Buying and Investing in Property in Phuket
As we’ve mentioned in an earlier article, owning property in Thailand as a foreigner is definitely a good possibility. There are however quite a few rules a foreigner has to be aware of when considering to acquire property and Real Estate in Thailand or property investment Phuket. After explaining the mere procedure in our previous article, in this article we’ll extend it further and try to answer the following question:
What to do with purchased property and how can this investment turn to an advantage?
You see, Thailand has hands down one of the best economies in Asia; property is in in high demand and the market will only grow from here on over the next years to come. Due to being a very popular holiday location for people from all around the world, the economy keeps on growing and more and more tourists come here every year.
Those tourists in turn need a place to stay, and to answer the ever growing demand of holiday resorts and complexes, many businesses specialize in building holiday resorts in the best locations possible.
Since foreigners are allowed to own several properties, and these units always come in high numbers, there is a steady Real Estate market in Holiday Condominiums and holiday Villas at present in Phuket.
On top of being a great investments in general, they are very sought after in the first and second market. Many aspiring businessmen made themselves quite a name by buying and selling units – with substantial profit that is!
They’ve always known one thing to be a certain:
Investing in Property, especially in Phuket, one if not the most popular holiday locations in Thailand, will always grant a failsafe return on investment!
There are, however, certain things you have to be aware of, before making an investment like this. In this article, we’ve covered all there is to know. For further questions, remember, you can always refer to the help of the team of Real Estate lawyers here at Harwell Legal!
The laws for foreigners
As a foreigner, you are not allowed to own land in Thailand, but no laws apply on owning a building or apartment. This enables foreigners to acquire holiday condominiums with little to no hurdles.
There are many condominiums spread all over Thailand and in that regard also in Phuket. They can in turn be rented out to tourists and thus ensure a steady income for the owner. As the owner, if you decide to invest in property in Thailand, you will also be able to use those units for yourself, which could make them your second home in Thailand.
Holiday condominiums are in high demand and the developers usually sells them prior to or during construction, as a way to ensure the necessary funds. From a current perspective, we can tell you that it is getting quite hot on the market at the moment. This in turn allows certain owners to re-sell their property in a heartbeat, which in turn could free up affordable property to invest in for you.
If this is done within the first 5 years of acquisition, the seller solely has to pay a 3.3% “Specific Business Tax” by property law. To avoid this however, most owners hold on to their investment rather longer than shorter.
Holding on to an investment has the added benefit that it increases the value organically. Especially when those properties are situated in areas that are in very high demand, due to their locations, or they luxury.
High returns and safe wins happen very often in Phuket, which is only yet another reason for the high popularity in Thailand’s real estate market.
Holiday resorts are being constructed non-stop and typically include all sorts of different units from small to obnoxious.
The same applies to Villas, whereas those often come in a much lower quantity and enjoy a smaller demand. Some projects however enjoy such a high demand, that investing in them right away is a very favorable idea. Our team will gladly follow the development of the market for you and provide information on properties that might be in your interest.
It typically takes around 5 years for a condominium to be built. Buyers can inspect the project as it is being built and developers can make a big win. It benefits both sides and many such deals are made every day. Buying units in bulk is oftentimes a very common practice too, and makes it even easier to oversee the property investment in Phuket.
Sometimes, one can even end up saving more capital and thus further receive more wins. We’ll gladly guide you though every necessary step, making it profitable for you in the process.
The long-term investment in Phuket has further advantages
In terms of risk, Thailand is a very safe country to invest in. Thailand, and in that regard Phuket, has one of the best economies in Asia and tourism is very active here. Renting your Condominium out to tourist is a steady flow of income and only further benefits you. As Thailand gets increasingly popular, we can only see a steady increase in demand and a solid increase in property value. A long-term investment makes sense in that context and considering the location, it is very safe.
Another benefit is that you are able to use the Condominium for yourself too. Having several Condominiums spread all over Phuket for example can ensure a steady stream of income and enable you to plan ahead in regard to future investments and selling off smaller assets.
Owning holiday Villas is a whole different subject. While the larger living areas and more lush designs can seem appealing, a higher upkeep cost can, and should be expected as well as a higher price in general.
However, a Villa can also bring a very high and lucrative profit depending on the location and the surrounding activities there are to be visited and seen. Renting out a Villa can also guarantee higher incomes compared to Condominiums.
Holiday Condominiums are a popular property item
Of course, you can own several units and further expand your investment as you go. By Thai property law, you don’t have to pay taxes, but instead pay an annual management fee per unit upkeep, including electricity cost, staff, cleaning and water. The fee depends on the size and tier of the unit. The bigger and dense units naturally require a higher fee. If you decide to rent out your property, the rental income taxes are generally low as there are many deductions to be made.
In most cases, the rental tax isn’t above 5% and most local landlords will confirm this as being true.
Another benefit of owning several units is the possibility to stay in several of them throughout the year. Having a place to stay whenever you want to visit Thailand and knowing you can even choose between units truly is a feeling of luxury!
Further advantages of having a second home in Thailand are the many events and festivals of course. All over the year, there are many exciting and interesting events, be it Thai New Year, the many Moon Festivals or even Live performances of world-renowned artist. In Phuket, there is always something to admire and see!
Buying property in Thailand and especially Phuket is a safe and great long-term investment, and an easy way to gain a steady stream of income with a solid return on investment. The market is large, and demand is very high. Thailand’s economy keeps on growing and you can benefit from it quite substantially.
We, from Harwell Legal will gladly guide you through the whole process and represent you in all manners, to your best interest. We have very good connections and will assist you in all legal matters, from acquisition to re-selling property and Real Estate in Thailand.
If you should have further questions, feel free to send us an E-mail or give us a call for a free consultation.
We are looking forward to making your acquaintance!
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