The real estate market in Thailand is booming and is projected to continue this trend into the foreseeable future. High-end property development combined with economic growth, tourist attractions, and mass public transit contribute to the overall value of real estate property investments in the country.
There are numerous ways to own real estate in Thailand, even as a foreigner. While residents of foreign countries cannot hold Thai property in their name, there are ways around this, including long-term leasehold agreements in which a foreigner could secure a contract for thirty years, or a limited liability company, allowing a 49% ownership in the company which in turn owns the property.
There are several things to keep in mind before deciding which type of property to buy in Thailand. Here are five tips that may help.
DETERMINE PURPOSE OF INVESTMENT
Consider the reasons to invest in Thai property before making any decisions. If this is a holiday or vacation home, the return on investment may not be relevant to you. However, if investment-based property ownership is the goal, then it is important to keep in mind how the investment will increase in value over the next few years. Neighborhood, development trends, and current market value all contribute to this change over time.
An exit strategy can also help to determine whether property is a good investment. Price, resale value, or ability to rent it out all factor into the ability to quickly exit an investment. If the property is still under construction, personally holding all land and building permits can help to minimize risk if construction halts.
SET A BUDGET
Few things are more difficult than not being able to make rent or overextending your resources. Determine what you can afford, and then find neighborhoods that fall into that price range. Research the housing market thoroughly for trends and keep an eye out for buyer advantages.
You can leverage a real estate agent with more buying power, and researching areas that fall into your price range can benefit you as well. There’s nothing wrong with finding things that you don’t like about a neighborhood or property you view and using that for negotiating power.
IDENTIFY YOUR NEEDS
Thailand has a wide variety of houses, apartments, lofts, condominiums, high rises, and many other types of places to live. Figure out exactly what you want. If you prefer not to have stairs, you’re better off with an apartment. If you need more square footage, a house is a better option.
Living spaces are huge investments, and it’s a hard decision to reverse, so spend some time thinking about the floorplan that works for your lifestyle, or the number of bedrooms and bathrooms you need.
Location plays a big part in considering purchasing real estate as well. Proximity to shopping, restaurants, work, or other past times is a factor worth considering. Traffic in big cities like Bangkok is heavy, so take into consideration the mode of transportation you are using and how far away you are from things you like or need to do.
Survey the local area. Get familiar with hotspots or areas to avoid. Drive around to find properties for sale, infrastructure, and access to amenities. Schools, hospitals, and nearby shopping may contribute to the decision, depending on your ideal location.
Talking a walk down local streets and looking in shop windows helps to get some perspective of the landscape and feel of the area. Brochures and magazines provide insight into the activities and flavor of surroundings.
The fun part is calling an agent to get some showings set up. Talking with an agent can help tremendously in learning what you like and what you don’t, allowing you to ask questions of a real expert about the things that are important to you. An agent will be more familiar with amenities, beaches, access roads, and other neighborhood specific details.
Because the government regulates very little of the construction industry in Thailand, it is important to inspect anything you look to buy. Construction companies build fast and cheap, often at the expense of structural integrity or safety. Many condo complexes experience issues within the first five years. If you want a condo or apartment, you may be better off looking into some older construction. The lack of regulation has only been a factor for about the last fifteen years, so thankfully it doesn’t have to be overly dated.
Thailand is a paradise that at first glance often looks like a better place to visit than own property, but it’s a perfect ground for property investment. These tips will help you to select the right property for you. Do your due diligence to make sure you know what you are looking for. After you close on your brand new home, you get to enjoy zero property taxes. You read that right. Foreigners who own property in Thailand pay zero property taxes. There’s no better time than now to buy property in Thailand.
This guest article is a contribution of Paul Scott promoting CBRE Thailand specializing in providing information on latest real estate research and analysis.