What income can bring investment in real estate Phuket? Why invest in Thailand?
In this article, we will try to figure out where to look for high yield? What kind of real estate objects are better to choose for investment? Pros and cons of investing in real estate in Thailand.
The uniqueness of Thailand.
If you have ever been in this country, then, you already know about the very good climate. In winter, there is a real summer, and in summer weather is also good, even despite the raining season. The average annual temperature in Thailand is 30-33С (in the south of the country). The gorgeous Andaman Sea, amazing tropical nature, good ecology, an abundance of seafood and tropical fruits. At the same time, despite the fact that Thailand is Asia, the influence of Europe is very great here, which affected the infrastructure and way of life in this country.
Yes, it is still Asia, but much more comfortable to live than many of its closest neighbors, Phuket can generally be called Asian Miami. There are good international schools, high-quality medicine, modern infrastructure, excellent restaurants, large shopping malls, a beautiful warm sea, a modern international airport. Everything is here - in order for you to live comfortably.
For these and many other reasons, Thailand has become one of the world's most popular destinations. The Thai government is investing in the development of tourism infrastructure a lot of money to create even more comfortable conditions for staying in the country and to attract more tourists and foreign investment.
For investors in Thailand is created a comfortable environment. So, for example, there is no tax on the ownership of real estate, unlike most European countries. There are special visa conditions for investors.
Prices of real estate in Thailand have been growing steadily for many years, but you can still buy your house on the shore here for a quite reasonable money.
In addition, due to the unique geographical location, climatic and economic conditions, real estate in Thailand is in high demand for rent, and brings a good income.
What income can bring a property in Thailand?
We consider the example of Phuket, as one of the most popular resorts in the country.
This is an investment in real estate worth up to 1 000 000 USD. If you are looking for where to invest more money - then an interesting option for you will be an investment in construction in Thailand, we will talk about it separately.
Long-term investments with a fixed income from the rental of real estate.
This is one of the most popular investment options. Moreover, now many Phuket developers offer special investment return guarantee programs, so you don’t have to worry about how to rent out your property, the developer will take care of everything. In this case, the guaranteed yield from the rental will be from 5% to 15% per annum. As a rule, such proposals for the return of investment you can get from developers during the construction phase.
If you buy housing on the secondary real estate market in Phuket, then you will most likely have to rent out it by yourself or give it to a management company in Phuket. In this case, the average yield from the rental, as a rule, is 5% -8% of the property price, depending on the management efficiency and characteristics of the property.
Purchasing of a real estate in Phuket for resale.
In this case, the investment can be very profitable, or incur losses. You can earn up to 100% of the value of the purchased property, and lose money on resale. It all depends on - what do you buy, and at how much do you pay, as well as on market conditions.
Here, investors may be interested in the secondary real estate market of Phuket, you can catch a profitable deal when owners sell their assets at a very good discount so that the transaction would pass quickly.
The advantages of the secondary real estate market in Thailand:
- You can find offers at a very favorable price;
- You see that you buy, no surprises after construction;
- Market conditions are known at the time of the transaction, you can estimate the profitability of the asset.
- You can receive income from investments immediately after purchase, no need to wait for the completion of construction.
Of the minuses:
- In most cases, there is no program to guarantee investments returning and guaranteed profitability.
- Lack of interest-free installment payments. As a rule, in the short term you need to pay the full amount by the sales agreement.
- Additional costs for legal services (checking the purity of the transaction, drawing up a contract of purchase / sale);
- Choose from a limited number of options.
It has long been no secret to anyone that the prices of real estate under construction in Thailand are much lower than after construction will be completed, but risks will be higher too.
The benefits of real estate purchase during the construction phase:
- interest-free installment payments until construction will be completed (usually 1-3 years);
- A large selection of floors and layouts in the selected project;
- low cost of housing at the level of the pit;
- the cost of housing at the end of construction increases on average by 20-25%;
- guaranteed yield from 5% to 12% per annum;
- You do not need to pay for the services of a lawyer to draw up a contract;
- you get an absolutely new property.
Cons, when buying the property from a developer in Thailand:
- possible delays in construction;
- the quality of the built housing may differ from the declared one;
- it is necessary to wait for the end of construction, and this is a deferred profit;
- unknown market conditions at the time of construction complete.
One investment option does not exclude the other. You can buy a property in Phuket to get a profit from letting to rent, and sell it in case the amount of the transaction is profitable for you.
In order to choose the most profitable option for investment in real estate in Thailand, you need to take into account and compare the many characteristics of each specific offer, as well as take into account market trends.
If you do not live in Phuket, it is better to use the services of a real estate professional in Phuket who is well acquainted with the market and can help you choose the best option for your purchase. Our company is an expert in the real estate market of Phuket, and we will be happy to help you make the right choice so that you are satisfied with the property you have purchased and receive a good income from it.
Which property is better to invest?
If you want to buy apartments (condominium, condo) in Phuket - that is, then it is more beneficial to invest in real estate were in close proximity to the beach. 90% of clients coming to vacations prefer to live in an easy access to the beach and are ready to pay more for such housing. Not surprisingly to spend your long-awaited vacation in the car on the way to the beach and from the beach is not at all what you want. Plus additional expenses for rental cars.
Investing in real estate far away from the beaches could be interesting too. Such housing is in demand by expats, for them the proximity of infrastructure facilities (schools, hospitals, large shopping complexes) is much more important than proximity to the beach. Renting such housing in Phuket is cheaper but it's in demand for the long term.
If you want to buy a villa in Phuket the walking distance to a beach is not so important most tenants are ready to rent a car, but the distance to the beach should be not more than 10 minutes drive. Equally important is the size of the garden and swimming pool. Villa with a big garden is more demand in a rental. At the same time, tenants will donate by a large garden to be closer to the beach.
Our company has an extensive experience in the real estate market of Phuket. We are well aware of the rental and sale market, we are well acquainted with the legal side of real estate transactions in Thailand. We have a large base of both under construction and already finished objects. We offer you the most interesting options on the market. For us, it is important that you are satisfied with the perfect purchase. We will be happy to help you buy your perfect home by the sea!