. This easily beats the income you get from traditional renting.


  3. Use your Airbnb rental property as your own vacation home whenever you want to.

    When your Airbnb listing is unoccupied, you can always choose to enjoy your own rental property as your second home. Reap the conveniences and comfort of your own investment property. As your own host, it would also be good to experience, first-hand, what your Airbnb guests state their guest reviews.


  4. Be in full control of your Airbnb property

    Property management can be in your full control when you regulate short term rentals. Short term rent by new Airbnb guests staying in your property allows you to review the maintenance regularly even change up the interior designs when you want to. When operating your own rental properties you are also able to adjust the price of your rent during high season or when your Airbnb listings are seeing high vacant dates.


  5. Choose your own Airbnb guests

    As a property owner renting a primary residence or putting up a vacation property for rent, you can be more selective of the people who will be renting your property. Reduce operating costs and make life easier for your maintenance crew by approving guests who have good reputation based on the Airbnb site.


With all that said, investing in an Airbnb rental is not just about boosting monthly income. The cons of Airbnb investing are also unavoidable. From high monthly costs to getting bad reviews from an irate guest, maybe investing in a primary residence for an Airbnb home might not exactly align at once with your financial goals. The pros come with the cons of Airbnb renting too. Consider these other factors:


Cons of an Airbnb Investment


  1. Dealing with many guests of diversified portfolio

    There are risks that come along with renting a property to different people. Some may or may not pay rent on time, depending on their financial reliability. Owning several or single properties on Airbnb means expecting regular rent from different tenants on a regular basis. One tenant may wreak havoc on your monthly income by simply dodging one night's stay at your property.


  2. High property operating costs

    Being your own landlord and maintenance crew, owning an Airbnb unit is a full time job. An Airbnb host's nightmare are usually incurring major property damages, and worse, thefts. With short term rental platforms, these are inevitable. To counter this however, Airbnb offers "host protection"


  3. Being a one-man team

    Hosting a property or several properties on Airbnb means fulfilling the responsibilities of a one-man team. You are in charge of hiring a cleaning service or doing this on your own. You are also in charge of your own marketing. You have to have the right copy to describe your property as the right property for your future guests. You may also need professional photography to ensure your property stands out on the social media platforms.


Overall, Airbnb has, without a doubt, changed the real estate industry by disrupting average apartment rents and traditional rental scenarios. Whether a serious real estate investor or a newbie investor in real estate, venturing into Airbnb does have its rewards. The pros outweigh the cons if you work hard as a host and improve or use your financial literacy to your advantage.


FAQs
​
What are the downfalls of Airbnb?

The downfalls of an Airbnb include high operating costs, regular maintenance, incurring property damage, and irregular bookings from guests during off season.


What type of property is best for Airbnb?

The type of property best for Airbnb boils down to the right property location. Locations with strategic access to top tourist spots, places of convenience and leisure are all surefire ways to book short term rentals. Ensuring that your property has a photogenic interiors can easily attract renters too.


Is it worth it to be an Airbnb host?

Investing in Airbnb offers a good source of monthly income and extra cash. It is a smart way to earn from investing in properties whether you are an OFW, millennial, retiree or anyone who wants to invest in real estate. It comes with its own pros and cons but if you are determined and work hard, investing in an Airbnb can be rewarding.


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How to Compute Real Property Tax In The Philippines

9/1/2022

8 Comments

 
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Paying taxes is, in fact, a necessary evil in life. Hate it all you want but a critical part about being a property owner is having an understanding of what basic real property tax is and knowing how to calculate real property tax. These are responsibilities that all real property owners cannot elude.

No matter the value of the property, whether for residential or commercial use, real property tax rates apply and property owners must be able to familiarize themselves with this basic equation: 

real property tax= rpt rate x assessed value of land


Before you compute real property tax however, it is important also to know why you have to pay real property tax, when you have to pay, and how much exactly? It might be intimidating at first but once you get started, eventually you will also be able to grasp terms such as assessed value of the property, idle land tax, delinquent tax, ad valorem tax, etc. 

Below is a handy guide to better understand how to pay real property tax in the Philippines:

What is real property tax (RPT) and why do you need to pay real property tax?

Real property tax is an annual tax that all real property owners must pay. It can also be paid in quarterly installments. RPT is tax levied or imposed by the local government unit under the Local Government Code, specifically the 1991 Republic Act 7160.
Under this law, the local government unit concerned has the power to generate their own revenue. Proceeds of the said funds go to public expenditures such as construction of sources of local water districts or local schools.


Why are properties being taxed?

As explained above, in the Philippines, Local Government Units (LGUs) are allowed to create and collect their own income under the local government code. Section 233 of the code established the taxes to avoid double taxation.
The law also puts limits on the taxes and provides tax bases and rules on the value of the property. Sections 293 and 283 of the said local government code permits municipalities in Metro Manila to impose property taxes on the residents.


Who should pay real estate tax?

Real estate property tax must be settled by each person or entity who owns a home or property, whose name or names are reflected on the titles or certificates of ownership of the residential property or commercial property.


How to calculate real estate tax?

When you calculate real property taxes, first, you must determine where the residential property or commercial property is located. The RPT rate for the Metro Manila area is 2% and 1% for provinces.

Real estate tax can be computed using the formula: Real Estate Income Tax = Real Estate Rate X Assessed Value, wherein the assessed value for a property is defined by the fair market price multiplied by the assessed value set in ordinances. The appraised value is defined by its taxable value.

In calculating the property value the market price must be multiplied by the value of the asset.


How to compute real estate tax:

Formula: REAL ESTATE TAX = REAL ESTATE RATE X ASSESSED VALUE OF THE PROPERTY


When do you pay Real Estate Tax?

If you want to settle payment for a full year, the payment must be made at the end of January. If you want to pay in quarterly installments, the payment will be paid quarterly on the last day of the following quarter:
  • First quarter: On or before March 31- (January 31 annually)
  • Second quarter: On or before June 30
  • Third quarter: On or before September 30
  • Fourth quarter: On or before December 31


Where and how do you pay Real Estate Tax?

The property owner is allowed to pay tax by paying the city or municipal treasurer's office in full or in recurring installments. Cash aside, the property owner needs to bring the following to the municipal treasurer's office: a copy of the latest tax declaration and copies of the official receipt.

If a tenant is a first time payor, make sure to secure a copy of the last year’s tax declaration and official receipts from your condo’s developer. These are usually turned over to you upon turnover. You can also check with your bank if you applied for a loan.

You will also need to supply copies of the new (current year) tax declaration or declaration of real property and copies of the official receipts or certification. Don't forget to bring valid IDs too.


Online Payment Portals For Paying Real Property Tax
  • Makati City: MakatiOnline Payments
  • Mandaluyong City: Mandaluyong City Online Services
  • Manila City: Go Manila
  • San Juan City: Makabagong San Juan
  • Caloocan City: Caloocan City Web Portal
  • Muntinlupa City: Muntinlupa Online Real Property Payment System
  • Quezon City: QC E-Services
  • Pasig City: Pasig City’s Online Services
  • Valenzuela: Valenzuela City Online Services







Local Government Units typically offer discounts to early filers that do not exceed 20% of the annual tax owed. Additionally, the town or city where the property is located may have different discount rates.

Rate of Real Estate Tax: Fair Market Value and Assessment LevelTax rates vary depending on where the building is located. For cities and municipalities in Metro Manila property taxes and provincial taxes will not exceed one percent. The appraised value is determined using the property value multiplied by the assessed value. Assessing levels can vary according to local administration unit determination.

How do you calculate the assessed value?

Assessed value = Fair market value. However the fair market value in practice reflects the assessment done by a municipality or town assessor in accordance with the tax declarations and other documents relating to the taxes.
Assessed levels are determined via municipal ordinances in the Sangguniang Panlalawigan, Sangguniang Panglungsod or Sangguniang Pambayan in Metro Manila. For more information on these taxes, check the city's ordinance.

What Are The Penalties For Not Paying Real Property Taxes?Late payers incur penalties. Penalty is at 2% interest per month on the unpaid amount, and can incur a maximum of 72% if unpaid for 36 months or 3 years. It is your responsibility to settle financial dues on time.
Avoid these penalties by paying land taxes on time.


FAQs

How do you calculate real property tax?

To calculate real property tax, remember to use the formula: REAL ESTATE TAX = REAL ESTATE RATE X ASSESSED VALUE OF THE PROPERTY

How much is real property tax in the Philippines?
Real estate taxes in Metro Manila are at 2% of the assessed value of the property in question while provincial areas have a tax rate of 1% of the assessed value of the real estate.

What is Amilyar?
Amilyar is often used by Filipinos to refer to real property tax.

How is Amilyar calculated?
Amilyar or real property tax is computed by using the formula: REAL ESTATE TAX = REAL ESTATE RATE X ASSESSED VALUE OF THE PROPERTY
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