How do you differentiate a good Real Estate investment from a bad one?

To expound on what we’ve learned so far, we ask ourselves, “Are all real estate investments good?”

Frankly speaking, no. While it’s safe to assume that property prices will increase forever (for as long as population grows), the rate at which prices increase is another thing to consider.

For example, prices that double in value in a shorter time period will always be more desirable than those that double in, let’s say, 10 years. The longer it takes to achieve the targeted returns, the less desirable the property is. Sadly, there is no clear-cut way to determine the exact time for a real estate investment to hit a target price–same with other kinds of investments.

However, understanding what can drive changes in property prices will help you determine whether a real estate investment is worth your time, money, and effort.

So, what can change a property’s price? It’s simply supply and demand. Some factors affect the demand and some factors affect supply. Below are several factors you should take into consideration when evaluating real estate properties on your own.

Positive effect on price Negative effect on price Comments
Developer has a track record of staying within construction and turnover schedule Developer has track record of not finishing projects or has no track record at all Affects demand because people fear that the development may not be finished.


For instance, construction of GA Sky Suites along Quezon Avenue was put on hold after its original owner, Globe Asiatique, got involved in a scam. It’s been 10 years and the project still hasn’t been turned over. Would you buy any of Globe Asiatique’s projects in the future?


Positive effect on price Negative effect on price Comments
·A lot of people buying pre-selling units

·Pre-selling units close to sold out

·Majority of available units remain unsold even after the turnover of the property If a project sells out at the early stages of pre-selling, this indicates that prices in the secondary market would continue to increase once turned over. People who weren’t able to buy in the pre-selling stage would try to buy in the secondary market instead.
Positive effect on price Negative effect on price Comments
·High diversity of buyers and tenants (local and foreign, individual and corporate)

·A lot of (professional) foreigners living in the area

·Low interest among business, ex-pat, foreign community

·Very few professional foreigners renting in the area

Foreigners, especially those from first world countries can demand higher standards of construction, maintenance, cleanliness, etc. from building administration.

If you find a lot of foreigners living in the area, it’s a sign that location, the quality, and the service are considered world-class.

Positive effect on price Negative effect on price Comments
Walking distance (maximum 15-minutes) to and from central business district

Maximum 30-minute drive to major hospitals, schools, and banks

Development is located in an inaccessible or notoriously dangerous area

Accessibility of the building itself is difficult due to traffic, one-way streets, history of flash flooding, etc.

A nice example of this would be The Grove by Rockwell in Pasig. The development, in my opinion, is top-quality. However, demand has been diffused by the fact that there’s only one way to enter: C5.
Positive effect on price Negative effect on price Comments
Lot is near the clubhouse Lot is located in a T-Junction (Tumbok) or is a perimeter lot Filipino-Chinese buyers represent a large part of the local demand for real estate.

Considering their beliefs in your purchase would likely increase the demand for the property once you decide to sell it in the future.

Corner unit, high floor, near the fire exit Unit is near the elevator
Positive effect on price Negative effect on price Comments
Located in a secure, low-crime rate area Development is located in a dangerous and/or hazardous area (flood, fault line, etc.)


After Typhoon Ondoy, real estate prices in Marikina tanked. Today, concerns for flood, proximity of the fault line are among the typical questions buyers check before purchasing a property.
Positive effect on price Negative effect on price Comments
No more vacant lots in the area A large number of new residential developments sprouting in the area


Prices of condominium units in BGC have a difficult time increasing due to the sheer supply of residential units turning over in the next 3 years

I’ve met numerous sellers who think that they could always sell their property at a higher price after a few years. This is not always true. They would probably have to wait a few more years until the demand catches up for them to fetch the price they want.

A proper analysis of these factors before purchasing your investment would definitely help you avoid this scenario.

And remember, this is NOT an exhaustive list of factors that would affect your price. Your best resort is to always choose a broker you trust, and ask them for their professional opinion.

Disclaimer: This material, which is strictly for information purposes only. The views and opinions expressed in this article are those of Juan Patag’s and do not necessarily reflect the position of RE/MAX Capital, or any other RE/MAX franchise. Any information is subject to change without prior notice. No liability whatsoever is accepted for any loss that may arise (whether direct or consequential) from any use of the information contained herein. Information Each RE/MAX franchise is independently owned and operated.



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