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Buying/Leasing land or house in Philippines

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I would want a lease agreement stipulating 10 years minimum with a fixed annual rate for the 10 years (no increases in lease fees) and have an option to lease for a further 5 years should both parties agree to it, and at an agreed annual fee, which may be higher than the previous rate was.

When the lease expires after 10 years, or 15 years (whatever the case may be) we can either clear the property and return it to its original condition, or we can we can ask the owner of the land pay us a set amount of money to leave the cottages there, and he completely take over the accommodation business from us, which i would think would be a much better option for him.

If we can build the cottages at minimal cost to us, the less we lose at the end if we are required to remove them, and building them from timber and thatch makes it a very simple job to remove them if we had to, and we want the cottages to be more akin to the surrounding dwellings on this beach as well, apart from the owners 2 story "yellow and green" concrete accommodation house that is built at one end of the beach.

We just need to make sure that we can make a go of the accommodation business so it gives us a small income on top of paying the lease fees every year, and it is our intention to live there for 6 months a year after 2021 if all goes to plan.

The plan we have worked out is to build 3 cottages initially, and charge 500 to 750 peso per night for each cottage, with occupancy running at 5 nights per week per cottage, and if this works, we can make around 390,000 to 580,000 peso per year depending on what we charge, with the lease costing 100k per year, or less if we can haggle it to say 75k per year, which is what i feel it is worth, given this region has not yet developed any tourism at all, and has only basic facilities, but is within 1 hour of El Nido by boat or vehicle.

As mentioned, a Lawer with skills in Leasing will definitely be a must, but i have to put this to the land owner and i am not sure how he will take this, as we have only talked online several times, and will meet him when we get to Diapila Bay next April to meet him.


Edit by Steve: Removed link.

There is a community a municipality away from where I live that is going through hell right now based on one thing...deeds.  The man who sold the land/leases has not showed proper deed work and everything is a mess with everyone blaming everyone and courts being used for different levels and difference cases.  The whole thing is a major mess.

Now, that ARE places in the phils where there is no deeds.  Hell, my wife's family lives in such a place.  A complete set of two barangays that have not had any deeds to land at any time.  When the time for deeds came about post WWII, there were claims from everyone and even the government on the land.  So ,no one got it.  No taxes are paid on one has anything in any sense to show proof of ownership.  So who knows, maybe that's what you are dealing with. I don't know.

That said, if the place is not like one of those areas I just discussed, then I would do a damn thing without a deed.  Either the man you are going to lease from better have a deed showing himself as full owner or he's willing to sell you land with a deed.  There are FAR too many dangers that can bite you VERY hard in the butt if you move forward without a deed playing a part.  Because, like the story Samoa shared, the minute someone who DOES have that lease to that land you are wanting to lease shows could be VERY screwed.  And in the philippines?  The law will NOT side with you.  Just won't happen.  And if your wife is not from that area, chances are they will not side with her. 


--- Quote ---I asked if he had any beachfront property he can sell to me and my wife (1000sm to 5000sm) and he has such a property on the main beach but will only lease it for P100k per year for 10 years, which i think is too expensive, but i can negotiate with him i think when we go there next year.
--- End quote ---

We are in a similar business but on a different island...Where we are, 100K for that much land on a beach front would cost 10X that amount!
2 things you need to be careful of with beach properties and ANY type of commercial building requiring a business permit..

1. Research very carefully about the easement zone in that area.. Some coastal areas have NO BUILD ZONES of up to 40 Meters from high tide mark.. Where we live,it`s 30 meters.
Since the Boracay drama the DENR are issuing demolition orders around the country.
Be ready for a shed load of requirements to start a business like that from the LGU and the DENR..
Ask the DENR about waste water from septic tank.. They will probably ask you to secure a waste water dispatch permit if there is no accredited waste water treatment facility.
You will also need an ECC certificate and attend a one week seminar to become a PCO.(Pollution Control Officer) and the list goes on and on..
IMO this is not the type of business that will do well if you and your wife are not there managing it on a full time basis.. I cannot emphasis that enough.

In regards leasing,you need to be there and speak with at least 3/4 lawyers till you find one you feel confident with.. Leases here can be renewable but the terms of that renewal must be made clear in the original contract.. Lawyers here do not check any lien issues that the land may have..If the land is tax declaration,You will have to check that out yourself with visits too the DENR,the municipal hall,Barangay hall and the BIR.
If it`s titled you can check it out at The Land Registration Authority.


--- Quote from: fred on September 01, 2018, 09:31:44 PM ---
2 things you need to be careful of with beach properties and ANY type of commercial building requiring a business permit..
IMO this is not the type of business that will do well if you and your wife are not there managing it on a full time basis.. I cannot emphasis that enough.

--- End quote ---
totally agree, even if you have lease etc drawn up properly.  nobody might be interested today.  once people see you are making a little money,  many will be interested.  decent people might buy you out fairly - others might just "take over".

Thanks for the replies, don't know why my photo was removed from my last post which basically showed the beach area that we are looking at.

Anyway, we know for fact that the "land owner" has no deeds or title, he only has tax dec, and only gave me an aerial photo taken from google earth with a hand drawn outline of the location of the small property that he wants to lease to us, so that kind of annoys me, but i also needed to ask him who actually pay the taxes on that portion of land while it is under lease, him or us ?

Also, that plot he has would be about 50m wide but it goes back around 500m, and around 100m back he is building a concrete block house (its half complete) so we told him we only want the front portion back to about 50m  from the front boundary line (total of 2,500sm) which means he won't have to remove that house, all he needs to do is remove a couple of old shanties at the front, and clear the land for us.

We will be in Palawan for 4 to 6 weeks looking into this, staying in Diaila Bay and commuting back and forth between Diapila Bay and Peurto Princesa, where we hope to find a "reputable" lawer (cough cough) and do some research.

EDIT: in response to the last post, we do have several of my Wife's family members in Cavite who would be prepared to move there and run it for us, but i would be curious about how the locals there would feel having outsiders moving in and running it for us, as i got the impression from the land owner that we will employ him or someone in his family to run the accommodation side, but i told him i only wanted him to help us find a local family who can provide meals for the guests at whatever prices they asked.

If we got my Wife's niece and her hubby to run it, we would build 4 cottages so they can live in one, and basically do everything except the cooking of meals.


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