Investing
Buying a Tenanted Condo: Rental Income From Day One
What a tenanted condo is, how to check the lease, and how to work out the rental yield before you buy an investment unit in the Philippines.
By Buy Manila Condo · · 1 min read
A tenanted condo is a unit sold with a tenant already living in it. For investors this removes the biggest early risk of a rental property: the months it sits empty while you look for a tenant.
Why investors like tenanted units
- Income from the first month. The lease, and the rent, transfer to you.
- Proven demand. Someone is already paying to live there, which tells you the unit rents at that price.
- No fit-out downtime. These units are usually furnished and already in rentable condition.
What to check before you buy
- The lease contract. Monthly rent, end date, deposits and advance rent held, and renewal terms.
- Who holds the deposit. The security deposit should move to the new owner at closing.
- Payment history. Ask whether the tenant pays on time.
- Viewing arrangements. Viewings need the tenant’s cooperation, so plan them with your broker.
Working out the rental yield
Gross rental yield = (monthly rent × 12) ÷ purchase price × 100.
For example, a ₱6,000,000 unit renting at ₱30,000 a month earns ₱360,000 a year, a gross yield of 6%. Subtract association dues, real property tax and maintenance for your net yield, and budget separately for the one-time costs of buying a condo.
Rental demand is deepest in the business districts. If you are choosing between the two biggest, read our Makati vs BGC comparison or browse units in Makati, BGC and Pasay.
Is it right for you?
If you want a home to move into soon, a tenanted unit may not suit you until the lease ends. If you are buying for income, it can be one of the simplest ways to start.
See our current tenanted units on the all properties page or ask us for the lease details of any listing.
