Can Filipino Homeowners Use Their Property to Build a Real Estate Portfolio?

Building a real estate portfolio is an effective way to grow wealth. As a homeowner in the Philippines, you already have a valuable asset that can help you get started. Currently, the Philippine real estate market continues to show resilience. During the last few years, property values in key areas such as Metro Manila and Cebu are showing steady growth. According to a report by Colliers, residential property prices increased by approximately 4.5% in the first quarter of 2024. This signals a strong demand for property despite global economic uncertainties. With infrastructure projects like the Metro Manila Subway and new expressways, now is a great time to start your local real estate portfolio.

Let’s explore three strategies to leverage your existing property to jumpstart your real estate dreams:

1. Convert Your Property into a Rental

Turning your current home into a rental property is among the simplest ways to start a real estate portfolio. By renting out your property, you can generate a steady stream of income that can be reinvested into other properties. This approach is particularly advantageous if your property is in a high-demand area. Specifically, we’re looking at central business districts, popular residential neighborhoods, or urban centers.

Suppose you own a 2-bedroom condo in Makati, a prime location for rental properties due to nearby offices and commercial establishments. Similar units on property tech platforms such as Ohmyhome are listed for rent at P40,000 to P60,000 per month. By converting your condo into a rental, you can generate enough income to cover your mortgage payments. At the least, you can save for your next real estate portfolio investment.

Additional Tip: To maximize your rental income and enhance your real estate portfolio, ensure your rental property is always clean and well-maintained. If you have available rentals, consider offering additional perks such as high-speed internet or fully furnished options. Not surprisingly, these convenient extras can attract higher-paying tenants.

2. Invest in a Pre-Selling Property

Investing in pre-selling properties is an excellent way to expand your real estate portfolio via a relatively low upfront investment. Pre-selling units are typically sold at a lower price versus ready-for-occupancy (RFO) properties. This provides an opportunity for further capital appreciation. As the project nears completion, the property’s value often increases, which you can capitalize on by house-flipping. Better yet, wait until the developer officially signs off on your unit’s turnover, which can further bolster your property holdings.

For example, have you considered investing in a pre-selling condo in Ortigas, Pasig? Plenty of pre-selling units are available for the intrepid homebuyer interested in modern living in one of the Philippines’ most vibrant business districts. Securing a deal on a preselling property assures you of at least 10-15% in savings compared to an RFO unit. As development progresses and the area continues to thrive, your property’s value could rise substantially enough to attract interest from buyers.

Additional Tip: When considering adding new property to your portfolio, check the developer’s track record and the location’s growth potential. Look for areas with upcoming infrastructure projects or increasing commercial activity, as these factors can drive property value up over time, benefiting your overall real estate portfolio.

3. Tap into Your Home Equity

If your current home’s value continues to appreciate, you can tap into the equity you’ve built to finance additional property purchases. This liquidity can allow you to expand your property holdings. Home equity is the difference between your property’s market value and the balance on your mortgage. You can access this equity through refinancing or a home equity loan, which provides the funds needed for new investments in your real estate portfolio. The catch? You’ll have to offer your property as collateral.

For example, you own a house in Quezon City currently worth P8 million, with a remaining mortgage balance of P4 million. By refinancing, you could potentially access up to PHP 2 million in equity. This money could be used as a down payment for a new property, such as SMDC’s South 2 Residences condo in Las Piñas listed at P3.95 million, enabling you to grow your real estate portfolio without tapping into additional savings.

Additional Tip: Before accessing your home equity funds to expand your real estate portfolio, carefully consider the costs and risks involved. Ensure that the rental income or appreciation potential of the new property justifies the additional debt, and always have a plan for managing repayments to avoid financial strain on your real estate portfolio.

A Real Estate Portfolio Is Within Reach

Starting a real estate portfolio as a homeowner in the Philippines is within your reach. By converting your property into a rental, investing in pre-selling properties, or tapping into your home equity, you can begin to build wealth. This allows you to secure a prosperous financial future through a growing portfolio. With platforms like Ohmyhome providing access to a wide range of properties and resources, there’s no better time to take the first step. Are you ready to start your journey?

Ready to Start? Let Ohmyhome Help You Build Your Real Estate Empire

Ohmyhome offers a comprehensive suite of real estate services to help you buy, sell, or lease properties with ease. Whether you’re looking for market insights, expert marketing advice, or assistance with documentation and legalities, we’ve got you covered. Our team of real estate professionals is here to guide you every step of the way. Ohmyhome also offers renovation services, ensuring your property is in top shape for rental or resale. Ohmyhome’s tech-powered platform helps you browse property listings, manage transactions, and connect with trusted agents—all in one place!

Sign up for a free account today and start enjoying the benefits of our expert property services. Whether you’re a seasoned investor or just starting your real estate portfolio, Ohmyhome is your property goals partner.