Hailed as one of the ‘strongest performing economies in Asia today’ by Deutsche Bank, the Philippines is a country where the property market continues to diversify year after year. The country’s robust domestic consumption and infrastructural improvements are some of the reasons behind the successful real estate market. The demand for office space, residential properties, and retail establishments continue to appreciate, almost parallel to the upward trend of the nation’s gross domestic product.
One real estate aspect that is yet to gain popularity is a lot for rent. As expected, many people prefer to buy land instead of lease them because they think it gives them more freedom to choose what to do with it. For example, owning a plot of land allows one to construct permanent structures such as office complexes, houses, or apartment blocks. Most of those who opt to rent often use land for periodic agricultural purposes.
Enter the term ‘land lease’. This is an agreement allowing a person to purchase a home or commercial property without having to purchase the plot it sits on. Instead, the owner pays rent to the landowner. This often occurs when landowners want to profit from their acreage without having to develop it. It is also common in countries, such as the Philippines where the constitution restricts land ownership by foreigners.
There are times when renting becomes more efficient and practical than buying. Especially when it comes to your cash flow, you may not be ready to fully invest in a lot and take complete responsibility for it. While there are many arguments for buying, there are reasons why it is better to rent as well.
Leasing land reduces your overall development costs by a substantial amount. Since land acquisition is not part of the cost equation, the money can be spent elsewhere. When you want to retain your mobility, short-term leasing becomes a better alternative as well. You are not tied to the property, especially when you have plans of relocating for whatever purpose in the future. There are tax benefits to it as well. Property tax obligations remain with the owner and not the tenant. You would still however, need to pay tax on the establishment that you have built on the lot. An important advantage to leasing, especially when it comes to agricultural lots is the possibility to terminate your contractual agreement. Since farming is often a seasonal activity, renting permits a farmer to maximize on the useful period without having to worry about what to do with the land later.
Lands for rent in the Philippines vary. There are available undeveloped commercial spaces, residential lots, farmlands, and beach lots. In Metro Manila, most of these are situated in prime locations, like along the national highway and near shopping and commercial centers. If you are looking for something quieter, you will have to look outside the capital. Typically, there are several rawlands available in areas, such as General Trias, Zamboanga Del Norte and Tawala Panglao.