As far as tropical islands are concerned, Phuket, Thailand, takes a lot of beating. It is renowned for its stunning beaches, amazing scenery, wonderful culture and incredible nightlife. For anyone wishing to laze in the sun, destress, sample some amazing Thai cuisine . . . or even go crazy with the nightlife, Phuket has it all.
Every year millions of tourists’ flock to Phuket for all the reasons mentioned above. But the island is not just all about beaches, food and nightlife. There are countless activities to help fill each day with something different. Visitors can go island hopping, visit one of the many scenic tourist attractions, play golf, tennis, go diving, surfing, snorkelling or participate in one of the many fun water sports on the beaches.
Many regular visitors to Phuket, from all corners of the world, have felt the dynamism of this spectacular island when they have visited. Which is why many experienced investors have seen the potential of the island and have decided to take advantage of its rapid growth towards modernisation and its ever-expanding tourism industry.
The reasons for this may be multifold. Home seekers and investors have decided to put their hard-earned money into this unique island, not only because they view Phuket as a viable investment opportunity, but also because Phuket will be their chosen retirement destination, so whatever they choose to buy may one day be the perfect home in old age. You can get a good feel for some pf the luxury properties available in Phuket: here.
For those that seek a solid investment, many are looking to find somewhat of a hybrid property. That means not just an excellent investment that may generate a sound return, but also a holiday home for yearly visits, which then later becomes their retirement home.
The island has also seen a dramatic increase in the arrival of professionals and high net worth individuals, who have discovered through the lockdowns in Europe, North America, Australasia and neighbouring Asian countries, that they can work just as efficiently without traveling to the office every day. The Thai authorities have, in fact, seen this opportunity and are actively promoting to wealthy business people certain benefits if they choose Thailand as their new place of work.
Not surprisingly, it is Phuket’s luxury villa market that has remined the most buoyant in the last 12 months through the coronavirus pandemic. One of Phuket’s real estate experts, Thai Residential, estimates that over 70% of sales during the pandemic have been on high end west coast luxury sea view villas, with many potential buyers bidding for prime properties over this time frame.
What Should Buyer’s Watch Out For When Buying Investment Real Estate in Phuket?
There are many factors to consider when choosing the right property. If the reason that you are reading this article is mainly because you are looking to buy Phuket property at any time now or in the future, then here are some suggestions to help to make the experience as pleasurable as possible.
Some of the below are more important than others, but you should heed the advice on all of them:
Get Expert Advice – Choose The Right Real Estate Agency
Firstly, and probably most importantly, it is imperative that you take the time to find out which agency has your best interests at heart.
It is always worth using a quality real estate agency as they are able to provide expert guidance. The established agencies are able to help you narrow down your selection, by factoring in things such as your budget, your preferences for area and other important aspects as well as providing all the necessary information about all the different projects on the island, new or old.
You can think of choosing the right real estate agency as one of the most important parts of the process, because there is a huge difference between those inexperienced outfits who simply think only of commissions and those whose only goal is to provide a second to none service for all their clients.
It is always wise to spend the necessary steps to ensure you have the best possible mentor, as buying real estate in Thailand is not the same as anywhere else in the world. The way that your chosen agency does business can determine whether your experience is an enjoyable one, or one which you wished you’d stayed away from.
The best agencies will only recommend projects and properties that have passed their own internal due diligence procedures. Unfortunately, Thailand has an unregulated real estate market, which means that both developers and agents get away with things that they would not be able to in other jurisdictions. Having a professional an honest agent to guide you through this is absolutely paramount on a tropical island like Phuket.
If at any time, you feel that you are being subjected to high pressure sales tactics, then walk away. Buying a property is one of the biggest decisions you have to make throughout life, so you could really do without someone pushing you for a quick decision. Rushing decisions always brings with it unnecessary stress and that can very often force you to make the wrong decisions.
Please consider that as soon as you have placed a deposit on a property, the agent will likely be paid some or even all of the commission due to them. So do not feel as if you are pressured to place a deposit down on the property without first speaking to a lawyer.
It should go without saying that if you feel any pressure or unprofessionalism from an agent, then you should immediately find a new one to replace them.
Always Invest in Quality Legal Representation
Coming a very close second to getting the best legal advice when investing in property in Thailand is making sure that you also get the best attorney too.
Once you have found your perfect investment property, then you need expert legal advice to make sure you are 100% protected. It is also important to understand the laws in Thailand as there are some types of property that might carry risks and there are also certain pitfalls that you must be aware of. A good lawyer will be able to explain what you can and can’t legally own in your name.
Many of the current buyers through the Covid pandemic are Thai nationals or foreigners married to Thais, but foreigners need to be aware of the risks associated with villa ownership, predominantly that they cannot own land in their name in Thailand. To overcome this, many lawyers will recommend that you set up a Thai Company which can then own the land. However, this must be done correctly, but it is common for many inexperienced lawyers to take shortcuts without fully protecting their clients.
The Thai courts have expressed their opinions and views on this many times with rulings that violate land ownership laws in Thailand. Setting up a non-trading Thai Company simply as a property holding vehicle is against the law, so buyers must make sure they adhere to all the corporate laws of Thailand if they are looking to purchase a landed property, such as a villa.
Buyers must also be aware that the maximum lease period when buying land in Thailand is 30 years and it is technically illegal to contractually agree to lease extensions before those initial 30 years have expired.
Make Sure You Choose the Right Budget and Stick To It
One of the mistakes that many buyers make is to waste an awful lot of time looking at properties not within their budget. Of course, we are living in strange times and buyers may find that owners and even developers are willing to negotiate and are more open to bargaining. But buyers should limit the properties they are looking at to within no more than 20% above what they actually have to spend. This saves everybody a great deal of time.
It is also wise to take into consideration both legal costs and also government fees and taxes. Normally you can add total maximum of 4% on top of the actual sales price as a worst case scenario, although because the taxes are dependent on a number of variables, a lot of the time taxes may be lower.
You also want to make sure whether your new property will be furnished. If not, then you’ll also need to factor in these costs too. There’s a pretty broad range of these costs, as this depends on the size of your property and whether you choose to be frugal or go for all out luxury. Prices vary considerably for everything. For example, a full furniture kitting out can be as low as 400,000 THB or as high as a few Million THB. It makes sense to decide on this when you are calculating your initial budget. If you are buying a 5-bedroom super luxury villa, then this will likely cost many millions of THB to get it just right.
Choose Furnishing Based on Your Strategy – Don’t Overspend if Predominantly it’s a Rental Villa
This is important because people are often unaware how quickly the condition of a luxury rental property can deteriorate if it is fully booked throughout the high season.
If a property is purchase primarily as a rental investment, then this must be factored in. Choosing furniture and appliances that will last is the far more sensible option. Spending time on this can have a dramatic difference on long term rental yield.
Make Sure You Do Your Proper Research – Choose the West Coast
Before taking any decisions, you should always do the necessary research on investment property in Phuket. Obviously, if you have an excellent real estate agency to guide you, then this makes things all the much easier. But it is still good to have a thorough understanding of the property market so that you can make informed and educated decisions.
Generally speaking, in terms of rental potential and capital appreciation, the west coast comes out on top every time.
Conclusion
Buying a luxury sea view villa on this stunning island is a dream come true for many people around the world. But it is essential that you make sure it stays a dream and not a nightmare, so doing things the right way is essential.
Taking your time to and following the tips outlined above will make sure that your investment experience is both enjoyable and lucrative.
More importantly, it is wise to do your own research and be aware that not all real estate agents, lawyers or even developers are totally forthcoming with the truth. It pays to do your own homework.
