Do you own a condominium unit as an investment? You may find more leasing opportunities by allowing tenants to stay for short periods of time.
Property consultancy Colliers International Philippines is urging property investors in Metro Manila to open their condominium units to short-term leasing rather than limiting themselves to tenants who rent for long periods of time. These opportunities for short-term rentals can come from websites such as Airbnb or from the leasing strategies of the property developers themselves.
Colliers noted that there’s an oversupply of studio and one-bedroom units, as the company revealed in its latest quarterly report. “Over the past three to five years, a number of developers have been very aggressive in launching studio and one-bedroom units, now accounting for 70 percent of residential stock in Metro Manila,” Colliers revealed.
Colliers noted that opening condo units to short-term leasing will address demand from important markets, namely: (1) foreign and domestic tourists, whose numbers surged in recent years; (2) millennials, who are used to the “shared economy” model of Airbnb and similar sites; and (3) overseas Filipino workers who vacation in the Philippines.
In addition, allowing these studio and one-bedroom units for short-term leasing will not only offer wider opportunities for unit owners, it will also spur movement in the property developers’ inventories. Colliers noted that the vacancy rate of ready-for-occupancy units—properties that have already been constructed—rose across all major central business districts.
Apart from Airbnb, Colliers also noted that property developers can also help condo owners with leasing, making it easier for the investor. It presented SIGLO Suites as an example. The leasing arm of listed property developer Century Properties helps their buyers lease out their units, allowing both short-term and long-term tenants. “The scheme also strengthens and enhances the security of owners and residents,” Colliers added.
“What we’re seeing now is that individual investors are becoming more adaptable to this leasing trend given the surge in acquisition of smaller (condo) units,” said Joey Roi Bondoc, research manager at Colliers. “They are now more open to offering their units to the short-term lease market.”
Lorenzo Kyle Subido is a staff writer of Entrepreneur PH