by: Crisq Dagami
Juan’s heart sank as he stared at his empty lot, overgrown with weeds and littered with broken bottles. For years, he’d dreamed of building a small apartment complex there—six cozy studios that could provide steady rent income for his retirement. But every contractor’s estimate made his stomach churn: “₱3 million upfront, sir.” His pension barely covered groceries, let alone construction costs. He’d lie awake at night, imagining his grandchildren’s futures slipping away, while his land—his most valuable asset—sat useless, mocking him.
Then came the breaking point. His neighbor, Mang Pedro, sold his own lot to a developer for quick cash. “At least I got something,” Pedro shrugged. But Juan refused to surrender his legacy so easily. He spent weeks researching, talking to bankers, and even joining online forums for property owners. Slowly, a plan emerged—10 steps that turned his “impossible” dream into a roadmap. He learned how to use his lot as collateral, partner with small investors, and even negotiate with Pag-IBIG for a retiree-friendly loan.
Today, Juan’s once-empty lot buzzes with activity. Workers pour concrete for the first three studios, funded by a mix of staggered loans and pre-rental deals with future tenants. “Hindi pala kailangang maging mayaman,” he laughs, watching the steel beams rise. “Basta may lupa ka at diskarte, may paraan.” His lot, once a symbol of frustration, is now his golden ticket—proof that with grit and the right steps, any landowner can turn dirt into destiny. 💪🏽✨
(Translation of Tagalog: “You don’t need to be rich—if you have land and strategy, there’s always a way.”)
Ways to Proceed with the Project
Here are practical steps and ideas Juan can explore to move forward with his construction project:
1. Build Now, Pay Later Programs 🏗️
- Juan can consider programs like Pag-IBIG Housing Loans or bank financing options. These allow him to start building without paying the full amount upfront.
- Pag-IBIG Financing offers competitive interest rates and longer payment terms, perfect for retirees like Juan1.
- Banks also provide construction loans with interest rates ranging from 5% to 12% per year and payment terms of up to 25 years1.
2. Partner with Investors 🤝
- Juan can look for investors who might be interested in funding his project in exchange for a share of the rental income.
- He can create a detailed project plan showing potential profits from rent to attract partners.
3. Project Financing 💼
- Project financing is another option where the loan repayment comes from the income generated by the project itself.
- This method is often used for infrastructure projects and could be ideal for Juan’s rental flats3.
4. Staggered Construction 🛠️
- Instead of building all six units at once, Juan could start with two or three units. The rental income from these units could help fund the construction of the remaining ones.
5. Leasing or Selling Part of the Lot 🏘️
- If Juan owns multiple lots, he could lease or sell one to generate funds for construction.
6. Consider Modular Construction 🧱
- Modular construction is faster and often cheaper than traditional methods. It might reduce upfront costs while maintaining quality.
7. Explore Government Subsidies or Grants 🎖️
- Some government programs might offer subsidies or grants for housing projects that benefit communities.
8. Crowdfunding Platforms 🌐
- Juan can use crowdfunding platforms to raise money for his project by sharing his story and vision online.
9. Personal Loans 💳
- If other options don’t work, Juan could consider personal loans from banks or lending institutions. However, he should carefully evaluate interest rates and repayment terms.
10. Rent-to-Own Scheme 🏠
- Juan could offer future tenants a rent-to-own option where part of their rent goes toward owning the unit. This could attract tenants while providing upfront cash flow.
Comparison of Financing Options
| Option | Advantages | Disadvantages |
| Pag-IBIG Financing | Low interest rates; long payment terms | Requires membership; lengthy process |
| Bank Loans | Faster processing | Higher interest rates |
| Project Financing | Repayment based on rental income | Complex setup |
| Investor Partnership | Shared risks | Reduced ownership share |
| Staggered Construction | Lower initial cost | Delayed full income potential |
Citations:
[1] https://digido.ph/articles/build-now-pay-later
[2] https://www.reddit.com/r/AusFinance/comments/12r1kt1/anyone_bought_an_apartment_in_sydney_in_the_last/
[3] https://esfccompany.com/en/articles/project-finance/project-finance-services-in-the-philippines/
[4] https://proxy.lsnj.org/rcenter/GetPublicDocument/Sites/LAW/Documents/Publications/Manuals/TenantsRights.pdf
[5] https://www.export.gov/apex/article2?id=Philippines-Project-Financing
[6] https://www.pearson.com/content/dam/one-dot-com/one-dot-com/international-schools/pdfs/secondary-curriculum/international-gcse/business/International-GCSE-Business-Z01-ANS-001-086.pdf
[7] https://blogs.worldbank.org/en/ppps/approaches-selecting-infrastructure-financing-options
[8] https://elibrary.judiciary.gov.ph/thebookshelf/showdocs/1/68507
[9] https://www.ustcivillaw.com/wp-content/uploads/2020/03/Taxation_Law_BarQA_2009-2017.pdf