Features of real estate in Thailand and what kind of profitability it can have
An apartment or villa is the most stable asset. Minimal inflation in Thailand and a favorable political and economic situation create a good basis for investing in real estate. In addition, the tax is minimal, which is calculated annually from the accounting of the quadrature and paid to the mayor’s office. Utility costs are also quite economical. Compared to European countries, prices are optimal here, while you can purchase both budget and luxury properties. Renting out a house can provide a stable income to the owner.
We suggest that you choose the most liquid real estate object and agree on favorable terms of purchase in order to avoid risks in the future. We find options and accompany the transaction at all stages.
What affects the value of real estate in Thailand?
The main price-forming factors:
Location
The cost increases significantly if you are close to the sea, the city center or tourist areas. Phuket and Pattaya are the leaders in terms of demand. These are well-known resorts with developed infrastructure and service. There are well-maintained beaches, many places for entertainment and shopping.
Especially important is the fact that the potential value of the property in the future depends on the location. In areas with rapidly developing infrastructure, the cost of apartments will definitely increase in the coming years, so they attract good investment opportunities.
Area and number of rooms
It is logical that the larger the square footage, the more expensive it is. But other factors are also important, for example, the quality of construction and the availability of additional amenities, as well as balconies and terraces.
For example, turnkey construction is popular in Thailand, that is, with repairs, furniture and technical equipment. And if the quality of construction was unsatisfactory, then for the past five years the object may lose its attractiveness, so it will become much more difficult to resell it. The layout is also important.
Number of floors and view from the window
The price is increased by the sea, beautiful natural or urban landscapes, and attractions by about 30-40%. Views of factories, industrial zones, construction sites, and highways reduce the cost by up to 20%.
In addition, it is important to consider the potential for renting an apartment. Tourists and expats are willing to pay more for the opportunity to enjoy a beautiful view during their stay.
Construction phase
Prices rise during the construction of the building. The most profitable offers are waiting for you at the excavation stage. After construction, the cost of the object usually increases by about 30%.
Reasons for buying property in Pattaya
The region has a strong position in the market in terms of investment attractiveness. More and more foreign buyers are trying to purchase housing here for moving or renting.
This is due to the following factors:
- A well-developed transport system. Taxis and tuk-tuks (songteo) are most often used for transportation. Both urban and intercity transport are developed. U-Tapao—Rayong—Pattaya International Airport operates here. Bangkok is nearby and even closer, 15-20 minutes away, is Utapao Airport, which serves local airlines. The Thai Government has also developed a long-term infrastructure plan aimed at accelerating economic growth. This significantly causes an increase in real estate prices in the future.
- High level of service. Pattaya is very comfortable to live in. Compared to the islands, you will quickly reach the center, where there are grocery stores, pharmacies, cafes and restaurants. Renting transport on the continent will also be cheaper.
- Education. Families with children can freely gather in Pattaya both for the winter and for permanent residence. For example, there is a private Thai-English bilingual school with a British program for international students. The Regent’s International School Pattaya and Tara Pattana International School have international status. The educational approach in them is focused on Western programs.
- The quality of medical care. Its quality index exceeds even Moscow. As a rule, doctors are trained in the USA, Germany or Japan. There are municipal and private clinics in Pattaya, each of which has its own specifics. For example, Bangkok Hospital Pattaya is the largest, most expensive and wide—profile hospital in the city.
Buying an apartment in Pattaya does not require your constant personal presence. We offer our clients the management of their real estate. The demand for rent is high, so you can count on a stable income. All relations with the owner are fixed in an official agreement. We conclude a standard contract for 12 months, in the future it can simply be extended. Our employee rents out your accommodation, and you receive money to a checking account in Thailand. By the way, if necessary, we will help you open it as well.
Types of real estate
Each new project in Thailand can be ahead of the previous one in terms of level and compliance with international standards. Let’s consider the main types of objects that are used for permanent or temporary residence:
Studio
In most cases, this is a low-budget studio apartment with an open plan, that is, without internal walls, not counting partitions in the toilet and bathroom. The area usually varies from 23 to 50 sq. m. Studios are located in condominiums (apartment buildings) with central utilities. In Thailand, foreign citizens can own only 49% of the property in an apartment building. Buying such a property in Pattaya, Bangkok or Phuket is a profitable investment in order to obtain a stable passive income. The payback rate can reach 8-10% annually.
Apartments
The apartments differ in the number of bedrooms and bathrooms. They can be divided into two types:
- one-bedroom apartment with one bedroom, bathroom, living room combined with kitchen and dining room;
- two-bedroom — two bedrooms, two bathrooms, a living room, combined or not combined with a kitchen.
Townhouse
is a low-rise residential building with several multi-level apartments, mostly with separate entrances. They also sometimes include a garage, a small garden and a swimming pool.
House
In most cases, the house is located in a village with a common infrastructure. As a rule, it is equipped with a video surveillance system and is guarded around the clock.
Villas
They are detached houses. We offer to buy real estate in villa settlements, which have their own protected area, video surveillance and public facilities: gym, public swimming pool, etc.
Visa regime and form of ownership
Buying a property in Thailand does not give you the right to obtain a residence permit, but you can get an investment visa (the amount of purchase of new housing starts from 10 million baht). You can also buy a Thailand Elite visa, which allows you to live in the kingdom for 5, 10 or 20 years. To its other advantages, you can add the following:
- attractive tax and tax residency conditions;
- the right to receive a tax number or tax certificate (a prerequisite is to stay in Thailand for at least 180 days a year);
- affordable cost of living with a high level of service;
- the possibility of using various bonuses, for example, a personal assistant, access to exclusive VIP waiting rooms, airport transfer, 24-hour concierge service.
Form of ownership for foreigners:
freehold — full ownership;
leasehold is a long—term lease.
An apartment or house can be fully owned, and land can only be leased for a long—term lease for 30 years + a two-time extension for 30 years. Apartment buildings have the status of a condominium or apartment. In the second case, all apartments can be sold to foreigners only for rent. The developer of a condominium has the right to sell only 49% of the residential area of an apartment building to foreign individuals in full ownership.
Profitability
There are two main strategies: long-term on the rental business and short-term on resale. When renting an apartment, your income can be 6-12%, depending on the area, the rental period and the class of the residential complex. The price of real estate will increase by about 3-7% every year. You can earn from 30-70% per annum on resale.
When buying a property, answer the main questions: where, for what purpose and when.
The choice of resort and location depends primarily on the budget. The two most popular destinations are Phuket and Pattaya. In the second resort town, there are almost no projects in which apartments are sold for long-term lease (leasehold), where ownership passes to the buyer only for 30 years. When buying an apartment in Pattaya, you receive a chanote — a document confirming ownership.
If your purchase goal is passive income and subsequent resale, then a studio by the sea in a good complex can generate income of up to $ 1,000 per month, that is, start paying off from the first month. If the apartment is for your own use, then you can buy an option with a larger square, which is convenient for the family, but at the same time a little further from the sea. If you rent such apartments, then the yield will be in the region of 500-700 dollars. per month.
New buildings are more profitable to buy. The lowest prices are always at the start of sales. For example, the Pristin Park 3 project has recently been launched. Prices for studios in 25 sq. m. prices start from 50 thousand dollars, and for two—bedroom apartments – from 100 thousand dollars. According to the experience of the last project from the same developer, you can get up to $ 400 for a studio. per month, for one—bedroom apartments – up to $ 600, for two-bedroom apartments — about $ 800. Resale in this project was at a minimum margin. Will the project be popular? Taking into account the launch of sales in January 2014, about 30 percent were sold, then definitely yes. Is the client ready to wait three years?
When to buy? There is an opinion that it is better to buy in the summer, because it is low season. However, this is not the case. For example, the lowest prices were recorded during the pandemic. Now there is no difference. Real estate prices are the same. The difference is only in the rental price. In summer, it is usually lower.
In addition to the condominium, villa settlements are gaining popularity. For example, in the Highland Park project, you can buy a villa from 280 sq. m. two floors with a private pool for only 270 thousand dollars. What is the advantage of villas over condominiums? They can be legally rented by the day, unless the management company explicitly prohibits it. On average, the cost of renting a villa for a day in fifteen minutes from the city where this new complex will be located is approximately $ 100. On weekends, the daily rent of a villa with a swimming pool can reach about $ 140. If you rent a villa without downtime for the whole month, then the yield will be 3 thousand dollars with investments of 300 thousand dollars.
In the city center, you can buy a villa for 470 thousand dollars. with its own swimming pool and condominium infrastructure. There will be a public swimming pool, a gym, and security. To conclude a guaranteed lease with the developer and receive 6% per annum. If you do not transfer the villa to the management of the developer, then you can rent it for 2-3 thousand dollars.
The profitability of any new project is also affected by the fact that at some stage you enter the construction site. The most profitable and at the same time risky is to buy an object at the presale stage, that is, when there is nothing yet, but the developer has already opened pre—sales. Prices here will be about 20% lower than the current market prices. Further, as the construction progresses, the cost of the apartments increases, but this is a chance for those who do not want to take risks. The project is already under construction, and there are resales on the market, that is, resales of apartments already bought by someone. As a rule, their cost is already 20% higher.
When entering the project at the stage of finishing work, it is unlikely to make money on resale, or the income will be minimal. For example, the Copacabana project on the first line of the sea. A one-bedroom apartment on a high floor with an area of 35 sq. m is under construction. m could be bought for 130 thousand dollars. Now it costs from 160 thousand dollars. and higher.
Another Avenue Residence project in the city center, but already at some distance from the embankment (about 5-7 minutes on foot), refers to secondary housing. It is a little over 5 years old, and is very popular for rent just because of the location. Here the cost of an apartment of 36 sq. m is 85 thousand dollars, and the rent is 600-700 dollars. Recently, one of the owners refused to change an apartment there for a new one, fearing that it would not bring such a profit. Of course, both location and quadrature affect profitability.
New projects are chosen because of modern amenities, infrastructure right in the complex. But, as a rule, they do not differ in large footage. It is convenient if you come here for 1-2 months, but it is not suitable for permanent residence.
Many buyers, considering buying an apartment for themselves, pay attention to condominiums that were built 5-10 or more years ago. For example, the Northpoint condominium is considered one of the most prestigious in the area. The first line, a huge green area, two tennis courts, only five apartments on each floor. The minimum area is more than 50 sq. m. There are three-bedroom apartments, which are rare in modern condominiums, as well as duplexes with sea views. This condo is chosen both for living and for rent, because there is a full-fledged large kitchen, even in studios, balconies, many storage cabinets. And, of course, the quadrature is more convenient for families with children. Many employees of large corporations rent apartments in this particular project. On average, you can ask for a studio rental here from $ 700 at a cost of $ 165 thousand. For one bedroom — from 1 thousand dollars, for two bedrooms — from 2 thousand dollars, and for three — from 2.5 thousand dollars, provided that these are annual contracts. With a monthly lease, these amounts increase. Despite the fact that this complex is on the first line and has large areas, it is impossible to say that this is a profitable investment for capitalization by 100%, but as a tool for saving money and obtaining regular rental income, this is an excellent option.
Contact us to purchase real estate in Pattaya for your own permanent residence or to find the most liquid object. Remote transaction processing is possible. Find out all the details by calling the phone number listed on the website