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Philippines Real Estate – Should We Buy Now In Manila?

– Posted in: Real Estate

My latest obsession is Philippines real estate. Trailing-Husband, oldest daughter and I took a 2-week trip to Manila in January 2017 – their first trip and my fourth, although my last trip was 25 years ago, so it felt like my first time too.

I was already primed to possibly live there because the favorable exchange rate (approximately 50 Philippine pesos to one US dollar) meant that we could drop everything and retire debt-free right now. I love what I do but would like to slow down and be even more choosy about projects – you can do that when you’re 100% financially free. The antagonistic political climate here in the US also makes an escape abroad much more palatable.

Looking at properties in Manila

Part of the trip was focused on looking at properties.  Mainly we looked in Newport City, a cluster of relatively new developments right outside Manila NAIA, the international airport. There is a new walkway under construction to the popular Terminal 3, which at completion will mean you could walk from the airport to your apartment.  Furthermore, with proximity to a Marriott Conference Center and Resorts World Casino, it is a possible vacation rental for the business or leisure travel when we aren’t there. When we are there, we can take advantage of the Mariott and casino shuttles to reach nearby points of interest.

Also, a property in Manila, and particularly near the airport, would make a great hub for international travel throughout the rest of southeast Asia.

We found brand new units for the low $100k’s and even got a lead on two resales for $76k (studio) and 80k (one-bedroom). $80k wouldn’t even buy a parking spot in NYC! Maintenance, property taxes and insurance amount to less than $100 per month. Utility costs are high in Manila but with the smaller units coming in under 400 square feet, these costs would be minimal. Then we would have our escape hatch, our hub for Asia travel, and our first international real estate investment.

So should we buy?

No, don’t buy because:


source: tradingeconomics.com

  • The Philippine peso is not a reliable currency (see image above), and if we buy, we’re essentially storing up to $100k in a volatile currency;
  • We’re not going to use the unit for more than three months out of the year (we have lots of places we want to visit, and the dry, cooler season in Manila is just about three months), so it would be more cost-effective to rent during our visits;
  • There’s a lot of development in the Philippines, so who’s to say something better isn’t going to come along;
  • For “escape hatch” purposes, the Philippines isn’t ideal – it’s still a developing country, and its political climate is as antagonistic as the US.

Yes, we should buy because:

  • The US dollar is really strong right now, so you can get a lot for your money;
  • Even if we only use the unit for a few months ourselves, it would be a family property. We have two kids and a large extended family, and they could use the place for many years;
  • It’s always more comfortable to have your own place than to stay at a hotel or even a short-term rental. We know we want to visit regularly;
  • Sure, there’s lots of development, but Manila’s main international airport isn’t just going to move – that Newport City location will continue to be great for the foreseeable future;
  • For “escape hatch” purposes, the Philippines is a comfortable draw – I have some family there still, and husband is practically an honorary Filipino having suffered through so many of my family events over 30 years!

So should we buy? What do you think? I think another trip to Manila is in short order!

 

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