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If you're a foreigner thinking about buying a residential property in Davao City to rent it out, this guide covers everything you need to know in early 2026.
We break down the legal requirements, realistic rental yields, actual rent prices, and where tenants want to live in Davao City right now.
This blog post is constantly updated to reflect the latest regulations and market conditions in Davao City.
And if you're planning to buy a property in this place, you may want to download our pack covering the real estate market in Davao City.
Insights
- Foreigners in Davao City typically achieve around 3.5% net rental yield after costs, which means a condo purchased for 5 million pesos generates roughly 175,000 pesos in annual profit.
- The constitutional ban on foreign land ownership is actively enforced by Philippine courts, making condo units the safest and most practical investment route for foreigners in Davao City.
- Long-term rentals in Davao City usually outperform short-term rentals for remote foreign owners because Airbnb-style hosting requires business permits from Davao City Hall.
- Bajada and Ecoland neighborhoods in Davao City often deliver higher yields than premium areas like Lanang because purchase prices remain moderate while tenant demand stays strong.
- A typical 1-bedroom apartment in Davao City rents for 18,000 to 28,000 pesos per month in early 2026, which translates to roughly 310 to 480 USD or 290 to 450 EUR.
- Short-term rental occupancy in Davao City averages around 55% annually, meaning investors should budget for nearly half the year without bookings.
- Furnished apartments in Davao City rent about 15% to 25% faster than unfurnished ones, especially when targeting expats and relocating professionals.
- Rent control in Davao City mainly affects units below 10,000 pesos per month, so mid-market condo investors can set prices freely.
- Foreign landlords in Davao City almost always need a Philippine Tax Identification Number to legally collect and report rental income to the BIR.
- Reliable aircon and backup power are the two features that boost rents the most in Davao City because of the tropical climate and occasional outages.
Can I legally rent out a property in Davao City as a foreigner right now?
Can a foreigner own-and-rent a residential property in Davao City in 2026?
As of early 2026, foreigners can legally own and rent out residential property in Davao City, but only through specific ownership structures allowed under Philippine law.
The most common and cleanest route for foreigners is buying a condominium unit, because the Condominium Act (RA 4726) permits foreign ownership as long as the building's foreign ownership cap (usually 40%) is not exceeded.
The single biggest restriction foreigners face in Davao City is that they cannot legally own land directly due to constitutional prohibitions, which is why landed houses are typically off-limits unless structured through a long-term lease or a Filipino spouse's ownership.
If you're not a local, you might want to read our guide to foreign property ownership in Davao City.
Do I need residency to rent out in Davao City right now?
No, you do not need to be a resident of Davao City or even the Philippines to legally rent out your property, and most foreign landlords manage their rentals remotely.
However, you will realistically need a Philippine Tax Identification Number (TIN) to properly declare and pay taxes on your rental income, since the Bureau of Internal Revenue requires compliance from anyone earning in the country.
A local bank account is not strictly required by law, but it makes collecting rent in pesos and paying local expenses much easier in practice.
Managing a Davao City rental entirely remotely is feasible if you hire a reliable property manager or have a trusted local contact who can handle tenant issues and maintenance.
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What rental strategy makes the most money in Davao City in 2026?
Is long-term renting more profitable than short-term in Davao City in 2026?
As of early 2026, long-term renting is generally the safer and more reliable profit strategy for foreign investors in Davao City, especially those managing remotely.
A well-managed long-term rental in Davao City typically generates around 200,000 to 280,000 pesos per year (roughly 3,400 to 4,800 USD or 3,200 to 4,500 EUR), while a well-managed short-term rental can earn 250,000 to 350,000 pesos, but with higher costs and more operational effort.
Short-term renting tends to outperform financially in tourist-friendly locations like Poblacion or near the airport, and in modern buildings with strong reviews and professional management.
What's the average gross rental yield in Davao City in 2026?
As of early 2026, the average gross rental yield for residential properties in Davao City is around 6%, which is competitive compared to Metro Manila.
The realistic range spans from about 5% on the low end (if you overpay or pick a weak location) up to 7% or slightly higher for well-positioned smaller units.
Studios and 1-bedroom apartments in Davao City typically achieve the highest gross yields because their lower purchase prices relative to rent create better ratios than larger units.
By the way, we have much more granular data about rental yields in our property pack about Davao City.
What's the realistic net rental yield after costs in Davao City in 2026?
As of early 2026, the average net rental yield after all costs in Davao City is around 3.5%, which reflects the real profit landlords actually keep.
The realistic range runs from about 3% on the conservative side to around 4.5% for efficiently managed units with minimal vacancy.
The three main cost categories that eat into your gross yield in Davao City are condo association dues (which can be surprisingly high in newer buildings), property management fees (typically 8% to 10% of rent), and the vacancy buffer you need because tenant turnover is common.
You might want to check our latest analysis about gross and net rental yields in Davao City.
What monthly rent can I get in Davao City in 2026?
As of early 2026, typical monthly rents in Davao City are around 14,000 to 20,000 pesos for a studio (240 to 345 USD or 225 to 320 EUR), 18,000 to 28,000 pesos for a 1-bedroom (310 to 480 USD or 290 to 450 EUR), and 28,000 to 45,000 pesos for a 2-bedroom (480 to 775 USD or 450 to 720 EUR).
A realistic entry-level monthly rent for a decent studio in a rentable Davao City location is around 14,000 to 17,000 pesos (240 to 290 USD or 225 to 275 EUR).
A typical mid-range 1-bedroom apartment in Davao City rents for around 20,000 to 25,000 pesos per month (345 to 430 USD or 320 to 400 EUR).
A typical mid-to-high 2-bedroom apartment in Davao City commands around 32,000 to 40,000 pesos per month (550 to 690 USD or 515 to 645 EUR).
If you want to know more about this topic, you can read our guide about rents and rental incomes in Davao City.
We did some research and made this infographic to help you quickly compare rental yields of the major cities in the Philippines versus those in neighboring countries. It provides a clear view of how this country positions itself as a real estate investment destination, which might interest you if you’re planning to invest there.
What are the real numbers I should budget for renting out in Davao City in 2026?
What's the total "all-in" monthly cost to hold a rental in Davao City in 2026?
As of early 2026, the total all-in monthly cost to hold a typical rental condo in Davao City ranges from about 6,500 to 13,000 pesos (110 to 225 USD or 105 to 210 EUR).
The realistic range depends heavily on your building's condo dues and whether you use professional management, with costs running from 5,000 pesos on the low end to 15,000 pesos for premium buildings with full-service management.
In Davao City specifically, condo association dues tend to be the single largest monthly cost, often running 2,000 to 5,500 pesos depending on building amenities and age.
You want to go into more details? Check our list of property taxes and fees you have to pay when buying a property in Davao City.
What's the typical vacancy rate in Davao City in 2026?
As of early 2026, the typical vacancy rate for rental properties in Davao City translates to roughly 8% to 17% of the year, or about 1 to 2 months empty.
A Davao City landlord should realistically budget for 1 to 1.5 months of vacancy per year because tenant turnover, lease gaps, and occasional slow periods are normal even in good locations.
The main factor that causes vacancy rates to vary across Davao City neighborhoods is proximity to employment centers and universities, since areas like Poblacion and Bajada fill faster than peripheral locations.
Tenant turnover in Davao City tends to peak around March to May, which aligns with the end of school years and contract cycles, creating a short window of higher vacancy.
We have a whole part covering the best rental strategies in our pack about buying a property in Davao City.
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Where do rentals perform best in Davao City in 2026?
Which neighborhoods have the highest long-term demand in Davao City in 2026?
As of early 2026, the three neighborhoods with the highest overall long-term rental demand in Davao City are Poblacion District, Bajada, and Matina, all of which benefit from strong employment and commercial activity.
Families looking for long-term rentals in Davao City tend to prefer Matina, Talomo, and parts of Lanang because these areas offer more space, schools, and a quieter residential feel.
Students in Davao City drive strong rental demand in Poblacion and Bajada, which are close to major universities and have affordable housing stock.
Expats and international professionals in Davao City typically gravitate toward Lanang, Matina, and central Poblacion because these areas offer modern condos, reliable services, and proximity to business districts.
By the way, we've written a blog article detailing what are the current best areas to invest in property in Davao City.
Which neighborhoods have the best yield in Davao City in 2026?
As of early 2026, the three neighborhoods with the best rental yields in Davao City are Bajada, Ecoland, and Matina, where purchase prices remain moderate while tenant demand stays consistently strong.
These top-yielding Davao City neighborhoods typically deliver gross rental yields in the 6% to 7.5% range, compared to 5% to 6% in more premium areas.
The main characteristic that allows these neighborhoods to achieve higher yields is that they attract steady working-class and young professional tenants without the price premiums that come with prestige addresses like Lanang.
We cover a lot of neighborhoods and provide a lot of updated data in our pack about real estate in Davao City.
Where do tenants pay the highest rents in Davao City in 2026?
As of early 2026, the three neighborhoods where tenants pay the highest rents in Davao City are Lanang, central Poblacion, and select parts of Matina with modern condo developments.
In these premium Davao City neighborhoods, a standard 1-bedroom apartment typically rents for 25,000 to 35,000 pesos per month (430 to 600 USD or 400 to 565 EUR), while 2-bedrooms can reach 40,000 to 55,000 pesos (690 to 950 USD or 645 to 885 EUR).
The main characteristic that allows these neighborhoods to command the highest rents is the combination of modern building stock, reliable building management, and proximity to Davao City's main business and lifestyle hubs.
The typical tenant profile in these highest-rent Davao City neighborhoods includes expat professionals, executives working for multinational companies, and affluent local families who prioritize convenience and security.
We created this infographic to give you a simple idea of how much it costs to buy property in different parts of the Philippines. As you can see, it breaks down price ranges and property types for popular cities in the country. We hope this makes it easier to explore your options and understand the market.
What do tenants actually want in Davao City in 2026?
What features increase rent the most in Davao City in 2026?
As of early 2026, the three property features that increase monthly rent the most in Davao City are reliable aircon units, backup power or generator access, and high-speed internet readiness, all of which address the city's tropical climate and infrastructure realities.
In Davao City, having reliable aircon and backup power can add a rent premium of around 10% to 15% because tenants strongly value comfort during hot months and protection from occasional power outages.
One commonly overrated feature in Davao City is a swimming pool amenity, since many tenants rarely use it but it significantly increases condo dues that eat into your net yield.
One affordable upgrade that delivers strong returns for Davao City landlords is installing a modern split-type aircon unit, which costs around 25,000 to 40,000 pesos but can justify higher rent and faster leasing.
Do furnished rentals rent faster in Davao City in 2026?
As of early 2026, furnished apartments in Davao City typically rent about 2 to 4 weeks faster than unfurnished ones because they attract tenants who want a move-in-ready experience.
Furnished rentals in Davao City generally command a rent premium of around 15% to 25% over unfurnished units, which can offset the additional wear-and-tear and replacement costs over time.
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How regulated is long-term renting in Davao City right now?
Can I freely set rent prices in Davao City right now?
In Davao City, landlords have significant freedom to set initial rent prices for most residential properties, especially mid-market and premium condos that fall outside rent control thresholds.
Rent increases during a tenancy are regulated under the Philippine Rent Control Act, but this mainly affects units renting below 10,000 pesos per month, so most condo investors in Davao City can negotiate increases freely with tenants upon lease renewal.
What's the standard lease length in Davao City right now?
The standard lease length for residential rentals in Davao City is 12 months, which is the norm across the Philippine rental market for long-term tenancies.
In Davao City, the typical security deposit is 1 to 2 months of rent (roughly 18,000 to 56,000 pesos or 310 to 965 USD or 290 to 900 EUR for a 1-bedroom), plus 1 month advance rent, though there is no strict legal cap on deposit amounts.
Security deposits in Davao City should be returned within a reasonable period after lease end, minus legitimate deductions for damages or unpaid bills, though specific timelines are usually spelled out in the lease contract rather than by law.
We made this infographic to show you how property prices in the Philippines compare to other big cities across the region. It breaks down the average price per square meter in city centers, so you can see how cities stack up. It’s an easy way to spot where you might get the best value for your money. We hope you like it.
How does short-term renting really work in Davao City in 2026?
Is Airbnb legal in Davao City right now?
In Davao City, there is no single law that makes Airbnb-style rentals automatically legal or illegal, but operating one regularly is treated as a business activity that requires compliance with local regulations.
To operate a short-term rental in Davao City, you should obtain a business permit through the city's Business Permit and Licensing System, especially if you rent frequently or year-round.
Davao City does not currently have standardized annual night limits for short-term rentals, so compliance focuses more on permits and tax registration than on counting rental days.
The most common consequence for operating a non-compliant short-term rental in Davao City is receiving a notice to register your business, potential fines, or being required to cease operations until permits are obtained.
By the way, we also have a blog article detailing whether owning an Airbnb rental is profitable in Davao City.
What's the average short-term occupancy in Davao City in 2026?
As of early 2026, the average annual occupancy rate for short-term rentals in Davao City is around 55%, which means properties typically sit empty for nearly half the year.
The realistic occupancy range in Davao City runs from about 40% for poorly positioned or overpriced listings up to 70% or higher for well-managed units with strong reviews in prime locations.
The highest occupancy months for short-term rentals in Davao City are typically December through February and during the Kadayawan Festival in August, when tourist and business travel peaks.
The lowest occupancy months tend to be June through September (outside festival periods), when travel slows due to monsoon season and fewer domestic tourists visit Davao City.
Finally, please note that you can find much more granular data about this topic in our property pack about Davao City.
What's the average nightly rate in Davao City in 2026?
As of early 2026, the average nightly rate for short-term rentals in Davao City is around 2,200 to 2,800 pesos (38 to 48 USD or 35 to 45 EUR) for a typical studio or 1-bedroom unit.
The realistic nightly rate range in Davao City spans from about 1,800 pesos (31 USD or 29 EUR) for budget listings up to 3,500 pesos or more (60 USD or 56 EUR) for premium or larger units.
During peak season in Davao City, nightly rates typically increase by 300 to 800 pesos (5 to 14 USD or 5 to 13 EUR) compared to off-season, reflecting higher demand during holidays and festivals.
Is short-term rental supply saturated in Davao City in 2026?
As of early 2026, the short-term rental market in Davao City is partially saturated, especially in obvious condo clusters near the CBD and tourist areas where competition has intensified.
The number of active short-term rental listings in Davao City has been growing steadily as more investors enter the market, making reviews, photos, and pricing optimization increasingly important.
The most oversaturated neighborhoods for short-term rentals in Davao City are central Poblacion and parts of Lanang with multiple condo buildings, where new hosts face stiff competition from established listings.
Neighborhoods that still have room for new short-term rental supply in Davao City include Matina (near hospitals and the airport), Ecoland, and emerging areas with new condo developments that attract business travelers.
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What sources have we used to write this blog article?
Whether it's in our blog articles or the market analyses included in our property pack about Davao City, we always rely on the strongest methodology we can ... and we don't throw out numbers at random.
We also aim to be fully transparent, so below we've listed the authoritative sources we used, and explained how we used them and the methods behind our estimates.
| Source | Why it's authoritative | How we used it |
|---|---|---|
| The Lawphil Project (Condominium Act) | Official database hosting the full text of Philippine laws. | We used it to explain what condo ownership legally means for foreigners. We also referenced it to show why condos are the safest ownership path in Davao City. |
| The Lawphil Project (1987 Constitution) | Primary constitutional text on foreign land ownership restrictions. | We used it to explain why foreigners cannot buy land directly. We connected it to the practical reality that most foreign investors choose condos. |
| Bangko Sentral ng Pilipinas (Key Rates) | Philippine central bank's official reporting on policy rates. | We used it to anchor borrowing cost assumptions for 2026. We also referenced it for currency conversion context. |
| BSP Residential Property Price Index | Official nationwide residential price index using housing loan data. | We used it as a macro reality check for property price movements. We cross-referenced it against local Davao City listing data. |
| Bureau of Internal Revenue | Official tax authority page on withholding tax compliance. | We used it to confirm rental income tax requirements. We also referenced it for TIN registration necessity. |
| City Government of Davao | Official city government process page for business permits. | We used it to explain short-term rental permit requirements. We referenced it for practical compliance steps in Davao City. |
| Davao City Online BPLS | Official online portal for Davao City permit licensing. | We used it as the practical route for permit applications. We also referenced it for verifying current requirements. |
| Airbnb Help Center | Airbnb's official compliance guidance for Philippine hosts. | We used it to explain platform expectations for hosts. We treated it as a practical reality check, not legal advice. |
| Colliers Philippines | Major global real estate consultancy with formal research methodology. | We used it to confirm residential demand trends in Davao City. We translated their analysis into practical rental yield expectations. |
| DHSUD | National housing authority and regulator for housing policy. | We used it to frame the regulatory landscape around housing. We avoided relying on informal blog interpretations by checking official sources. |
| Philippine News Agency | Government-run newswire reporting official policy actions. | We used it to confirm rent control implementation details. We explained which rent levels are actually affected in Davao City. |
We have made this infographic to give you a quick and clear snapshot of the property market in the Philippines. It highlights key facts like rental prices, yields, and property costs both in city centers and outside, so you can easily compare opportunities. We’ve done some research and also included useful insights about the country’s economy, like GDP, population, and interest rates, to help you understand the bigger picture.
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