Why a High-end Condo is a Good Investment?

Hi, Welcome back. Today we’re going to talk about “why a high-end condominium is a good investment?”.

Now that you’re back here, today we’re going to talk about one of the questions “Why is a high-end condo a good investment?” There’s so much debate about this. It’s expensive, you could actually buy a mansion with the price, it’s a small space, it’s just air, it’s just a box. What’s up with condos? Why is it such a nice investment? You know, we’re finally settle this debate today. Hopefully what we’re going to talk about today will give you more insight as to how to use a condo to your advantage, most especially a high-end one.

So why is a high-end condo a good investment? The first reason is central location.

There’s just so many condos out there, but a high-end condo is usually selectively placed in premier locations. So what does this result to? If you’re going to invest in a high-end condo, this means that it will usually have the best location in the land. So either it’s walking distance or 5 minutes to the office, 5 minutes to the embassy, probably near the airport, normally they will have the best lot pad where the property is located. So this will translate to a lot of good things for the owner and the tenant. For the owner this gives you more capital appreciation, more value in the years to come.

Second, for the tenant or the person who’s using it for personal use, it will enable you to have a more convenient lifestyle.

Because everything that you need is going to be so near given the central location. That is why in other countries such a New York you will see most of these high-end properties are actually just flats, you don’t see huge mansions in New York. Probably in LA, yes, but in New York these flats are highly valued because if you just live there, you could work, you can make so much more money, you can be more productive, you can have a life with your family, then it provides so much value.

So that’s just number one, just location. So as an investor, when we’re talking about an investment, if you have the central location, we’re talking about more value and a better demand.

Number two is top-notch finishes.

Usually these high-end condominiums come with naturally good finishes. It’s not foreign to find Hansgrohe, Kohler, you’ll find a solid surface counter top, granite, or engineered wood flooring, or probably marble in some. You will actually really find that most premier condominiums come standard with these things. Of course it’s a hefty price tag but once you have the premier finishes, as an investor, it’s going to attract better tenants or it’s going to attract better buyers for your property because your property is really designed well.

Can you imagine a property which is in the middle of the business district at the high-end building, and then your finishes are all not good? Can you imagine how that’s going to be?

So for high-end properties, these high-end finishes already come standard. So it accentuates the living experience, it attracts good tenants and it attracts good buyers for your property.

The third reason why we feel like a condominium is a good investment is because it’s always near top schools.

Now given that these condominiums are seated in the business district, for example in Makati, you’re going to find a lot of good schools around that area. You’re going to find Assumption, you’re going to find CSA, you’re going to find Don Bosco, and you’re going to find a lot of good schools. Now even for grad school, you have AIM and the rest. In the case of Global City you will find British School of Manila, you’re going to have ISM (International School of Manila) as well, you have Manila Japanese School, and among others.

So what I’m basically saying is for the one who’s going to use it, for personal use or for investment, if you have a family and you have kids who need to go to good schools and you’re looking for a place where you’re near work and near a good school, a condominium can be a good place to live in.

The fourth reason is security.

When you’re leasing out a condominium or probably selling it, most of the buyers or tenants would always look for security.

Let’s say for example, if I was not familiar with the country and I come in here and I need to send my kids to school and it’s quite important that I find a nice spot, I think one of the main considerations would be security, and most of the high-end condominiums really provide that. You have the access cards, CCTV, you have 24/7 around the clock guards, you have all of these things working for the tenant or the owner.

As far as investing is concerned, when you’re looking at the returns either for your buyer or your prospective tenant, security is one of the things that they would really look at and it could really prove beneficial for them.

Fifth, and since we’re already talking about it, a condominium is a good investment because it’s really great for rentals.

In other countries this is tantamount to having multi family homes. While in the Philippines we also have town homes, we call them row houses in some areas, a condominium could have the same function as a multi-family home because in a certain floor you have several units, usually 10-14 units per floor or even sometimes 2 units per floor depending on the development. If you have these units in a certain location and there’s a reason for them to be there, it’s basically providing value for the owner or the tenant, it could be a very attractive place to live in. So it’s great for rentals.

For example, if you have a person who just needs to send a kid to school, so he doesn’t have the need to buy a property there or to live there permanently, he’s just going to be there for 4 years, say for example I’m not from here, I need to send my kids to a certain school and I want their everyday life to be convenient for the next 4 years, and I don’t have a permanent reason to stay there, I could actually just very conveniently live in a condo for the next 4 years, enjoy the amenities, have the time of my life, little travel time, pick up the kids, bring them and then after their school is done in the next 4 years I could leave and that’s it. Or if I’m going to be assigned here, say for example, for work, and I’m not from here, I’m going to be here for only the next 2, 3 years, so there’s no need for me to buy a property for the long term. It could actually work as well.

Next time we’re going to talk more about the rentals, the advantages of rentals over buying a property, but for today we’re going to keep it to just talking about the condominium.

I think the gents will love this because it keeps your car nice and clean. Usually, the parking of the condominiums is either underground or podium (meaning it’s above ground).

Either way, it’s covered. So you won’t have the sun beating down on your car’s paint or your car everyday because in a tropical country like ours it could really get hot. And if your car garage or your car park doesn’t have a cover, it could really beat down on your car, so it keeps the cars looking nice.

Next is the lock and leave convenience for the tenant or for the owner. Now, we’re talking about a lifestyle here. Since people are always mobile, you’re not usually just in one place, so you usually go, take a vacation, you work, you go around. You don’t have to worry about anyone sneaking in.

We’ve talked about security earlier, but you can just go and go back and everything’s going to look the same, that’s it. You don’t have to worry about hiring someone to guard the house for you. You just lock it and you leave, then you get back and everything’s the same. So that is a real, major convenience right there.

So what did we talk about?

We talked about central location, so it translates to more convenience for the prospective buyer or tenant or owner. You have top-notch finishes. Third, it’s near schools. Fourth, the security’s great. Fifth, it’s great for rentals, definitely a good source of passive income. Sixth, it keeps the car nice and clean. Seventh, it’s lock and leave, which is very convenient for the tenant.

Now, before we go, I’d like to give you a bonus since you stayed this long. One of the major advantages of condominiums as well, since it’s an investment and it’s seated at the right location is capital appreciation. Capital appreciation means if you’re investing a certain amount of “x” money today, few years now, barring all unforeseen instances, if more value is perceived in the area, the property’s well kept, it proves to be a good property for most people to design a lifestyle in, then the price of the property could slowly go up. So that means to say that your money, the amount of money invested, say for example, it’s a 5 million worth property, probably in a few years time, if it grows probably 6, 5%, depending on the performance of the area, your 5 million could not be 5 million. 5 years from today, 8 years from today, that 5 million price tag that you got it for could be a bargain. It could probably be worth 7,8,9,10 million. Who knows?

As far as a condominium and property is concerned, normally if it’s in a good location, normally the prices go up barring any unforeseen instances. In addition, this also becomes a good hedge against inflation. If you’re losing your money against inflation, probably sometimes 2, 3%, and this is money we’re talking about that evaporates without you even feeling it, only a property gives you a good hedge.

So as an investment for capital appreciation and an investment hedge against inflation, a condominium or any other property could serve that purpose for you.

So that’s it for today, I hope this talk was able to give you more value about why having a condo is a good investment.