Rental Business: Passive Strategies for OFWs

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  • OFWs work abroad for economic opportunities and to gain new skills.
  • Rental businesses can be a passive income strategy for OFWs looking to capitalize on their status.
  • Location, price point, amenities, and maintenance costs should be considered when selecting a property to rent.
  • A professional manager should be hired to manage the rental unit while the OFW is away.
  • An airtight tenant contract must be written to protect landlords from potential disputes and liabilities.

Overseas Filipino Workers (OFWs) work abroad for a variety of reasons. According to the Philippine Statistics Authority, 2.3 million OFWs worked and resided in more than 200 countries worldwide. The main reason Filipinos leave their homes and families to work abroad is economic opportunity. In many cases, the salaries offered by foreign employers are significantly higher than what is available in the local market, allowing OFWs to send much-needed remittances back home to their families.

Apart from monetary rewards, many OFWs take advantage of the educational opportunities available in some destination countries. For example, some countries offer scholarships for free tuition and living expenses to international students studying specific subjects. This allows OFWs to gain new skills and knowledge they can use upon returning home to seek out better job opportunities or start their businesses.

Hoping to earn more by moving abroad, OFWs might not know they can capitalize on their status and set up a rental business as a passive income strategy. Here are a few steps to help get you started:

Identify Ideal Property

Finding the ideal property

For Overseas Filipino Workers (OFWs) looking to set up a rental business, choosing the right property is essential for success. Not only should the property be located in an area with a strong demand for rental units, but it should also meet specific standards of quality and affordability. OFWs must carefully research potential properties and identify properties that attract reliable tenants.

When selecting a residential property to rent out, there are four critical factors to consider:


Location is perhaps the most important factor when renting out residential properties. OFWs should select locations with strong demand for rental units due to their proximity to work opportunities or amenities like schools and parks. Additionally, OFWs should consider potential safety concerns, such as crime rates in the area, when selecting a location.

Price Point

The price point of a rental unit can significantly influence its appeal to potential tenants. OFWs should analyze historical data on local rental prices and ensure that their proposed rental unit’s cost falls within industry standards while providing enough profit margin. Additionally, OFWs must remember that they may need to adjust their pricing occasionally depending on market conditions or competitors’ offerings. Fortunately, you can find discounted or specialized packages on a house and lot for OFWs. Those properties can help you maintain a realistic budget for your rental business.


Rental units with access to desirable amenities such as swimming pools, gyms, or playgrounds can incentivize tenants to choose one property over another. Of course, these amenities come at an extra cost, so OFWS needs to weigh this against potential revenue generated by offering those features before committing resources towards implementation.

Maintenance Costs

OFWs setting up a rental business must have enough capital for ongoing maintenance expenses, such as repairs or upgrades required on their property over time. This should be considered when calculating projected profits since failure to maintain their rental unit might lead to tenant dissatisfaction which could reduce occupancy rates in the long run.

Have Someone Manage the Property

Getting a property manager

Having someone manage the property while working abroad is essential for OFWs who plan to set up a rental business. While trying to manage the property yourself can be tempting, it’s important to remember that you may not always be available due to work or other commitments. Hiring a local professional manager will ensure your rental business continues running smoothly even if you’re away from home.

A professional manager can help you screen potential tenants and negotiate rental agreements to get the best deal possible for your rental property. They will also collect rent payments on time and ensure all rental units are in good condition. Additionally, having an experienced manager handle any issues at the property ensures that they can be resolved quickly and efficiently without negatively impacting your tenants’ living experience.

Perhaps most importantly, a professional manager can provide peace of mind as an OFW since they know the ins and outs of local laws and regulations governing tenancy agreements and rental properties. This means that OFWs don’t have to worry about exposure to potential legal liabilities while away from home.

Draft a Good Tenant Contract

A good tenant contract is essential to running a successful rental business. It serves as the principal legal agreement between the landlord and the tenant, clearly outlining the rights and responsibilities of both parties. A tenant contract should cover lease duration, rent payment terms, security deposit information, occupancy limits, permitted uses of the property, and rules for upkeep and maintenance.

A well-written tenant contract helps protect landlords in several ways; for OFWs who own rental properties abroad but cannot physically manage them daily, having a detailed tenancy agreement is indispensable. These agreements protect landlords from any potential disputes between them and their tenants. Additionally, they ensure that all aspects of the rental arrangement are covered in case of any unforeseen events or potential liabilities.

The contract should also include provisions for addressing tenant behavior issues such as late payments or damage to property caused by tenants. Furthermore, it should contain conditions governing how disputes can be resolved if they arise between the landlord and tenant. With clear clauses that spell out what either party can do if a disagreement occurs, owners can minimize potential risks and protect their legal rights.

Final Thoughts

Setting up a rental business as an OFW can be a great way to generate passive income while abroad and support your family back home. By taking the time to research potential properties, hire a manager, and create an airtight tenant contract, you can ensure that your rental business is well-positioned for success, even when you’re away from home. With careful planning and the right strategies, OFWs can reap the rewards from their investment and create a stable source of income for their families long after returning home.

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