Why you should be extra careful in investing in subdivisions selling lot only in the Philippines
One of the most common pitfalls in subdivisions selling lot only is the difficulty of coming up with a good number of families living in the community. Ideally, there has to be a good balance of the number of residents living in the community so they can organize themselves by forming Homeowners Association to be able to combat the common problems associated with community living such as drainage, water supply, security, electricity, garbage disposal, and proper maintenance of basic facilities and amenities. By experience, many developers especially in the pre-selling stage, offer lots only for sale but they leave it up to the lot owners to build their homes on their down design and at anytime they want it. Unfortunately, experience tell us that while buyers are convinced that the lots are very saleable, just too many buyers buy for the purpose of investment and no plans to build homes on the lot they bought in the near future. Too few number of residents in the area would be incapable to address the problems affecting the community in the day to day living, such as the monthly dues would not be enough to pay the security guards, drainage problems and a whole lot more.
According the HLURB, the socialized housing (high density subdivision) should have 66 to 100 families per hectare, the economic (middle density) should have 21 to 65 families, while the high end (low density) should have 20 or below families per hectare. If the subdivision development shows significant trend that will lead to this ideal number per hectare, it will be a good indication for the project development to turn into a good community. Of course, having a good community will definitely help keep the value of the real estate property high. It’s unfortunate to hear from some investors who keep asking Real Estate Brokers to sell their properties located in subdivisions with very few residents. In fact, there is one subdivision in Maribago Mactan that developed several hectares of land, the project has been 10 years now and only two houses can be seen in the entire subdivision although majority of the lots have been sold out. Lot owners here could not even sell their lots at the price they bought 5 years ago. Many lot owners keep calling us, Real Estate Brokers to help them sell their lots but unfortunately, it’s kind of difficult for us to do because it will appear that we are helping our buyers become losers like them which we hate to do. Although, the developer of such subdivision accredit us to sell their lots even until now, but such development is never found in our website www.cebubesthomes.com On the other hand, It is good to know that there are developers who are very good in helping the lot/unit owners organize themselves to form a homeowners association. One of these developers is Primary Homes who develops Brookfield & Collinwood in Mactan, Casa del Rio in Talamban, Garden Bloom Villas in Liloan, Acacia Place and Woodberry in Banawa Cebu City. They are willing to spend initially as if they are the homeowners association at the start, then initiate policies and guidelines for the new homeowners to follow. This is important for them as they strive to keep a good name in their project developments now and in the future. It is very important that as buyer, you have with you an honestreal estate broker/agent who is genuinely interested in your welfare as buyer/investor of properties and not just interested in the commission he gets or whatever lure he gets from sellers. The broker should be knowledgeable and competent enough to disclose the pros and cons of every project development and guide you all the way towards finding the property most suitable for you.
Author: Engr. Manuel R. Arengo Jr. Licensed Real Estate Broker No. 1185 PHILIPPINE REAL ESTATE
