Perhaps, a real estate property purchase is considered the safest investment to take due to its highly probable profit or appreciation of its value. Nevertheless, it needs a planning and value appreciation takes time to realize especially if the property you are investing on is still a construction in-progress. For business minded individuals, time is money. They always emphasize that the value of a peso today is worth more than a peso tomorrow. Of course, not everyone has the means to be aggressive with their investments. Some just want to earn a little passive income while some wants to take bigger risk for the sake of better earnings. So, if you are a new investor yet can be classified as one with an aggressive approach when taking new ventures, flipping properties might be a viable opportunity that might pique your interest. If you want to know about the basics of how to flip houses or real estate properties in the Philippines, don’t you worry! We got you covered! Here are some useful information to be remembered in flipping properties in the Philippines.
Why is Flipping Properties a Profitable Investment Opportunity?
Property value appreciation is the obvious reason why investing in real estate is a good venture to take. However, a faster way to earn from your real estate investment is through flipping the property. Flipping is simple because its essence is buying the asset at a specific price to sell it for a profit resulted by the appreciation of its value.
However, you might ask “isn’t value appreciation happening only after a certain period of time or after a major development in the area where the property is located?” The secret to flipping properties is through pre-selling properties. Now, your next question may be “what is its difference from an established or fully constructed property? Isn’t it just the same?” Well, pre-selling properties have a really low price. A price that you would not expect to pay when you are a newbie in buying a real estate property. The price you will be paying in purchasing a pre-selling property is below its market value. In this way, the most favorable situation in investing happens. You buy at a low price and sell at a high price. So flipping pre-selling properties, lets you earn profits at a much faster pace and arguably higher amounts because you seized the chance to purchase it below its projected value. Still, the probable and higher returns entail being updated on the upcoming real estate developments all over the country to quickly seize the opportunity of purchasing low-cost properties.
Besides, purchasing pre-selling properties for flipping is more than just acquiring it below its market value. There are other benefits that you can maximize to earn more and making it easily enticing to prospective buyers for a faster flip and realization of profits. You should know more about what you can do for a better value appreciation of your newly purchased pre-selling property.
How to Acquire and Flip a Pre-Selling Property or Houses in the Philippines?
- Check your savings and cash flow
Although pre-selling properties notably have a lower purchase price, you still need to work on and assess your financial capacity to choose the most practical payment method and terms in purchasing a pre-selling property. If you have enough, it is better to provide a higher percentage of down payment because the developers incentivize buyers with higher down payment. A higher down payment may let you enjoy a 6% to 10% discount. It might be low based on the percentage but the cost we are talking about here is worth millions so the savings are surely material and can still be used for other investment or even on your upcoming monthly amortization payment on the pre-selling property you acquired.
Additionally, your cash should be readily available every due date of your monthly amortization to avoid penalties or higher interest payments because of its compounding nature.
- Select the best unit from the option
Another benefit of buying a pre-selling property is the right to choose a unit of your choice among the those that will be built. Unlike a ready for occupancy house or property, you can choose the best unit which suits your preference or in the case of flipping, a unit which would be mostly preferred by prospective buyers. This is very crucial in establishing a marketable property for flipping because it dictates the accessibility to amenities and convenience especially if the buyer purchases a house or property as his or her residence.
- Getting it ready for the market
Aside from being able to choose the location of your unit, you may also have the freedom to customize the floor plan of your purchased property. In this way, you can customize its floor plan and interior design to make it more appealing to your prospects. But you must also remember to limit the improvements you will be making in the unit. You still need to make it customizable for your buyer so he or she can feel the property as his or her own and make it functional according to his or her needs. Moreover, more improvements equate to higher cost thus forcing you to raise the price of your property which slows down the flipping process.
- Set a competitive pricing and find the right buyer
Pricing and finding a buyer might be the most difficult aspects of flipping properties. You have to price your property accordingly so that buyers will choose to buy your listing instead of browsing other offers from the developer or other sellers. With this, you have to ask for the help of real estate agents or brokers because they are the experts in real estate selling as they are knowledgeable on market value of properties.
Keep in mind that even though you want to flip it as quick as possible, you need to price your property to the extent that it will reimburse your incurred expenses for the improvement and let you earn a reasonable profit after covering all the expenditures.
- Know the legalities
Nowadays, scams are not new in the field of buy and sell. So, you must know your rights as a buyer and as a seller to protect yourself and make your investment less risky. You must have a knowledge about the Presidential Decree 957, also known as “Subdivision and Condominium Buyer’s Protective Decree.” The essence of this law is that owners and dealers of properties must secure a license from the Housing and Land Use Regulatory Board (HLURB) to ensure compliance with the government requirements and avoid pre-selling scams. Also note that all documents during the purchase process must be notarized by a lawyer before its release to the buyers prior to signing.
Now, aside from protecting your rights as a buyer, you must protect your rights as a seller. You must know the legalities in transferring rights or ownership of your pre-purchased property. For example, when transferring a pre-purchased condominium unit to another buyer, a deed of transfer and waiver of rights is usually executed in the court. Once it is signed and notarized, buyer must pay 50% of the agreed price or 100% of it depending on the agreement.
Since this involves legal documents and you plan to make this a long-term investment activity, it would be better to hire a law expert to protect your reputation and ensure the smooth transfer of title to your prospective buyer.
The Best Tip in Flipping Properties
It is easy to acquire funds, knowing the legalities, and hiring professionals to make your property attractable to the market. However, one difficult aspect of flipping properties is the assessing the overall build quality of the real estate. So, it is better to take a lot of research and gather a lot of feedbacks from the customers of real estate developers before investing on their projects.
If you want to be assured of a high-quality real estate property coupled with a pricing that will certainly not break the bank, Bria Homes might be your best choice. It is one of the newest yet biggest real estate developers in the Philippines. It offers different house and lots and condominiums nationwide. In fact, it focuses on establishing real estate projects on developing areas which makes it beneficial to its potential investors as it lets them enjoy the valuation impact of the foreseen growth of the place. So, what are you waiting for? Check the Bria Homes website to learn more about the housing models they offer. For quick updates, you may also follow their social media page as they offer both pre-selling and ready for occupancy properties. You never know, you might become one of the biggest property flippers in the Philippines!
Written by Steven Hernandez