The Philippines is a growing country in terms of population and the economy. And it shouldn’t come as any surprise why. Being on the ground in the country, you get the feeling that people actually like each other and want to support each other in their ventures. Young people are excited and happy, and most come from families who support and take care of them. While there may be some poverty left in some areas, the vast majority of people feel like they are part of a community and want to join in with everything that’s happening in the country.
Added to this, the market economy is functioning well. People can earn money and spend it on many of the emerging businesses in the country, many of which line the streets in the major cities.
This combination is essential for a healthy real estate market. This general atmosphere means that there is so much to look forward to.
However, the same principles apply in all sorts of places across the globe. There isn’t just one real estate market that’s booming: there are many.
This fact is sometimes lost on people who only focus on one place. Yes, emerging markets are exciting, but there are also plenty of opportunities elsewhere.
So, why does investing in land and property make so much sense?
Hedge Against Inflation
One of the main reasons it makes sense to invest in land and property is that it is a hedge against inflation. Even if prices for consumer goods rise significantly, the price of housing is likely to go up even more, especially in areas with strong population pressure. There simply isn’t enough property to go around in many of the urbanizing areas.
Passive Income Opportunities
The passive income opportunities from property ownership are also substantial. Many landlords make tremendous amounts of money from their investments.
The most obvious way to make money is to rent out properties to families or professionals who can afford it. Given the growing middle class globally, this is becoming more of a possibility. Fewer people are simply constructing their homes from whatever materials they can find and hoping for the best. Instead, they want a better lifestyle.
Another way to make money is to lease out buildings and units businesses. These are often willing to pay more and they are less risky (since they are more likely to want to pay every month).
Finally, you could look into the idea of investing in properties and then flipping them for money. It’s not a passive activity if you do it yourself, but you can now pay professionals to perform the work inexpensively for you. Their costs are likely much lower than yours given how efficient they are.
Cultural Value Of Land Ownership
It doesn’t get talked about much, but there is also a cultural value to land ownership. People who say that they are “landowners” have automatic status.
For many cultures around the world, owning land is a way to protect future family members. Even if everything goes wrong for them, they will still have land they can fall back on in case of an emergency.
Long-Term Wealth Building
Another reason why investing in real estate makes sense is that it builds wealth long-term. While it might not be quite as fast as setting up a business, the total payment can be significantly higher.
Usually, it takes the average business owner 5 to 10 years to scale an idea and make it ultra successful. However, it only usually takes real estate 15 to 20 years, and there is less risk and time potentially wasted.
Long-term wealth-building is also easier with property because of the safety of the assets and general appreciation. Nobody can take them away (as long as you have a solid title).
Numerous Investment Opportunities
Alongside this, there are numerous investment opportunities to be had in the real estate sector. There are so many places where properties are undervalued and in need of someone to come in and improve them.
Furthermore, there are different categories of investments, something you can talk to estate agents about. For example, you might want to purchase a condo in the middle of a city or a fixer-upper on the outskirts of town. Often, you have a tremendous amount of choice and scope.
Tax Advantages
Depending on where you are, there may also be tax advantages to investing in property. You might find that your bill is lower than you think by the end of the year because you can subtract depreciation and so on.
Most places have property taxes, but if you own a portfolio through a business, you can deduct appreciation. This feature means that you can often earn money tax free through these ventures.
Low-Risk Asset That’s Tangible
Real estate is also a relatively low-risk asset. While it nearly blew up in 2008, that was a rare event and had more to do with the financial system as a whole.
The nice thing about low-risk assets is that you don’t need to worry about them. They just keep earning you money over time. They can also enable you to take out more debt, allowing you to grow faster over time.
Empowerment
Finally, owning property gives you a sense of empowerment. Instead of renting from someone else, you finally have your own place that you can do whatever you want to.
Real estate is a secure investment because it can’t go anywhere or be taken. People will also always require housing, so someone will eventually want to rent it, even if it is at a lower price.
Many people buy housing to support their family and community. Extra resources makes life so much easier, especially compared to volatile markets, like stocks.
So there you have it: some of the reasons why investing in land and property makes so much sense to Filipinos. It’s often the first step on the path to wealth-building and becoming more successful generally financially. Whether it’s passive income or appreciation, both can work.
P.S. Remember my house in Alabang, Muntinlupa? I’ve rented it out again to new tenants, yay!
P.P.S. My husband and I recently bought two parcels of land up in the mountains here in Cebu… the first one is about 3 hectares for building another farm and the second one is just about 1000 sq.m. or so for our future processing plant or perhaps our future mansion. Exciting times ahead for us! Hurray to real estate investing! (^_^)
MomTraNeur 