Choosing to enter a new market can be a scary thing to do. Property can cost a lot of money and you’re probably thinking, who do I talk to? What do I look at? Where should I go?
But, along with having a bit of patience, there are solid ways to get a footing in unfamiliar territory. Here are 4 steps to enter a new market.
There’s a lot you can do to outsource, automate or streamline your real estate operations, but, at some point, you really need boots on the ground, preferably your own. That means that, being human, you only have so much time to dedicate to any one market.
This is a case where a shotgun approach doesn’t really work. Look at the surface macroeconomic, industrial and demographic factors of your market, then, if it looks promising, book a flight (preferably to Cebu) and spend some time there yourself to get a feel for where the prime areas lie.
Some things to consider include Population Growth, GDP Growth, Major Industries, whether they’re growing, what’s happening in the current market and what rental rates and capital growth are at. Also take into account cultural factors and quirks, which can have a surprisingly large impact on the ease of transaction.
Do the Due.
Not Mountain Dew, but once you’re on the ground your job is to confirm the data you already have and add to it. How best to do that? Speak to local experts, such as Jobelle from Cebu Home Properties, as well as some locals themselves.
Often media in Cebu and the wider Philippines has less oversight towards bias, so there’s a lot of hype going around. Nonetheless local experts and having a look through local media publications can give you an idea. Filipinos are pretty responsive to hype strong media presence is also likely to maintain sustainable demand for properties (and higher capital growth).
Be careful with deals that seem too good to be true, but has sat for a while. Often, there’s a reason why people have left them, even if it’s cultural or interpersonal, which you won’t be able to find in any fact sheet or news paper.
So you’ve been speaking to a lot of people, and you’re starting to get an idea of where you want to buy, what do you do next?
What you don’t want to do is drop the connections you’ve already made. Pick out the people you felt most comfortable and trustworthy with, and stick to them!
Patronage is a big thing in the Philippines. Sticking to someone like Jobelle
, offers real benefits. In the case of real estate specialists, you get first pick of new developments, you get inside information (not illegal!) about unseen events that might affect your properties, and, if they’re really good, you get a direct line to developer management, high quality service providers, attractive financing, and government authorities.
This is your pipeline, and they are your engineer. Like any pipeline, get the best engineer you can, they’re worth their weight in gold. The percentage fees an experienced realtor, like Jobelle, charges is outweighed by the benefit.
At this point, you’re well versed in the market. It’s no longer new, much of the information you’re learning now is stuff you’ve heard before. “Gut Feeling” can only take you so far.
You’ve reached saturation. So what’s the point in waiting? Money is time, and if you’re no longer gleaning anything of value from your sources of information, it’s time to DIVE IN!
Sort out your financing options, decide on a budget and let your realtor know what outcome you are realistically expecting. There ain’t no property that can give you 100% return in 3 months or something else as amazing without an extra large and nasty helping of risk. Then plan a visit, and, if it ticks the boxes, sign on the dotted line.