Real Property

The growing population in the urban and suburban areas in the Philippines has increased the demand for real estate properties. Increase in property values as a result of demand offers excellent possibilities for secure investment in real property. In the Philippines, there are different opportunities in the sector which includes acquisition of raw land, construction of apartment building and purchase of condominium unit.

Real Property

A raw land is defined as a property in its natural state. Due to its undeveloped form, it can be converted into commercial, residential and agricultural property. Investors are also allowed to venture on small scale lot banking. It is a type of real estate investment that is suitable for would-be investors who are willing to wait for years to sell their property.

  • Less cost– purchase of raw land incurs less cost relative to other real estate investments.
  • Price appreciation– real value of raw land increases over time.
  • Long-term investment– acquisition of raw land is an easy form of long-term investment. It also takes time for a raw land to increase its value.
  • No regular income– raw land does not generate steady income during the period of ownership.
  • Expenses– raw land accrues property taxes.
  • Not readily sold in the market– raw land is the most illiquid form of real estate investment because it takes time to sell it. Therefore, raw land cannot be quickly converted into cash.

Before Buying

1. Check if the Project has a Certificate of Registration and a License to Sell.

You should ask the broker/agent of the owner/developer if the project is registered and has a License to Sell issued by the Housing and Land Use Regulatory Board (HLURB):

* This can be verified at the On-line Queries/HLURB website ( for the list of projects covered with Certificate of Registration and License to Sell as well as any encumbrance thereon, e.g. Cease and Desist Order, Suspension of License, etc.;
* Or you may visit or call the nearest HLURB Regional Office for this information.

2. Visit the subdivision/condominium, where the house and lot or condo unit to be purchased is located to know its natural topography, viz: susceptibility to landslide, flooding, erosion, etc.

If the project is covered with a License to Sell, you may already enter into a Contract with the owner/developer. However, there are things which must be checked:

1. The date of completion of the project as indicated in the License to Sell;
2. If the property is mortgaged, it should have a Clearance to Mortgage from the HLURB.
3. The facilities and amenities represented in the advertisement flyers/ brochures are in accordance with the approved subdivision and condominium plan on file with HLURB.

When Buying

1. Check if the broker/agent is registered with HLURB/DTI.

2. Verify with the Register of Deeds to see if the property has not been sold to other buyers.

3. Check into your source of income whether you can afford to pay the equity and the monthly installments.

4. Check if the materials of the house or condo unit conform to the development standards and approved construction specifications submitted to HLURB.

5. Check whether the developer would pay for the water and electric meters, the subdivision perimeter fence, etc.

6. Check who would eventually operate the subdivision/condominium water system.

Before Signing the Contract to Sell

1. Don’t sign any blank form of the Contract.

2. Read thoroughly all the contents of the Contract especially the terms and conditions in fine print.

3. Secure a copy of the Contract and all other documents that you have signed.

4. Make sure that the Contract would be registered by the owner/developer to the Register of Deeds.

5. Pay directly to the owner/developer or the marketing agent authorized by said owner/developer only.

6. Ask for an official receipt on all payments for your file.

Regulation and Compliance

The Housing and Land Regulatory Board is the Philippine government agency which promulgates and enforces policies on land use, housing and homeowners associations. Presidential Decree No. 957, also known as the Subdivision and Condominium Buyer’s Protective Decree, is the policy that regulates the sale of subdivision lots and condominiums.

Apartment rental is one of the most common businesses of overseas Filipinos, specifically for the retirees. It offers them an option to establish a business that only needs minimal supervision. Aside from easy management, apartment rental provides a steady flow of income. There is also a high demand especially in heavily populated areas in the country. Apartment rentals offer affordable housing for lower income brackets.

  • Minimal risk – There is a monthly rental income from the tenants. In most cases, apartment rentals do not go bankrupt.

  • Minimal supervision
    – Apartment only requires minimal management in relation to other business.
  • Low returns– the monthly rental income is small relative to the size of the initial investment.
  • Long payback period– in comparison to other types of business, it takes a longer time to get the initial investment back

How to start an apartment rental business?

1. Find a property that is zoned for construction of a residential apartment.

2. Register the apartment business. For sole proprietorship, register with the Department of Trade and Industry (DTI). For partnership or corporations, register with the Securities and Exchange Commission (SEC).

3. Acquire a Barangay Clearance.

4. Get a Building Permit, Occupation Permit and Fire Safety Permit from the municipal or city where the apartment is situated.

5. Obtain a certificate of registration, which contains the schedule of tax obligations, from the Bureau of Internal Revenue (BIR).

Regulations and Compliance

An apartment rental business is under the provision of Republic Act No. 9653, also known as the Rent Control Act of 2009. One of its salient features includes the limitation of increasing rent which is effective for a period of one year.

Acquisition of condominium units is considered as a convenient and profitable investment opportunity. Condominiums operate the same way as corporations. A unit owner is considered as a shareholder of the condominium; one unit is equal to one share. It also translates that all unit owners equally owns the common areas and the land where the condominium is built.

  • High Demand– young professionals, expats, and businessmen in central districts demand rentable condominiums.
  • Steady Flow of Rent Income- occupied condominium units earn monthly rent income.
  • High Price Appreciation– real value of condominium goes up at least proportional to the rate of inflation.
  • Association fees– All fees are paid whether the unit is rented or vacant.
  • Payment of other expenses– other associated expenses include realty tax on the unit, share of realty tax on the land on which the condominium stands, and share of realty tax on common areas.
  • Shared decision making– The regulations of the condominium building is based on the decision of the association or board of directors.

How to purchase condominium unit?

1. Conduct a thorough research on the background of the condominium.

Find a condominium unit that fits your choice by researching on the following:
• Unit
• Location
• Amenities
• Developer
• Cost of the Property and Other Expenses

2. Complete all the necessary requirements.

• Consularized Special Power of Attorney
• Copies of your passport
• Other ID’s
• Proof of income
• Proof of billing in the Philippines
• Tax Identification Number (TIN)
• Employment Contract
• Certificate of Employment and Compensation

3. Pay all the cost of the property and other expenses.

After paying the cost of the condominium and other initial expenses, the Condominium Certificate of Title is already prepared as a proof of ownership of the purchased condominium unit.

Regulation and Compliance

In purchasing a condominium unit, buyers should be well informed on Republic Act No. 4726, more commonly known as “The Condominium Act”. It is the regulation that governs the rights of the owners and states the extent of their influence in the property where they purchased the unit.

Sources: Housing and Land Use Regulatory Board, Real Estate Companies and other business guides