The Traditional Buy-to-Let Market in the Philippines Is About to Be Surpassed by Apart-Hotels

Apart-hotels, or condotels as they are known locally, are increasing in popularity among British and European investors, according to Beth Collingz, PLC Global Marketing Director of PLC International Marketing Networks, the lead marketing partner for Pacific Concord Properties Inc's Lancaster Brand of Condo Hotels in the Philippines. A large number of our apart-hotel properties in the UK and Europe have been sold in the previous two months.

If investors buy apart-hotels instead of traditional buy-to-let properties, they may be able to get into a new asset class with much higher returns.

The potential to rent arises not from residential rental markets but from the need for hotels to house guests. As a result of these three factors, investors in the Philippines are particularly interested in purchasing apart-hotels and condotels. To continue, Collingz says For starters, the developer constructs the hotel and the management business operates it, making this an entirely hands-off investment. They are compensated with a cut of the room charge every night to run and maintain the hotel and to guarantee full occupancy.

As a second benefit, investors don't have to worry about losing a lot of money each month because they get a share of the rental operations pool for all the units in the development instead of a fixed amount of money from a single rental property.

The amount of revenue is competitive with the conventional buy-to-let model. In a well-picked apart-hotel, a return on investment of 12-16% per year is not out of the ordinary. Collingz said that his firm would not promote a project to its clientele if the projected return on investment was less than 10%.

This kind of investment is poised to grow faster in the Philippines than the conventional buy-to-let rental market. There is a severe shortage of hotel rooms in Metro Manila and other regional cities like Cebu right now, so new hotels are expected to be in great demand.

Existing UK property investors seeking a greater income and no operational losses make up the bulk of the Lancaster Suites Manila's new investor pool. Apart-hotels, on the other hand, are enticing to first-time purchasers who want to get a foothold on the property ladder and bring in some extra cash every year.

The demand for apart-hotels is growing as more and more potential investors learn about the market. While it has always been difficult to get financing for international real estate, PCPI now provides all customers with a no prequalification financing option. The internal 12-year payment plan requires no initial investment, making it accessible to first-time buyers.

The Lancaster-The Atrium is a "Full Service" apart-hotel ["Condotel"] on Shaw Boulevard, Metro Manila, selling Studio, One-, Two-, and Three-Bedroom Suites. When Lancaster is finished and ready for handover in December 2010, condo owners of its top residential units will be able to enroll their properties in the Lancaster Rental Pool and collect rental income as Owner Non-Residents when they are not using their properties. According to Collingz, this means that investing in Lancaster Manila is one of the Philippines' hottest opportunities.

Each of the suites at Lancaster Suites is equipped with a kitchen. The suite will be mostly completed but not entirely furnished at the base unit pricing. The current price includes the installation of lower kitchen cabinets and work tops, as well as the tiling and partial fitting of bathrooms; the installation of laminate wood flooring in bedrooms; the installation of laminate wood flooring in the living room; and the installation of laminate wood flooring in the dining room. The cement finish paint is used on the walls and ceilings. After the units are closer to completion, Collingz said, a full optional interior fit-out package, comprising unit fittings and fixtures, furniture, furnishings, air conditioning, lighting fixtures, and appliances, would be offered.