Jump to content

Rental property formula,... turning a profit?


Recommended Posts

Davaoeno

I do not know what you mean but I am having a problem of the technical sort and I do not know if it my PC,this site,my connection or what, but it is not done on purpose.

 

chill - it was said in good humor ! You need to get 50 posts before you get full member status and people have been known to do it in 1 or 2 days by posting something on every possible thread . Yours was obviously a technical mishap - which given the state of this site lately is very common

  • Like 1
Link to post
Share on other sites
  • Replies 72
  • Created
  • Last Reply

Top Posters In This Topic

  • smokey

    16

  • Davaoeno

    14

  • Brucewayne

    12

  • Faluango

    10

Top Posters In This Topic

Popular Posts

I see you are trying to get your 50 posts in !!

You intend to build a 60 m house for 90,000 pesos ? My cost to build a 70 m house is over 750,000 pesos and i do it for a living

? No, that figure is to simplify things. I am just trying to figure the formula out, if a different amount is necessary or would make things easier, be my guest. I am just trying to figure out how

Posted Images

smokey

You intend to build a 60 m house for 90,000 pesos ? My cost to build a 70 m house is over 750,000 pesos and i do it for a living

 

 

 

 

and i think your shit is way cheap

Link to post
Share on other sites
Brucewayne

A standard formula in the USA for the rental decision is to take the value of the land plus building, divide it by 100. That would be the rental price you would ask for.

 

That would give a 100% return of investment every eight years and four months, (assuming you spent the rent instead of putting the rent into another investment which would raise your rate of return higher).

 

Assuming the land and building go up in value 5 to 10 per cent per year, even if you don't re-invest the rent you receive, you will end up with approximately a 15% to 20% annual rate of return. That's a lot better than the stock market, or anything any bank will give you.

 

 

 

I used your formula and I think it may very well be the one used here.

The house we rent now is an older, but large one, probably worth around P800,000 in it's present state and it is as large as the lot it sits on.

1% would be P8,000 and that is exactly what the rent is here.

It also works with the last house we rented on San Vicente.

A big thanks to you for the simple formula!

Now, I need to think of something else to read up on to keep the boredom away.

Link to post
Share on other sites
tobster

That's what I mean, how do these landlords ever pay for the houses if the rent is so low?

Yeah it sux here . real estate is expensive.............the rents are low............but for example for what I get in rent I can buy another house ie paying it off by the month and just wait for the land prices to rise.

Link to post
Share on other sites
tobster

A standard formula in the USA for the rental decision is to take the value of the land plus building, divide it by 100. That would be the rental price you would ask for.

 

That would give a 100% return of investment every eight years and four months, (assuming you spent the rent instead of putting the rent into another investment which would raise your rate of return higher).

 

Assuming the land and building go up in value 5 to 10 per cent per year, even if you don't re-invest the rent you receive, you will end up with approximately a 15% to 20% annual rate of return. That's a lot better than the stock market, or anything any bank will give you.

Its all long term but if you have a 5 year goal you can make some money...........

Link to post
Share on other sites
Faluango

and i think your shit is way cheap

 

12,000 PHP per m² should give you a decent home with Filipino kitchen and bathrooms

Link to post
Share on other sites
razorbackhog2

You intend to build a 60 m house for 90,000 pesos ? My cost to build a 70 m house is over 750,000 pesos and i do it for a living

I thought you had previously told me the cost to build was 15,000 to 35,000 a sqm. Was that having a builder involved?
Link to post
Share on other sites
smokey

12,000 PHP per m² should give you a decent home with Filipino kitchen and bathrooms

 

 

 

 

maybe i did not retire to live a rough life leave that for the young studs.. and as i am bigger then the average Filipino i need more then a 7 foot by 7 foot master bedroom after all i am the master of my home..

Link to post
Share on other sites
Faluango

maybe i did not retire to live a rough life leave that for the young studs.. and as i am bigger then the average Filipino i need more then a 7 foot by 7 foot master bedroom after all i am the master of my home..

 

Exactly, if you worked hard all your life you deserve to retire in style and spend that extra 6000 pesos per square meter.

 

Just what I want to say is that you can get a decent single storey house with Filipino kitchen and bathroom for 12,000 PHP per square meter, like this:

 

1315477624_223674294_1-Pictures-of--Beautiful-Dumaguete-Bungalow-Homes.jpg

 

So 70 m² would cost you a approx 850,000 PHP

Edited by Faluango
  • Like 1
Link to post
Share on other sites
Brucewayne

Its all long term but if you have a 5 year goal you can make some money...........

 

 

True in the U.S., but I don't think Filipinos do that type of planning very often.

Normally they seem to rent a place out until it falls down.

Link to post
Share on other sites
Davaoeno

I thought you had previously told me the cost to build was 15,000 to 35,000 a sqm. Was that having a builder involved?

 

Yes, that is what I said. If you go to an engineer or architect here and ask them to build you a house that is what they will quote you. It will most probably be between 20K and 30K because they know you are a foreigner and will want a certain standard. But the houses I am about to start on [ 9 of them ] are in a local subdivision and geared towards people with less means- mostly filipinos, but possibly a few foreigners. But you can do it for between 10K and 12K a m if you use cheaper materials and with only passable finishing. You usually get ceramic light fixtures, one per room, minimal electrical outlets, hollow pre fab doors, 250 peso lock sets, very cheap plumbing fixtures, some rooms with vinyl tiles , no downspouts, no landscaping, no fence, etc etc

The example that Faluango posted is right on . But dont expect anything anywhere near as well built as what you are used to in the west.

And when I quoted over 750,000 to build a 70 m house I am telling you my cost - that is with no engineer, no architect, and no profit included. That is NOT what the house will sell for . The lot costs me 4000 a m , then there is permits, filing fees, design cost etc on top of that.

Link to post
Share on other sites
smokey

Exactly, if you worked hard all your life you deserve to retire in style and spend that extra 6000 pesos per square meter.

 

Just what I want to say is that you can get a decent single storey house with Filipino kitchen and bathroom for 12,000 PHP per square meter, like this:

 

1315477624_223674294_1-Pictures-of--Beautiful-Dumaguete-Bungalow-Homes.jpg

 

So 70 m² would cost you a approx 850,000 PHP

 

 

 

 

 

dude i dont plan on leaving a lot of money to my children we all know when you do that all that does is cause them to fight.... now does this house have marble floors and a spa in the master ??

Link to post
Share on other sites
smokey

Yes, that is what I said. If you go to an engineer or architect here and ask them to build you a house that is what they will quote you. It will most probably be between 20K and 30K because they know you are a foreigner and will want a certain standard. But the houses I am about to start on [ 9 of them ] are in a local subdivision and geared towards people with less means- mostly filipinos, but possibly a few foreigners. But you can do it for between 10K and 12K a m if you use cheaper materials and with only passable finishing. You usually get ceramic light fixtures, one per room, minimal electrical outlets, hollow pre fab doors, 250 peso lock sets, very cheap plumbing fixtures, some rooms with vinyl tiles , no downspouts, no landscaping, no fence, etc etc

The example that Faluango posted is right on . But dont expect anything anywhere near as well built as what you are used to in the west.

And when I quoted over 750,000 to build a 70 m house I am telling you my cost - that is with no engineer, no architect, and no profit included. That is NOT what the house will sell for . The lot costs me 4000 a m , then there is permits, filing fees, design cost etc on top of that.

 

 

 

if this house includes a refrigerator i think i know where you can get a very short rental

Link to post
Share on other sites
Davaoeno
now does this house have marble floors

 

 

floors ??? no one said anything about floors !! Those are always an "extra" :ROFLMAO:

 

 

at least in a 60 m house built for 90,000 they are.

Edited by DAVAOENO
Link to post
Share on other sites
smokey

floors ??? no one said anything about floors !! Those are always an "extra" :ROFLMAO:

 

 

at least in a 60 m house built for 90,000 they are.

 

 

 

i personally can never get the thing on size... i have seen way to many 3 bedroom 2 bath , sala dirty kitchen ,, car port and only 60 sq meters i used to think in the us how the heck can they get away with calling a 10 ft x 10 foot a bedroom until i saw a MASTER bedroom closer to 8x8

Link to post
Share on other sites
Guest
This topic is now closed to further replies.

×
×
  • Create New...

Important Information

By using this site, you agree to our Terms of Use, Privacy Policy and Guidelines. We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue..