Pinuy Binuy is where an existing entire building is torn down and replaced with a brand-new one. Just like Tama 38, the developer makes a profit by selling the additional units they build.
How it works: The building's residents contract with a developer who demolishes the outdated building, relocates everyone temporarily (the developer gives you rent money), and rebuilds a code-compliant tower. Once it's done, the original residents move into a brand-new, larger apartment at no cost.
What's the catch? Time. While TAMA 38 typically takes a couple of years, Pinuy Binuy can take 7-10 years from the first building meeting to the day you move back in.
Why so long?
- Complex Bureaucracy: Rezoning, permits, environmental and traffic studies
- Legal Issues: Especially with existing residents who don’t want Pinuy Binuy
- Developer Risk: If the market shifts or the company isn’t solid, things can stall
- And of course, demolishing and rebuilding a building takes time
I just spoke with someone who refinanced their mortgage in Bat Yam who waited nine years from signing to move-in. Today, they love their apartment, but the process was long and stressful.
Who Gains What in Pinuy Binuy:
- The Apartment Owner gets a larger, modern apartment with much higher resale value.
- The Renter has to leave when the building is demolished and if they want to return after construction, they’re likely paying 50% to 150% more in rent.
- The Smart Real Estate Investor hears early buzz about Pinuy Binuy happening and quickly buys for cheap, collects rent during the process helping cashflow, then sells/rents at a massive premium once construction is complete.
The bottom line is that Pinuy Binuy and it’s not a quick win like some TAMA 38 projects can be, but if you’re playing the long game and have the flexibility to relocate for a few years, the reward is tremendous.