drbubb Posted December 6, 2015 Report Share Posted December 6, 2015 The Makati Property Diaries - from a newcomer to Manila ... mp I originally sent these Notes out as emails to friends in Hong Kong and elsewhere, who had expressed an interest in investing in, and maybe living in Makati or Bonafacio Global City (BGC). Makati and BGC's office skyscapers have many high-paying jobs MAKATI, as described by a newcomer, who has arrived to take the handover of a flat, and get to know the place better #1 === Hello my friends, Here's an update on my trip to Manila.Overall, it is a decent trip where I am achieving most of what I intended. .There have been some surprises, both negative and positive. The biggest surprise is how long it takes to get things done, and how almost everything seem to be left half done, or needs to be redone. I am used to HK efficiency, and the idea of efficiency here, and what is acceptable are wildly different. I might give you an example or two shortly. On the good side, Filipino people have a genuine empathy. And if they see people who need help, they will often throw themselves in and help simply out of a spirit of hospitality and generosity. (You will also find this sometimes in Hong Kong, but not with the same regularity.) The new flat has a view of Manila Bay... but you might need binoculars to see it In the opposite direction, you will find the attractions of Greenbelt... : Map ... and some very nice streets of Makati .My flat is good, as good as expected. Nevertheless, there are one or two items which need remedy. The most serious one is that the air-conditioner platform is not level. I am expecting Avida to fix this. But I do not have yet a precise time and way that it will be remedied. They seem to be handling my complaint in a professional way. But the remedy may not come as fast as I want it to. I have still not finally decided whether I will rent the flat bare, semi-furnished, or put some furniture in... or instead if I might use it myself for a few months. There are arguments in favor of each of these options, and there is no clear favored option. My present inclination is to rent it out "almost bare", but I will need to sort of what to do with the PDC's (Post-dated Cheques) that the new tenant will hand over. I expected Avida Leasing to handle the deposit of the cheques at the beginning of each month. But as of right now, this is something that they are merely "considering" to do, rather than offering it as part of the service. To give you guys some idea of the returns, I paid a little under P2.1 million for the flat, and I think it may genuinely be worth something like P2.4-2.5 million (at 22 SM and 2.4 mn, that would be P109 per SM.) My flat is on the fringe of Makati, not in the heart of it. It is about a 12-15 minutes walk from Greenbelt. and very near a smaller shopping mall called Waltermart, which also has its own cinema. But this is a mall appealing to locals, not well-healed corporate chieftains and their families, and highly paid expats, as GB does. I start out with a bare studio flat on the Fringe of Greater Manila's top CBD What rent can I achieve? P12,000 (net of association fees, but before ALC's 1/12th commission) - after the commission that's just 5.5% p.a. on a P2.4 million notional valuation. I did expect to make more than that. But on my P2.1 Mn cost, the Net yield rises to 6.28%. If I spend say P250-300k, I can probably achieve something like P6,000/ month more. After taking into account the commission to the agent, that increase in rents would amortize P250k of outfitting costs in 3.8 years. Is that a good investment? Maybe, since most of the things that I buy should last at least 3-5 years. So long as I make the right choices of what to buy. But it might be easy to spend the money badly, and turn some potential tenants off. ALC tells me they have only two flats for rent "bare" at about P12k monthly, and they have 4-5 offered at P17-18k Net, or P19-20k Gross. So leaving it bare seems likely to get a tenant more quickly. Apparently, many potential tenants already own some furniture and appliance they want to move into a flat that they would rent.As for living in the flat myself, I could do so for a year or two. But the flat is really too small for me to live there comfortably, as my own actual residence in Makati. But once furnished, it would beat staying in a sterile hotel room, and be much cheaper. Something I like is the location being reasonably close to Greenbelt, and that it has a decent mall (Waltermart) next door. Some seemingly minor things may prove important to me as a tenant, like the lack of internet in public areas, and the appallingly poor state of the sidewalks in the immediate area. The frequent train whistles, which are hear all over this part of the city (including Oriental Place, where I am as I write this), are something that I would have to get used to. So at this stage, I am thinking: if Avida Leasing (ALC) can take care of the PDC's there's a high probability that I just rent it out, as is, with only a few small changes I am planning to make. This city seems quite livable, if you have a nice residence in a good area. There are things to do. I just came back from a Sunday morning stroll to the farmer's market at Legazpi Park, and I spend most of an hour relaxing in SyCip Park (next to Legazpi) reading a paper back. This is very walkable from Orientral Place, SanLo, or Kroma - three locations a that I know well. I also attended a meeting at a Meditation Centre yesterday, and had a nice lunch with some HK friends (A-- and G---A---) yesterday at the Jazz Mall. In the morning I saw their new flat at One Central. A-- paid less than P120K per SM, and got a real bargain on that. The flat is in excellent condition, and has a good view towards the Rise. I will have to ask him to take a photo every six months or so to show the progress of construction there. I think I could live very comfortably at Kroma, and probably also at The Rise. But there's a wait of 2-4 years, respectively, before those properties that I bought will be ready for occupancy. What to do In the meantime? Should I rent out my small studio, and rent somewhere larger and closer to the heart of Makati? Or can I somehow figure out how to make every centimeter work, and somehow jam into a 22 Square meter flat? (That's just XX sf, for those who do not like metric measures.)I am trying to get the photos of Avida Towers San Lorenzo (SanLo) transferred from my mobile. If I can do that, I will send a part-2. But I thought it was better to send this message as is, and struggle with the transfer of photos later.Hope to see some of you in Makati Soon. I expect to see M-- tomorrow. He's staying very nearby. Very Best Regards, - D. B. Footnote: how delays happen AES Electric heaters - buy the (cheaper) red one, and you start out where I did PS. Here's a story - installing an electric heater - note: SanLo flats are purchased without Air Conditioners, light fixtures, or electric heaters. V-- and I went to CW Home Depot, about a kilometer from SanLo. I decided when there to buy light fixtures and an electric heater. (In hindsight, I should have bought the heater right next to me, few steps away at Wilcom, and probably for the same price.) There were various models, and I asked the sales person, which one I should get. He did not tell me what factors to think about, so I went with the one made by AEG, a German company, which matched the water heater in V--'s Oriental Place flat. I thought: this is cheaper, and if it is less powered that the others, it might save money in future electricity usage. I was comforted by the fact that the store said they would send an electrician to install it. The electrician was supposed to arrive on Monday at 11am. I waited in my non-airconditioned flat and, once I was hot and sweaty, in the building lobby almost 1 1/2 hours before giving up on him. I went to lunch. And when I returned over one hour later, the guard said: There's someone waiting for you on the podium. I went there and found the electrician - he was about three hours late! He explained there had been an unusual traffic jam - which the newspapers confirmed the next day. But three hours late, is amazingly late, without phoning someone. Maybe I haven't adjusted to "philippines time" yet. We went to the flat. And I showed him the electric heater. He immediately said: I don't think that I can install that. He checked the Circuit breaker box, and told me that my connection was 32 amperes, and the electric heater that I purchased had a maximum rating of 20 amperes. I asked him what to do, and he said, I should exchange it, and the store would send another electrician. Soon after he left, I gathered up the box to take it to the store. There was a huge traffic jam, so I decided to walk over 1km with the box under my arm in the heat. When I got to the store, they exchanged it - with me paying the difference, another 20% or so.. The appropriate model was about P7800, versus P6200 for the lower rated one. There was also a problem with the traffic going back, so I walked back with the new model under my arm. The walk was not pleasant, because there are not proper sidewalks in this part of Manila. Every property owner constructs his own sidewalk or driveway, and different heights. And there is no notion that pedestrians deserve consideration, so they will happily park their cars where a walkway might be indicated. When you have a bad ankle, this sort of obstacle course is not easy to negotiate. Pedestrians need to stay aware in Manila On Friday, just four days later, another electrician came. He was on time. This one looked at the electric heater, and the area where he was to install it and said: "I cannot install it." Shocked, I asked him: Well, why not? He said: You need an electric socket there - you have only a plate. After getting over my puzzlement, that the first electrician had not told me this, I asked him what to do. He said: You can buy a socket. I said, Can you come with me while I do that? (I did not want the buy the wrong thing a second time.) He agreed to do so. This would not have happened in HK. We walked next door to Wilcom, and I bought an electric socket, and he returned with me. That trip took an extra 15-20 minutes. But he got the thing installed, and it now works fine. I suppose the very late arrivals and unreliable time schedules do tend to create a people with more "flexibility" than you will get in a more orderly country. The story has a happy ending, But there was much time wasted. I will spare you further details of similar incidents. You may have some yourself, when you come over here. ===== LINKS: At-SanLo : on Facebook Link to comment Share on other sites More sharing options...
Create an account or sign in to comment
You need to be a member in order to leave a comment
Create an account
Sign up for a new account in our community. It's easy!Register a new account
Already have an account? Sign in here.Sign In Now