Question about low housing payment offers in Philippines?

[Winston]

Hi all,

I have a question. Every time we go to the SM Clark mall here, there are realtor promotion agents near the entrance handing us flyers with great promo rates for houses. They say things like "Starting at only 2999p per month!"

Can you really get a house for 3000p a month? What's the downside to that? That's half of what I pay in rent. So my question is, if you can get a house on 3000p a month, then why is anyone paying rent at all? Wouldn't everyone just get a house and pay 3000p a month instead of paying more for rent?

What exactly is the catch or downside to paying such a low monthly mortgage payment? There must be one or else everyone would be doing that instead of renting, right?

If I ask this question to these real estate promoters, they won't know because they are programmed to believe that there is no catch or downside to what they are promoting, and they cannot think or reason enough to provide an answer to such a question either.

Anyone know the real deal on this? What's the pro and con to this?

Thanks,
Winston

[gmm567]

Well for one thing the mortgages may not be fixed rate.....so the payment may go up in the future. They also might be selling mortgages where you don't pay down any principal, just the interest. In that case your mortage may be going up in value. It's hard to say...there's all kinds of funny tricks that could be going on.

You want to make sure you get a fixed interest and that the amortization schedule is paying down the principal.

Another thing is that people may not have the down payment or the credit to get a mortage..so there is a price differential between owning and renting..that is good for owning. It's very possible that economics in the housing industry is such that it's cheaper to own than rent. That can happen . It has happened here.

I'd have to talk with more people to figure out the fundamentals of what is going on.

[th3g4me]

That is like 65 USD? 3000P? I had no idea things were that cheap? Can people not from Phil own homes or land there? With an exchange rate so favorable maybe I would stay an extra few weeks if its nice.

[Winston]

That is like 65 USD? 3000P? I had no idea things were that cheap? Can people not from Phil own homes or land there? With an exchange rate so favorable maybe I would stay an extra few weeks if its nice.

W: No, foreigners have to put houses in the name of their spouses or girlfriends. But they can own condos due to some law loopholes. I don't know the specifics about it though.

[momopi]

That is like 65 USD? 3000P? I had no idea things were that cheap? Can people not from Phil own homes or land there? With an exchange rate so favorable maybe I would stay an extra few weeks if its nice.

W: No, foreigners have to put houses in the name of their spouses or girlfriends. But they can own condos due to some law loopholes. I don't know the specifics about it though.

http://www.bohol-island.com/realestate/owning.htm

General Rule of Holding or owning a Real Estate

1. General Rule only Filipino citizens and corporations at least sixty percent of the capital of which is owned by Filipino are entitled to acquire and own land in the Philippines.

2. Exceptions to General Rule Alien acquisition of real estate in the Philippines is allowed in the following cases:

a) Acquisition before the 1935 Constitution;

b) Acquisition thru hereditary succession if the alien acquires is a legal heir.

c) Purchase of not more than forty percent interest in a condominium project.

d) Purchase by former natural-born Filipino citizens subject to the limitations prescribed by law (Batas Pambansa 185 and R.A. 8179).

3. A Filipino who marries an alien retains her Philippine citizenship (unless by her act or omission she is deemed to have renounced Philippine citizenship), and may therefore acquire real estate in the Philippines.


=====================================

Although you cannot own the land as non-citizen, it's still possible to lease the land and build a house on top.

My buddy bought and sold 3 condos in Makati area, made $$ on every one. But he bought pre-built condo from a company other than Ayala, so some risks are involved. Brand new condos are desirable and older ones are not. If you're just looking to buy one cheap, go to the lobby of condo buildings and ask to see the ad board for private listings.

[gmm567]

Do you have pictures of these houses?

and what do utilities cost there?

[Mr S]

Just wait when you get here, there are tonnes of real estate representatives whetting their whistle when they see a foreigner come their way, you can take tours or get pictures from them...

Utilities depend a lot on ones own electricity usage habits. If you can't stop using air conditioning, you are going to pay a lot of money for keeping yourself artificially cool...

Living in a studio condo in Makati, I rarely used the AC and water heater and I paid roughly between 1200-3000 pesos a month. A lot has to do with the time of year too as the hotter months tend to use more electricity than cooler ones.

I currently live in a 2 bedroom place, more Filipino style with no AC and I have been spending around 1200-2000 pesos a month, i little less overall but the hot months are just starting...

I knew some guys in the same condo building who used their AC and heater all the time and paid upwards of between 5000-10,000 a month just on electricity. One coworker I used to work with used to live in a house in Alabang and she said her monthly electricity was between 30,000-40,000 pesos a month! So the bigger the place, the more expensive the utilities, especially if you use AC a lot.

[gmm567]

Well how bad is the humidity? There is something called the heat index. It's a scaling of how hot it feels as temperature and humidity combines to make heat feel hotter. It kicks in at 85 degrees. When the humidity grows at that temperature, the heat feels much hotter. 85 degree's plus 85 humidity makes the heat feel like 110 degrees. With low (minus35% ) humidity, 85 degrees is not too bad, at least it is not stiffling.


If you have low humidity, you can use swamp coolers. They cost $10 a month to run 24/7--much cheaper than air conditioning. But swamps require low humidity. Does anyone use swamps? Swamps are a different way to lower temperature, but they operate on different physical principal. They don't work well unless the humidity is normally less than 40%.

You can also lower your heat/cooling costs by building and super-insulating your house. That might be the best solution--if you have to use air conditioning as swamps don't work well because of humidity. Insulation lowers the energy required to cool the house. Conventional construction doesn't do enough.

$25 a month--Jesus christ.

[Mr S]

Well essentially humidity is probably close to 100% everyday, if it can get higher than that then I would say it feels worse sometimes. The only days it may be 85% or below would be during the "cool" months of December-February, and even then its still humid often.

There are no swamp coolers here and couldn't even tell you what one looks like.

If you can't take the humidity then living here year long would not be an option. A lot of foreigners visiting here can't handle the heat and humidity.

Lets just say you will sweat a lot here, so if you change your eating habits its easy to lose weight. The only place that I have ever been that was hotter than here with high humidity was the Persian gulf. The temps here average in the high 80's to 90's with whatever the humidity makes the temp feel.

The heat doesn't bother me as I have gotten used to it. Although walking around during the day outside can be annoying with all the sweating involved, so one has to dress accordingly.

Conventional Filipino buildings probably use none or really shitty insulation as the building codes are not strict like in the west and construction companies like to cut corners whenever possible. If you are a westerner funding a building project, you have to micromanage it yourself to prevent them from f***ing up the building...

[momopi]

Swamp coolers are better for places with high "dry heat" like Malaysia, I'm not sure if it'd work well in PH. You could import a portable one for $100-$200 and try it.

Personally, I'm big on ceiling fans.

[gmm567]

No swamps won't work in the Philipines. The humidity is too high. Swamps add humidity( water) to hot dry air, and that brings down the temperature by 15-25 degrees. But if the air is already very high in humidity, adding more water well have no affect. I have heard of a combination dehumidifier system which is then hooked up to a swamp, but I am not sure whether that is more cost effective than air conditioning.

[James G]

I knew some guys in the same condo building who used their AC and heater all the time and paid upwards of between 5000-10,000 a month just on electricity. One coworker I used to work with used to live in a house in Alabang and she said her monthly electricity was between 30,000-40,000 pesos a month! So the bigger the place, the more expensive the utilities, especially if you use AC a lot.

I spend around 1000 US a month for electricity for my place in Bangkok, a little less for my house in Jakarta but that’s because I am only there 1 or 2 weeks a month.

But I am way addicted to AC

[Winston]

I knew some guys in the same condo building who used their AC and heater all the time and paid upwards of between 5000-10,000 a month just on electricity. One coworker I used to work with used to live in a house in Alabang and she said her monthly electricity was between 30,000-40,000 pesos a month! So the bigger the place, the more expensive the utilities, especially if you use AC a lot.

I spend around 1000 US a month for electricity for my place in Bangkok, a little less for my house in Jakarta but that’s because I am only there 1 or 2 weeks a month.

But I am way addicted to AC

W: Man you always blow up numbers don't you? 1000 dollars a month for electricity in Thailand?! That's how much it would cost in Manhattan!!!!!!!!

You still haven't explained why you spend 1000 dollars a month on a website (civiliancontractorjobs.com) to pay staff to run it, when it only gets an average of one visitor per day (according to Alexa.com) and to run a forum on there that Google cannot even find.

Something smells awful fishy about that...