Rent-To-Own (RTO) schemes are many these days in most parts of the Philippines. Most property developers put up real estate properties like townhouses, duplex type houses, and they provide competitive payment monthly schemes. Which are nearly like your average rental rate for an apartment or house.
The affordable monthly payment schemes made the average hard-working Filipino. Afford a land and house in an easy way where you don’t need to shell out a big amount. The down payment is also like paying an advance and deposit on a rental apartment. Some RTO Townhouse even just require a 1-month advance payment as a reservation and down payment.
Most of my clients who are not familiar with the market pricing of Baguio City thought that there are RTO Property Developments herein the city of Pines. I always regret to tell them that there is none. Maybe, if they would compromise there are some RTO developments in nearby provinces of Baguio like Sablan and Tuba.
These are the reasons why there are NO RTO Developments in Baguio City?
Property lots are expensive and land development is costly
If you live in the lowlands where it is hot and humid and you had a chance to experience Baguio’s weather. Where it is always within 12 degrees and never has come up to 28 degrees. Then you will surely love the climate here.
Considering the exodus of people migrating here. You will personally feel the scarcity of clean-titled lot in Baguio presently. If you want to search for good properties to develop. The demand is high on real estate properties, but clean-titled big property is already unusual within Baguio. This had immensely affected the price tags of residential and commercial properties within the city. So don’t be that shock if the price of Baguio lands is almost the same as the big developed cities in the Philippines.
We should also note that Baguio is a hilly city and flat land is becoming more scarce. If you would consider the developmental cost of moving tons of earth and rocks. Likewise, the logistics in where to dump somewhere, it would really cost a hefty amount to budget for the developer. Coz unlike in the lowland areas, is not an additional cost burden because most land is flat.
Limited real estate space and flat terrain area in Baguio is scarce
Baguio City with its moniker as the “City of Pines” only has a covered area of 57.5 square kilometers (22.2 sq mi). The city has the terrain of not too flat and not too hilly and it is considered just right for human habitation.
Baguio is a small city. It has also areas that are prone to landslide, sinkholes, fault lines, and limited water sources. If you want to know more I made a blog about it click on the link “Areas in Baguio that are Prone to Geo hazards”. Baguio also has forest reserves, watersheds, and other protected areas to consider. Considering Baguio is a multi-culture and has indigenous people, there are lands that are ancestral land titles CALT (Certificate of Ancestral Land Title).
So if you are a developer and an individual who is looking for hectares of land it is usually a blend of flat and hilly terrain. Ad some pine trees on the mix which is hard to cut even in a legal way. That would also make the purchasing expensive because of high demand and adding land development it is a no-brainer that developers can’t offer an affordable rent-to-own type property in Baguio.
Construction Materials and labor is Costly
Basic construction materials in Baguio like sand and gravel sometimes double in the price unlike in the lowlands area where it is directly quarried. This is also a concern for most developers importantly its contractors to have a better logistic and construction supply. But in the end transportation cost and rental cost of land to put these construction materials always eats up on costings.
Baguio City is a highly urbanized city and construction worker and including skilled men wages are not cheap, unlike its neighboring provinces. This is why another high cost for developers is labor cost which is not viable if you want to do rent-to-own project developments.
Conclusion
There are a lot of factors to consider if we are going to see if we can offer a Rent-To-Own Project Development in Baguio. Bearing in mind all these aspects, it is a no brainer decision for developers that they would develop mid to high-end development projects.
Our best option for developers to do a Rent-To-Own scheme payment is for them to have projects on the connecting Baguio provinces. It is why BLISTTDA is created and we hope in the near future that big and local developers will be attracted to do developments within BLISTTDA.