R.E.S.T Real Estate Specialists Thailand Blog
Thinking of purchasing an investment condo of plan
There are many Investment properties available either condominiums, land & house, businesses,
Some basic principles applying in each case when buying off-plan, looking at condominium’s as a first step we can offer a clear guide.
Off-plan investments in Thailand or anywhere in the world can offer investors the ability to buy at the base price and achieve maximum ROA (return on investment) read more for a step by step guide.
Making use of your property for a number of years will allow you to benefit from a rental income. Meanwhile you can enjoy a holiday home and watch your property appreciate in value with the capital gains.
Buying a condo allows none Thai nationals to buy freely, without the need to establish a limited company, provided the foreigner to Thai ownership ratio on your chosen development does not exceed 49% this is a very clear point in Thailand.
If you choose to buy in a Thai Company or in Thai name (if you have a Thai partner) you can manage to get even better savings as many developers will offer a substantial discount for buying in Thai Name. Whilst you can save on the purchase, please note that whenever you have a Thai company, you will be required to submit balance sheets each year in arrears, so there’s an ongoing cost associated with this option the cost depends on the value of the condominium.
The new Thai government has introduced and is strictly enforcing building standards and regulations to ensure the quality in Thailand is high, and that it is also constructed so as not to have a negative impact with the local environment. All new projects must have EIA (Environmental impact assessment) approval before construction may commence. Obviously, as development projects are completed, it may be possible to purchase completed property but this will be priced substantially higher as it is also generating the return on investment for the original investor who take advantage of off plan prices the resell on completion.
Quality new investment opportunities in Thailand are generally located in areas that offer the greatest potential for capital appreciation on the property. They are invariably in popular tourist areas that will allow investors to generate rental returns, or close to the ever expanding industrial areas. Buying off-plan allows investors to purchase in areas that will attract major rental demand and price appreciations at the lowest possible prices, let’s not forget that we have to look at the surrounding areas and what is planned for the future something that is not great value today five or ten years could be a very attractive property to purchase, Those who purchase in quality developments early will see the greatest returns on their investment. As they say early bird gets the worm.
Buying off plan enables you to pick & choose your own unit
Why and how can property be cheaper if bought off-plan how does it work?
The developer of any project is always exposed to risk. They want to cut this risk as quickly as possible and limit any bank loans they may have. They do this by selling units off-plan at lower prices encouraging investors to buy multiple unit as the investors cannot see a physical property at this stage and rely on the location, show rooms, artist impressions, diagrams and computer simulations. This is also a risk for the investor too of course and so it works both ways, although by doing your due diligence on the project and development company and having a conservative risk strategy, those risks can be shortened.
In addition to the best purchase price, the investor also benefits from finance structures too and can spread the payment across the period of construction. The investor usually only needs to pay around 25% of the value of the purchase in the form of a deposit, a percentage paid in installments over the period of construction the final installment is payable on completion, the stage payments are 0% at interest.
Once your decision has been made to invest in an off plan project here in the Thailand property market, you then need to decide which strategy you will use to achieve your best return on investment. Are you simply looking to ‘flip’ the property, i.e sell it as soon as the development is finished or sell the contract during construction, or are you adopting a longer term and perhaps more of a financial and fruitful investment plan in the form of “buy-to-let”. If you think this is too difficult if you are not residing in Thailand there is options available like using a reputable property management, company such as Real Estate Specialists Thailand Co., Ltd
Maximizing Your Return on Investment in Pattaya property market with the least amount of work.
Purchasing early meaning at the start of a development, the developer offers units well below market value for the reasons mentioned above, often termed “Pre-Launch” prices. It is also important to buy as soon as possible as the property market is developing at a rapid rate in Thailand prices are still very competitive but already rising. Investors who purchase now will see the greatest profits.
Early bird gets to Purchase the best units, early investors can purchase the most sought after condominiums on any given development the best units always offer highest capital appreciation in the quickest turnaround time, and will also command the greatest rental incomes.
Obviously the purchase Price will increase as development matures, as the developments construction commences the units’ value rises. There is normally a completed show home at this stage so buyers are taking less of a risk without the need to rely completely on plans.
Price appreciates as more units sell – As more units are sold the price of the remaining units rises. This is due to buyers being able to see current units as mentioned above. Often there is a phase payment structure in operation which mirrors the increasing value of the properties. To the early investor this means that should you decide to sell your property, it will be worth considerably more at this stage than when you made your initial purchase.
Where to buy in Thailand? As this section is devoted to ‘investment’ then there’s only one place worth considering and that is Pattaya which is growing at an amazing rate. There are some really beautiful scenic places around Thailand including other resort areas such as Phuket and Koh Samui where I have lived and worked previously but this is where the shrewd investment is happening. Pattaya is regarded as one of the biggest growth areas and is developing into an International City, something which has been recognized by world class hotels such as Hilton, Centara, Amari, Movenpick Hard Rock Holiday Inn and Marriott’s who have all expanded here in recent years. The Thai government has been investing heavily in the area with the highway from Parattaya to Bangkok having a major overall and expansions making the trip quicker than ever before to Bangkok, The domestic airport of Utapo is now being transformed into a full international standard airport some international flights are already using the airport for inbound and out bound flights. There is an amazing array of restaurants, shopping malls and more than 19 international standard golf courses are within an hour’s drive. Pattaya’s other leisure attractions range from the sedate (tropical gardens, Buddhist temples, zoos, fishing and sailing) to the more active, amusement parks, museums, go-karts, horse riding and shooting ranges), some of the best international schools and hospitals you will find anywhere giving the very best service. Ensuring a constant flow of tourists and expats not merely looking for beach pursuits, Pattaya and the surrounding areas have something for everyone young or old.
The Eastern Seaboard region of Thailand is home to many huge industrial estates and many more opening, with large international companies having production facilities here. Car makers Ford, Isuzu and GM all have production plants here, with many expatriate staff. Engineering, shipbuilding, petrochemical, Oil & gas industry are also well established on the Eastern Seaboard. Just to the north approximately twenty minutes’ drive of Pattaya is Laem Chabang port, a deep sea port, from which a large portion of Thailand’s import/exports enter and leave.
Why purchase in Pattaya?
Known among beach lovers and those familiar with its vibrant nightlife, Pattaya is a good place to live and invest. It’s a popular weekend escape from Bangkok and is just over an hour from Suvarnabhumi Airport. In addition to being a popular tourist resort town, it is also attracting more and more permanent expat residents and families, many of whom are employed along Thailand’s eastern seaboard. This all helps keep demand for apartments in Pattaya robust and the economy upbeat.
Condos and apartments are the prime option for foreigners investing in Thailand property, since up to 49 per cent of the total units in a single building can be owned by non-Thais. This means that Pattaya condos for sale are the primary property sector in this city, the end of 2015 and beginning of 2016 has now shown us that the demand is still higher than normal levels. Now we have great opportunities and prices. Pattaya is still considered one of the best condos investment opportunities in Thailand and leasing prospects are considered strong with the close proximity and easy access to the industrial areas and business sectors.
Pattaya is very attractive to both westerners and Thai’s because it is very active and much cheaper than other places in Thailand. Pattaya is now only an hour’s drive from the new airport and about 1 ½ hours to Bangkok. This has been a great improvement for westerners, as well as, the Bangkok population who would like to just get away for the weekend and relax on the beach. The most popular places in Pattaya are Jomtien Beach, Pratumnak Hill and Bangsaray (quite fishing village with pristine beach) but the landscape shifts as does the demand, so if you’re looking to buy as an investment please make sure you do your homework first with so much choice doing your due diligence will give you the best property for ROI or even your personal residence.