Real estate in Thailand is a great investment opportunity, as it offers investors the chance to benefit from its growing economy and population. However, there are some important considerations that should be taken into account before sealing the deal on any real estate investment project in Thailand.
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Property in Thailand
After you have used some help of largest construction companies in Thailand and have become a proud owner of property in the kingdom, you have to make the next step. There are two ways to make money on real estate in Thailand: renting it out and reselling it at a higher price. 90% of developers sell their properties as investment properties, promising big rental income and crazy price increases for your apartments and villas. But not all projects are as attractive as sellers describe them. Let’s figure it out.
Indicators of a project
When choosing an investment project, 5 indicators are important:
1. Location
The most interesting complexes in terms of generating income are located in the tourist zone. It is always close to the beach, restaurants and shops. And the proximity of 5-star hotels provides a high average check, that is, the cost of renting housing.
For example, Kamala Beach is being actively built up now. Several 5-star hotels are being built at the same time – Intercontinental, Twin Palms, Wyndham Hotels, Best Western. You can buy apartments in some of them.
In the future, it will be a new resort area with luxury infrastructure, unparalleled in Southeast Asia. This will ensure a solvent tourist flow, consistently high rental prices in the area and a high resale value of real estate.
2. Uniqueness of the project
Today, visitors want to be pleasantly surprised. Unique architecture, unusual design, wealth of internal infrastructure – all this affects future income. For example, some developers make a private pool or a jacuzzi on the balcony in each apartment, others – floor-to-ceiling panoramic windows with stunning views of the sea and islands, and someone arranges a cinema and a golf course right in the complex. All these chips are not just a marketing ploy, but an important aspect that distinguishes the residential complex from the crowd.
3. Availability of a hotel license
The highest rental income is shown by residential complexes (condominiums) with a hotel license, as this provides a legal basis for daily rent. According to the law of Thailand “on hotel management”, it is possible to rent without a hotel license only for a period of more than a month., whereas renting by the day is much more profitable, because the daily price is 50-70% higher. If you want to get maximum profit and not have problems with the law, then you need to choose residential complexes built according to hotel standards and with a hotel license.
4. Management
This aspect is not often taken into account by investors when choosing real estate. Although, the quality of the service provided is the key to successful occupancy. By itself, a beautiful beach and comfortable apartment layouts do not bring money. People choose a hotel or apartment based on photos on the site, and return to the place where they liked the service. The number of loyal customers is very important in any business. They provide good high profits in the long run.
Here we recommend giving preference to international hotel brands, as they have international service quality standards that have been verified over the years. They train the staff a lot and monitor the standards of quality service.
Not all, but most Thai management companies are very inferior in quality of service. This can affect your rental income and negatively affect resale, as often it is regular customers who buy apartments in complexes where they like to relax.
5. Rental program
This criterion is very relevant for those who choose the buy-sell-sell investment strategy. It is obvious that the hotel manager is not engaged in attracting tourists to your apartments for free. The hotel earns on rent with you.
There are 2 rental programs:
- Guaranteed income – the contract fixes the amount that you receive annually in your account. In other words, the hotel rents an apartment from you for several years at a fixed rate and rents it out to tourists at a higher price.
- Rental Pool – this is when a hotel combines several apartments into a pool, rents them out to an apartment, and at the end of the year divides the funds received between the owners in a certain proportion.
It is very important to choose the right rental program! Each of them has many nuances.
Real estate in Thailand
Thailand-Real.Estate website has a catalog of real estate options. Visit the website and you will be surprised by the prices and the quality of the properties offered.
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