How to invest in real estate in Thailand in 2024?
In the coming years, a steady increase in cost is expected for apartments and apartments in Pattaya, Phuket and other popular destinations. Buying resort real estate in Thailand and then renting it out is now considered as a worthy alternative to investments in Europe and the Middle East. The Thai market is becoming the best option for many investors because they see it as a golden mean between a mature and an emerging market. Investments without extremes and high risks are assumed here with a projected income in the future. Your earnings can be monthly or for a long period: 6-12 months. The owner can use the apartment for his own purposes for at least 15 days if he has a guaranteed rental contract with the developer, with a long-term contract through an agency there is no such right.
Features of the Thai economy
The country has an advantageous position in the world in terms of diverse natural resources. The harvest of tropical fruits is harvested here all year round, the same applies to tourists from all over the world.
The growth rate of local GDP can be compared with the United States. In the shortest possible time, the kingdom managed to overcome poverty and turn into a promising country with an above-average income. The Kingdom of Smiles ranks 25th in the world economy ranking, and in Southeast Asia it ranks second after Indonesia.
The stability of the baht and economic growth contribute to the expansion and development of the real estate market. In Thailand, the construction of residential complexes and commercial facilities has increased dramatically, reflecting the demand, including from foreign buyers.
Projects aimed at investors from abroad offer world-class amenities and services, which further increases their attractiveness against the background of a stable exchange rate of the baht.
Thailand is not only a rapidly developing country in Southeast Asia, but it is also considered quite safe, so more and more people prefer to live and relax here. According to the Tourism Authority of Thailand, Thailand received 28 million foreign tourists in total in 2023. Most of them came from Malaysia, just over 4.5 million people. China is in second place with 3.5 million, followed by residents of South Korea and India.
Phuket and Pattaya occupy a separate place among the resorts with the best infrastructure and direct access to the sea. After all, everyone chooses for himself where to spend his vacation or winter, but in our humble opinion both resorts are equally good for both living and investment.
For example, in Pattaya, among the advantages is a lower price per square meter of real estate, as well as proximity to the capital with its luxurious shopping malls and the largest aviation hub (Suvarnabhumi Airport), as well as a lower cost of living than in Phuket. It also features beautiful tropical nature, famous beaches, as well as proximity to other popular tourist destinations. The short rainy season, from August to October, and the average annual temperature of 30 degrees Celsius make Thailand an excellent holiday option not only in the winter months, but also all year round. This definitely affects the rental of housing, which is in constant and high demand.
Real estate in Thailand is still undervalued by the market compared to other tourist countries. Prices here start from 2 thousand dollars per sq.m. m is in a new building. Developers offer interest-free installments for the entire construction period. By investing in real estate here, you can be sure of the safety of your investments, because the Thai baht is one of the most stable currencies. He has been keeping it for more than 20 years. Even during the coronavirus, the exchange rate of the baht against the dollar decreased by only 4 baht. 32 baht per dollar in May 2020 and 36 in July 2022.
Today, the exchange rate of the Thai baht to the dollar is 36 baht. This is due to the fact that Thailand is a country with developed industry, mechanical engineering and agriculture, as well as a major transport hub. For example, it ranks first in Southeast Asia in the production of cars and first in the world in the production of pickups, exports of which reach 200 thousand units per year.
Thailand is one of the main largest suppliers of tin and tungsten in the world market. It ranks second after Canada in gypsum exports, as well as leading positions in the export of shrimp, coconuts and corn, soybeans and sugar cane. At the same time, affordable prices for services and public consumption products are maintained here, which is facilitated by low inflation, which is only 3%. For example, the fare in tuk-tuk has not changed since 2013: as it was 10 baht, it remained. GDP per capita is more than 6 thousand dollars. This is higher than in Vietnam, Malaysia and Indonesia.
Thus, the high demand for Thai real estate is not just a short—term fashion, but a real result of the country’s economy and development. Compared to Turkey, where in 2022 there was an active growth and boom in the real estate market, and this year demand fell by 70%. A number of factors contributed to the decrease in customer activity. Starting with the devastating earthquake in February and ending with an increase in the limit on the purchase of real estate for obtaining a residence permit in the amount of 50 to 200 thousand dollars.
In Thailand, the growth of the condominium market is proceeding smoothly and gradually. According to experts of the consulting company Knight Frank, real estate prices in Phuket will return to the pre-pandemic level by 2025 and will continue to grow.
There is an interesting situation when Thailand is an extremely popular destination for tourism and relocation, and the Thai real estate market is still undervalued. For only 50 thousand dollars, you can buy profitable real estate 500 m from the sea, which will bring a profit of 300-500 dollars. per month almost year-round.
About a year ago, a client approached us to buy an investment home. We picked up an object in a newly rented condominium. It cost 57 thousand dollars. A month later, we resold it for 67 thousand dollars. During this year, after the purchase, the client rented an apartment for $ 500. per month with a 75% annual occupancy rate. If you want to do the same, then contact our agency.
Of course, in addition to the resumption of tourism after the pandemic, the growth of the real estate market is also facilitated by the competent policy of the Thai government. It actively attracts tourists from all over the world, introducing new tourist programs and facilitating migration issues.
Thus, more and more tourists and winterers come to Thailand and consider it as a second home, buying and renting real estate here, which will undoubtedly affect the development of the country’s tourist and residential infrastructure.
More and more developers in the capital are looking towards Pattaya as an attractive and promising city for investment. A mainland resort with natural protection from large waves, a short distance from the capital, only 2 hours by car. Now it is part of the Eastern Economic Corridor, the largest investment project in the country’s history in large regions of Thailand with the aim of creating a benchmark industrial hub in Southeast Asia.
How to choose an object for investment?
We will select apartment options for you at the developer’s price, tell you about bonuses and discounts. The investment potential of an object depends primarily on the stage at which you invested in it. The earlier, the higher it will be. Other factors:
- distance to the sea;
- number of floors;
- district;
- view from the window;
- projected rental rate;
- the total number of apartments, or how many of them are on one floor;
- the management company.
In the context of the prospects for real estate investments, Phuket and Pattaya are among the most developed tourist locations. They always attract a lot of tourists. It combines beach holidays and well-developed infrastructure. Resorts are actively developing and offering real estate that meets international standards. It also attracts a wide range of facilities: from villas to luxury high-rises. You can find offers from local developers for the installment payment of the contract and agree on individual payment schedules.
It is recommended to buy housing under construction, since the lowest price is at the start of sales, which determines profitability. You can rent it yourself, which involves costs and risks, through agencies and under a guaranteed lease with the developer.
Between choosing an apartment and a villa, the first option is considered more profitable in most cases. There are also legal restrictions. Most often, villas are offered for long-term rent for 30 years with two extensions for another 30 years (leasehold).
The demand for apartments is always higher. In addition, the villa requires more expenses, ranging from purchase to repair and maintenance. And they are mostly located a few kilometers from the sea. And not all tourists are ready to use a car in an unfamiliar country with left-hand traffic.
The real estate market in Phuket and Pattaya is booming. Investors do not need to pay a permanent tax, and we, in turn, guarantee transparent terms of the transaction. You can deposit funds in cash or by SWIFT transfer. Registration of real estate is possible in a freehold in 100% ownership. We also offer to take over the management of your property for rent. We know how to make your apartment work in your absence. With an annual contract, tenants live, with a 6—month contract, tenants live, in the remaining months the owner can do what he wants. With a monthly payment, the owner can indicate when to leave free dates and not rent the apartment during this period.
Features of renting an apartment with our company
The terms of cooperation are prescribed in the real estate management agreement. As a standard, we conclude an agreement for 12 months, and in the future we extend it. Before signing the contract, an inventory of the property and the most valuable items is carried out. The condition of the repair, furniture is fixed in the photos that are attached to the contract. An insurance deposit for compensation of losses from damage to property is separately negotiated. The tenant pays it in the prescribed amount before check-in.
When an application for an apartment from tourists is received, our manager contacts you to clarify whether the apartment will not be used during the specified period. Next, the tenant makes a deposit, and the rest of the money is deposited upon check-in. We transfer the funds from the transaction to your current account in Thailand. If necessary, we will help you open it. And you can use the money from it anywhere in the world.
When the lease period ends, we accept the apartment, conduct an inspection. Electricity, water and cleaning costs are deducted from the security deposit. We help our clients regulate the rental flow and work with tourists from different countries.
Investment options
The maximum level of income is provided by renting real estate for a short period of time. Long-term lease in most cases involves the presence of sublease provisions in the contract. For example, this option is similar to short-term rental of a villa through a management company. The difference lies in the fact that in this case, the transaction is managed not by the operator – a legal entity, but by the tenant – an individual.
In some locations in Phuket and Pattaya, you can also consider buying real estate for long-term rental. For example, if the apartment is located far from the coast, then it can be rented for a long time to “winterers”. But to focus on this income option, you need knowledge and experience. Compared to a monthly rental, the profit will still be less even with stable occupancy all year round.
Depending on the chosen rental period, area and class of residential complex, your income may be 6-12%. Buying a property at an early stage is the first secret of a successful investment. Short-term rentals can bring from 10% per annum. Stable income implies the right choice of object, floor, location and many other factors. We suggest you find the most liquid real estate options and make an income forecast.
Ways to increase the profitability of investments
To increase income from investing in real estate in Thailand, you can follow several recommendations:
Purchase at the start of sales.
At this stage, the most favorable conditions are waiting for you. Among the promotions, there is often an offer of free furniture. In most cases, they offer to build attractive payment schedules.
The pay back scheme.
Buying a property without installments at the excavation stage is a double benefit. More affordable housing costs + profitability of up to 5% per annum from developers.
When buying a property in Thailand, you become the owner and your investments are guaranteed to be protected by property documents. Execution of the transaction is possible both in person and remotely. Funds for the purchase can be transferred without proof of income. Virtually zero income for owning real estate in Thailand. There is also no tax on receiving income from the assignment of the sale of a contract in a new building. We recommend only those projects that you are confident in.