- Updated On:
- October 12, 2020
Dorm for Sale in the Philippines
Workforce Housing Facility located in Makati & BGC
Let’s face it: crazy mind-numbing traffic is a fact of life in Metro Manila. Imagine working in BGC or Makati while living in Quezon City. That ride was probably just one hour a few years back. Now it can reach an hour and a half. Or worse, if you’re lucky, as in rush-hour, pouring rain, jam-packed EDSA lucky, the length of 3 TV episodes back-to-back.
Did you know EDSA has a capacity of 245,000 vehicles only? The average daily volume of EDSA from Jan to Aug 2019 was 410,000 vehicles.
Thus, the rise of dormitories near BGC (and now, even INSIDE BGC) and Makati. Employees just want a place where they can crash after a hard day’s work and not worry and stress over the traffic.
But Renting a Room is Too Expensive
You might be thinking: wouldn’t renters just want to look for a room for rent in Makati or a room for rent in Taguig? One word: cost.
The same reason why, even if there are larger dorms around the area from MyTown and now, even from Ayala Land, the monthly lease on offer may make potential renters think twice.
Typical per-bed rates range from P3,600 to as high as P22,900.
Vacancy rates are usually below 10% with a ready pipeline of tenants, who have paid a reservation, waiting for a bed to be vacated.
Covid-19 and the Metro Manila Lockdown
The lockdown that Metro Manila, and certain areas of the Philippines, endured from March 2020 onwards really threw a wrench on the operations of practically every company. It was a boon for some companies, e-Commerce, etc., and a bane for a lot of others: retail, tourism-related businesses, etc.
BPO (Business Process Outsourcing) companies, which were allowed to operate in a reduced capacity, had to scramble to find residential accommodations for their staff. Yes, some employees were allowed to work remotely from their homes. But, for mission-critical work, that could only be done inside office premises, they needed to find a place for their people to stay-in since they can’t get in and out of cities because of the quarantine lockdown and the lack of public transportation. If you work in Makati, for example, you needed to stay inside Makati.
Now, even in a more relaxed general quarantine, entire floors are booked by companies to house their teams to minimize the risk of exposure to the virus.
What happens if there’s a vaccine already and everything goes back to normal? Well they won’t find a vaccine for the traffic.
A Not-so-New Recurring Income Real Estate Product
Owning, operating, running a dormitory to rent it out to tenants to generate rental income is not exactly new. It’s been there for ages. Remember your dormitory landlord from your college days?
What’s new is the rising demand for dormitories for professionals, co-living spaces, co-housing, workforce housing….
While the more sophisticated and robust versions of co-living and co-housing have not yet arrived in Philippine shores, workforce housing, given the traffic plus the need to mitigate team exposure to hazards, is really needed.
Enter: Brand-New Workforce Dormitories that a Savvy Real Estate Investor Can Buy
These whole dormitory buildings are designed, constructed, commissioned, operated and sold to a real estate investor to generate recurring income.
In most cases, the real estate investor, now the owner of the facility, engages the services of the developer/dormitory operator, to run the property.
Maintenance, marketing, collections, ejections, property management, cleaning, etc. are all done for the new owner. All the new owner needs to do is wait for the income deposits to their bank account.