Authored by the expert who managed and guided the team behind the Philippines Property Pack
Everything you need to know before buying real estate is included in our The Philippines Property Pack
If you're a foreigner thinking about buying a rental property in the Philippines, you're looking at one of Southeast Asia's most accessible markets for condo ownership, but the rules around land are strict.
This guide covers everything from legal ownership structures and rental yields to vacancy rates, taxes, and short-term rental regulations as of early 2026.
We constantly update this blog post to reflect the latest data and regulatory changes in the Philippine real estate market.
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 the Philippines.
Insights
- Metro Manila condo vacancy reached approximately 25% in late 2025, but Colliers Philippines projects this will ease to around 23% by 2027 as developers slow new completions to roughly 2,500 units that year.
- The Bay Area submarket in Metro Manila has vacancy rates exceeding 50%, largely due to the POGO exodus, making it the softest residential pocket in the country for landlords.
- Gross rental yields in Metro Manila condos typically range from 4% to 6% in early 2026, with Colliers noting yields remain flattish due to oversupply pressuring rents.
- Foreigners can own up to 40% of units in any Philippine condominium project under the Condominium Act, making condos the cleanest legal route for foreign buy-to-rent investors.
- The Philippine rent control cap for 2026 limits annual increases to just 1% for units renting at 10,000 pesos or below, while higher-rent properties can be priced freely.
- Short-term rental occupancy in Manila averages around 45% according to AirDNA, meaning more than half of nights go unbooked for the typical Airbnb host.
- Ready-for-occupancy condo inventory in Metro Manila sits at roughly 30,000 unsold units, equivalent to about eight years of supply at current absorption rates.
- President Marcos signed RA 12252 in September 2025, extending maximum foreign investor land leases to 99 years, though direct land ownership remains constitutionally prohibited.
- Condo association dues in Metro Manila typically run 50 to 150 pesos per square meter monthly, representing one of the largest recurring holding costs for landlords.
- Furnished units in prime CBD areas like BGC and Makati can rent 20% to 40% faster than unfurnished equivalents, particularly among expats and corporate tenants.
Can I legally rent out a property in the Philippines as a foreigner right now?
Can a foreigner own-and-rent a residential property in the Philippines in 2026?
As of early 2026, foreigners can legally own and rent out condominium units in the Philippines, but direct land ownership remains constitutionally prohibited for non-Filipinos.
The most straightforward ownership structure for foreigners is purchasing a condo unit outright under the Condominium Act, which allows up to 40% foreign ownership in any project, or alternatively leasing land for up to 99 years under the recently amended Investors' Lease Act if you want to build or hold a house.
The single biggest restriction foreigners face is that you cannot own the land under a house directly, which is why condos dominate the foreign investor rental market in the Philippines.
If you're not a local, you might want to read our guide to foreign property ownership in the Philippines.
Do I need residency to rent out in the Philippines right now?
No, you do not need Philippine residency to own and rent out a condo, and many foreign landlords manage their properties entirely remotely through local property managers.
However, you will need a Philippine Tax Identification Number (TIN) because rental income is considered Philippine-sourced income and must be declared with the Bureau of Internal Revenue.
A local Philippine bank account is not legally required, but it makes rent collection, condo dues payments, and property tax settlements significantly easier in practice.
Remote management is entirely feasible through licensed property managers who handle tenant sourcing, rent collection, and maintenance, though you should budget 5% to 15% of monthly rent for this service.
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What rental strategy makes the most money in the Philippines in 2026?
Is long-term renting more profitable than short-term in the Philippines in 2026?
As of early 2026, long-term renting is generally more profitable on a net basis for most Philippine condo investors because short-term rental costs (management fees, cleaning, furnishing, platform commissions) often eat into the higher gross revenue.
A well-managed long-term rental in Metro Manila might generate around 300,000 to 500,000 pesos (roughly $5,000 to $8,500 USD or 4,800 to 8,100 EUR) net annually for a typical 1-bedroom, while a comparable short-term rental could gross 20% to 40% more but net similarly or less after all operating expenses.
Short-term renting tends to outperform financially in high-tourism micro-locations like Boracay, parts of Palawan, and select BGC or Makati buildings that allow Airbnb and have strong corporate traveler demand.
What's the average gross rental yield in the Philippines in 2026?
As of early 2026, the average gross rental yield for Philippine residential properties is approximately 5% to 6%, with Metro Manila condos typically falling in the 4% to 6.5% range according to Global Property Guide data.
The realistic gross yield range across most investor-grade properties runs from about 4% at the low end (prime BGC and Makati luxury units) to around 7.5% at the high end (well-located mid-income condos in Cebu or secondary Metro Manila locations like Mandaluyong).
Smaller studio and 1-bedroom units in established CBDs generally achieve the highest gross yields in the Philippines because they attract a deep pool of young professional and expat renters willing to pay premium per-square-meter rates.
By the way, we have much more granular data about rental yields in our property pack about the Philippines.
What's the realistic net rental yield after costs in the Philippines in 2026?
As of early 2026, the average net rental yield after all costs for Philippine residential properties is approximately 2.5% to 4.5% for long-term rentals and 3.5% to 6% for well-managed short-term rentals.
Most landlords in Metro Manila realistically experience net yields between 2% and 4% because elevated vacancy rates (around 25% market-wide) and aggressive condo dues (50 to 150 pesos per square meter monthly) compress returns.
The three main cost categories that reduce gross yields specifically in the Philippines are condo association dues (which are unusually high by regional standards), vacancy and turnover costs (amplified by the current oversupply in Metro Manila), and BIR tax compliance including income tax, VAT or percentage tax, and documentary stamp tax on leases.
You might want to check our latest analysis about gross and net rental yields in the Philippines.
What monthly rent can I get in the Philippines in 2026?
As of early 2026, typical monthly rents in Metro Manila prime areas run roughly 18,000 to 35,000 pesos ($300 to $600 USD or 290 to 570 EUR) for studios, 25,000 to 55,000 pesos ($425 to $930 USD or 400 to 900 EUR) for 1-bedrooms, and 45,000 to 120,000 pesos ($760 to $2,000 USD or 730 to 1,950 EUR) for 2-bedrooms.
A realistic entry-level rent for a decent studio in Metro Manila's mid-market areas like Mandaluyong or Pasig is around 12,000 to 20,000 pesos ($200 to $340 USD or 195 to 325 EUR) monthly.
A typical 1-bedroom apartment in established CBDs like Makati or BGC commands mid-range rents of 30,000 to 50,000 pesos ($510 to $850 USD or 490 to 815 EUR) monthly.
A standard 2-bedroom unit in prime locations typically rents for 50,000 to 80,000 pesos ($850 to $1,350 USD or 815 to 1,300 EUR) monthly, with luxury buildings in BGC or Rockwell easily exceeding 100,000 pesos.
If you want to know more about this topic, you can read our guide about rents and rental incomes in the Philippines.
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 the Philippines in 2026?
What's the total "all-in" monthly cost to hold a rental in the Philippines in 2026?
As of early 2026, the total all-in monthly cost to hold a typical Metro Manila condo rental (excluding mortgage) ranges from approximately 6,000 to 18,000 pesos ($100 to $305 USD or 97 to 295 EUR), depending on unit size and building quality.
A realistic low-to-high monthly holding cost range for most standard Philippine rental condos is 5,000 to 25,000 pesos ($85 to $425 USD or 82 to 410 EUR), covering association dues, property tax equivalent, repairs reserve, insurance, and basic management.
The single largest cost category for most Philippine landlords is condo association dues, which typically run 50 to 150 pesos per square meter monthly and can exceed 5,000 pesos for a 35-square-meter unit in a full-amenity building.
You want to go into more details? Check our list of property taxes and fees you have to pay when buying a property in the Philippines.
What's the typical vacancy rate in the Philippines in 2026?
As of early 2026, the typical market-wide vacancy rate for Metro Manila condos is approximately 25% to 26%, though this is projected to ease toward 23% by 2027 according to Colliers Philippines.
A prudent landlord in Metro Manila should budget for 1 to 2 months of vacancy per year for a well-priced unit in an established CBD, or 2 to 4 months in oversupplied pockets like the Bay Area where vacancy exceeds 50%.
The main factor driving vacancy differences across Philippine neighborhoods is the POGO exodus impact, which devastated Bay Area demand, while established CBDs like Makati, Rockwell, and Ortigas maintain tighter vacancy below 15%.
Tenant turnover and vacancy typically peak in the first quarter (January to March) in the Philippines because many lease contracts end around year-end and tenants use the holiday period to relocate or negotiate new arrangements.
We have a whole part covering the best rental strategies in our pack about buying a property in the Philippines.
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Where do rentals perform best in the Philippines in 2026?
Which neighborhoods have the highest long-term demand in the Philippines in 2026?
As of early 2026, the top three neighborhoods with the highest overall long-term rental demand in the Philippines are Bonifacio Global City (BGC) in Taguig, Makati CBD (particularly Salcedo and Legazpi Villages), and Ortigas Center, all driven by deep pools of corporate tenants and expatriates.
Families seeking long-term rentals in the Philippines concentrate in Alabang (Filinvest and Ayala Alabang areas), Rockwell Center in Makati, and Greenhills in San Juan because these neighborhoods offer international schools, lower density, and family-friendly amenities.
Students drive strong rental demand around the University Belt in Manila, Katipunan in Quezon City (near Ateneo and UP), and Taft Avenue in Pasay (near De La Salle and other universities), creating reliable tenant pipelines for smaller affordable units.
Expats and international professionals overwhelmingly prefer BGC, Makati CBD, and Rockwell, where they find walkable streets, international restaurants, premium building management, and proximity to multinational offices.
By the way, we've written a blog article detailing what are the current best areas to invest in property in the Philippines.
Which neighborhoods have the best yield in the Philippines in 2026?
As of early 2026, the top three neighborhoods offering the best rental yields in the Philippines are parts of Mandaluyong (Boni and Pioneer edges), Quezon City nodes near Cubao and Araneta Center, and select Pasig areas along the C5 Corridor, where purchase prices remain accessible but tenant demand is steady.
Gross rental yields in these high-performing neighborhoods typically range from 5.5% to 7.5%, compared to the 4% to 5% more common in premium BGC and Makati locations.
The main characteristic enabling these neighborhoods to achieve higher yields is the gap between relatively affordable purchase prices (often 30% to 50% below prime CBD levels) and rents that remain competitive because of strong transport links and proximity to major employment centers.
We cover a lot of neighborhoods and provide a lot of updated data in our pack about real estate in the Philippines.
Where do tenants pay the highest rents in the Philippines in 2026?
As of early 2026, the top three neighborhoods where tenants pay the highest rents in the Philippines are BGC (particularly near Bonifacio High Street), Rockwell Center in Makati, and the Makati CBD core (Salcedo and Legazpi), where premium 1-bedroom units command 50,000 to 80,000 pesos ($850 to $1,350 USD or 815 to 1,300 EUR) monthly.
A standard apartment in these premium neighborhoods typically rents for 40,000 to 100,000 pesos ($680 to $1,700 USD or 650 to 1,630 EUR) monthly for 1-bedroom to 2-bedroom units, with ultra-luxury towers exceeding 150,000 pesos.
The defining characteristic of these high-rent neighborhoods is not just location but building quality and management, because tenants paying premium rents expect 24-hour concierge, reliable utilities backup, and resort-style amenities that only top-tier developers consistently deliver.
The typical tenant profile in these highest-rent neighborhoods is multinational executives, embassy staff, regional managers on expat packages, and affluent local professionals in finance and tech who prioritize convenience and security over value optimization.
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 the Philippines in 2026?
What features increase rent the most in the Philippines in 2026?
As of early 2026, the top three features that increase monthly rent the most in the Philippines are reliable backup power (generator access or inverter systems), fiber internet readiness with strong in-unit signal, and a balcony or outdoor space, all of which address the country's climate and infrastructure realities.
Reliable backup power alone can add a 10% to 20% rent premium in the Philippines because tenants have experienced enough brownouts to pay extra for uninterrupted electricity, especially those working remotely.
One commonly overrated feature that Philippine landlords invest in but tenants rarely pay extra for is a swimming pool, because most Metro Manila buildings already have pools and they become expected amenities rather than premium differentiators.
An affordable upgrade that provides strong return on investment for Philippine landlords is installing a high-quality split-type inverter air conditioner, which costs around 25,000 to 40,000 pesos but signals energy efficiency and comfort that tenants value highly in the tropical climate.
Do furnished rentals rent faster in the Philippines in 2026?
As of early 2026, furnished apartments in Philippine CBDs typically rent 20% to 40% faster than unfurnished equivalents, with the gap widening for units targeting expats and corporate relocations who need immediate move-in capability.
Furnished units in Metro Manila command a rent premium of approximately 10% to 20% over unfurnished equivalents, though the premium is highest for fully equipped "move-in ready" units with quality furniture, complete kitchenware, and reliable appliances.
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How regulated is long-term renting in the Philippines right now?
Can I freely set rent prices in the Philippines right now?
For units renting above 10,000 pesos per month, Philippine landlords have complete freedom to set initial rent prices at market rates without government caps or controls.
Rent increases during a tenancy are capped by the Rent Control Act only for units at or below 10,000 pesos monthly, with the 2026 cap set at just 1% annual increase for covered units, while higher-rent properties can negotiate increases freely at lease renewal.
What's the standard lease length in the Philippines right now?
The standard lease length for residential rentals in the Philippines is 12 months, though shorter 6-month terms are sometimes negotiated for furnished units or corporate housing.
For units covered by rent control (10,000 pesos or below monthly), landlords can legally require a maximum of 1 month advance rent plus 2 months security deposit, totaling roughly 30,000 pesos ($510 USD or 490 EUR) for a covered unit, while higher-rent properties typically follow the same market convention.
Security deposits must be returned within a reasonable period after lease termination, with landlords permitted to deduct for unpaid utilities, damages beyond normal wear and tear, and any outstanding obligations, though the Rent Control Act does not specify an exact return timeline.
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 the Philippines in 2026?
Is Airbnb legal in the Philippines right now?
Airbnb-style short-term rentals are legal in the Philippines, but they are regulated through a patchwork of business permits, tax registration, and building-level rules rather than a single nationwide STR law.
Operating a short-term rental requires registering with the BIR as a business activity, obtaining a barangay clearance and municipal business permit, and potentially securing DOT accreditation if your LGU or building treats the operation as tourist accommodation.
There is no nationwide annual night limit on short-term rentals in the Philippines, but restrictions commonly come from condo corporation house rules that may prohibit or limit stays under 30 days in specific buildings.
The most common penalty for operating a non-compliant short-term rental is building-level enforcement (fines or lease termination) rather than government prosecution, though tax non-compliance can trigger BIR penalties including surcharges and interest.
By the way, we also have a blog article detailing whether owning an Airbnb rental is profitable in the Philippines.
What's the average short-term occupancy in the Philippines in 2026?
As of early 2026, the average annual occupancy rate for short-term rentals in Metro Manila is approximately 45%, meaning the typical Airbnb sits empty more nights than it is booked.
Realistic occupancy rates range from about 30% for poorly positioned or overpriced listings to 65% or higher for top-performing units with strong reviews, prime locations, and professional management.
The highest occupancy months in the Philippines are typically November through February (coinciding with the dry season, Christmas holidays, and Sinulog festival in Cebu) and April during Holy Week, when domestic and international travel peaks.
The lowest occupancy months are generally June through September (the heart of the rainy season), when typhoon risks and school schedules reduce both tourism and business travel demand.
Finally, please note that you can find much more granular data about this topic in our property pack about the Philippines.
What's the average nightly rate in the Philippines in 2026?
As of early 2026, the average nightly rate for short-term rentals in Manila is approximately 2,350 pesos ($40 USD or 38 EUR), while Cebu City averages around 2,200 pesos ($38 USD or 36 EUR) according to AirDNA benchmarks.
Realistic nightly rates range from about 1,200 pesos ($20 USD or 19 EUR) for basic studios to 5,000 pesos or more ($85 USD or 81 EUR) for well-furnished 2-bedroom units in prime locations with strong reviews.
Peak season rates in the Philippines typically run 30% to 50% higher than off-season rates, meaning a unit averaging 2,500 pesos nightly might command 3,500 pesos in December but drop to 2,000 pesos in August.
Is short-term rental supply saturated in the Philippines in 2026?
As of early 2026, short-term rental supply in Metro Manila's main tourist and business areas is moderately saturated, with over 50,000 active listings in Manila alone creating significant competition for bookings.
The trend in active STR listings has been growing steadily, though performance varies widely based on location, reviews, and operational quality, meaning new entrants can still succeed but face a crowded field.
The most oversaturated neighborhoods for short-term rentals in the Philippines are the Bay Area (MOA complex vicinity), Makati CBD, and parts of BGC where condo buildings heavily permit Airbnb and supply has outpaced demand growth.
Neighborhoods with room for new short-term rental supply include emerging areas around Ortigas East, parts of Quezon City near Eastwood, and regional markets like Cebu IT Park where corporate travel demand is growing but STR inventory remains thinner.
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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 the Philippines, 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 |
|---|---|---|
| Lawphil - 1987 Philippine Constitution | It's a verbatim public copy of the Constitution that courts and lawyers reference. | We used it to anchor the rule that foreigners cannot directly own private land. We then explained how this shapes the condo-focused investment strategy for foreigners. |
| Lawphil - Condominium Act (RA 4726) | It's the primary statute governing condo ownership in the Philippines. | We used it to explain why condos are the main direct ownership route for foreigners. We also clarified the 40% foreign ownership cap at the project level. |
| Colliers Philippines Q3 2025 Report | Colliers is a top-tier global real estate consultancy with transparent research. | We used it to ground supply, vacancy, and rent trends in Metro Manila around early 2026. We also relied on it for CBD versus non-CBD performance comparisons. |
| Inquirer Business - Colliers Vacancy Data | It's a major national newspaper clearly attributing data to Colliers research. | We used it to triangulate vacancy levels and 2026 projections. We treated it as a cross-check so we weren't relying on a single secondary summary. |
| Global Property Guide Philippines | It's a long-running international property data publisher with consistent methodology. | We used it to anchor typical gross yield benchmarks with published data. We then adjusted ranges using local market realities like vacancy and taxes. |
| AirDNA Manila | AirDNA is a widely used institutional data provider for Airbnb performance benchmarking. | We used it to estimate short-term occupancy and typical nightly rates in Manila. We treated it as market-wide averages rather than guarantees for specific units. |
| Bureau of Internal Revenue (BIR) | BIR is the Philippine national tax authority and the official compliance gateway. | We used it to anchor the tax registration and declaration requirements for rental income. We simplified the steps into a practical landlord checklist. |
| Philippine News Agency - Rent Cap 2026 | PNA is the government's official newswire summarizing policy issuances. | We used it to pin down the 2026 maximum rent increase cap for covered units. We treated it as the current policy reality check for landlords. |
| Lawphil - Rent Control Act (RA 9653) | It's the actual law setting the rent control framework and tenant protections. | We used it for rules on covered rents, increase limits, and deposit caps. We kept the explanation simple so readers can quickly see whether they are covered. |
| Airbnb Philippines Tax Guide | It's Airbnb's official compliance guide specifically for Philippine hosts. | We used it to map BIR registration steps and tax obligations for STR operators. We translated the requirements into practical action items for landlords. |
| BSP Residential Property Price Index Q3 2025 | It's an official central bank statistical publication with consistent methodology. | We used it to describe the late-2025 price environment landlords are buying into. We treated it as context for yield expectations since prices and yields are linked. |
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.