Many people may consider spending some years or even the rest of their lives in another country with better weather and cheaper prices. Especially elderly people often choose to go to south east asia to enjoy their retirement but also young opportunistic people and even families may consider leaving the cold home behind and start a new life in a more tropical and inviting atmosphere, at least partly.
Thailand is one of the most popular places to go to. Its liberal laws for foreigners, the beautiful climate and of course the breathtaking beaches are just a few reasons for people to move to the south east Asian country. Thailand has many different cultural places and a variety of different landscapes reaching from the north part with its milder climate in Chiang Mai to the hotter and more touristic places in the south. One of the most popular places is Phuket. The peninsula in the south west of the country is known for its excellent weather, its marvelous beaches and its luxurious hotels. It is certainly no wonder that many people seriously consider to stay in this paradisiacal place and settle down.
The property market of Phuket is definitely an interesting one for those looking to buy a home to live in or an investment property in Thailand. Also the architectural landscape is very modern. It is a good idea to hire an architect office which is directly located in Thailand instead of choosing an architect office in your home country. There are some particularities one must think of before realizing a project in Thailand. Working together with a local partner can entail a lot of advantages.
Purchasing real estate in Thailand requires a big amount of careful consideration. There are many subjects to inspect and many questions to be answered before buying property in Phuket. It is advisable to search for a partner who is capable of evaluating the market situation and recommend you to buy certain real estate, property or land in Thailand.
Furthermore there are several things to consider and mistakes to avoid while purchasing property in Phuket. Those will be covered in this article.
What speaks for an investment in real estate in Phuket?
There are many reasons that speak for an investment in real estate in Phuket. The first reason is that you have the right to 100% freehold. A non-Thai citizen can invest in a property in Thailand, but only a condominium can be legally owned freehold by a foreigner. You can invest in a house as long as you do it through a Thai partner. This protects you automatically from going through complicated processes in a foreign land.
Furthermore an investment into a house in Phuket can be also a wise move concerning the future as you can easily sell the condominium under foreign freehold to other Thais or foreign investors. As the government usually sells foreign freeholds at higher prices, you have good chances in profiting from selling a unit in the future. Many investors are eager to purchase real estate and the market is vivid, which makes a sell pretty easy.
Here we come to the next point. The market in Phuket is thriving. Reports show that both locals and foreigners are increasing their interest in owning a condo in Phuket. This points strongly to a continuous growth of the real estate market on the island. Prices are expected to rise in the coming years as Phuket becomes more and more popular to tourists.
Another point is that of course every investor has to consider the returns he makes on his property investment. Most of the developers in Phuket offer up to 7 % guaranteed return for the first three years. Hotel managed condos are even more attractive as you allow the hotel to manage your condo unit and benefit from guaranteed rental return.
The biggest argument is of course that Phuket is simply a paradisiacal place with many cultural attractions, beautiful weather and good food – simply the perfect place to spend the summer or even the rest of your life.
What are risks associated with the purchase of property in Phuket?
Probably the most beneficial way to buy is the significant discount off the purchase price offered to anyone buying early. In Phuket this is a rather common practice and often a development sells out before even the first brick is laid. This practice though contains some risks for foreign investors.
The biggest risk is of course that the development may never be completed which can happen due to a lack of funds or other reasons why the demand for units dries up. As many buyers are new to the island and lack longtime experience with the market, many of them still experience a huge disappointment of a bad investment despite popular horror stories.
Investors need to be aware that this is more common than they are led to believe, and it can lead to unexpected bankruptcies of development projects. Investors should make sure to have chosen developers of sound repute who are not exposing themselves to high risks.
Another point investors should be aware of is that any development has to be approved by the Environmental Impact Assessment (EIA) before the beginning of construction. But that does not stop developers from marketing units already. Changes in legislation or unforeseen problems on the land can lead to changes, delays or even full construction freeze.
One more risk worth noting when buying off-plan, is that the final product is not what the brochures and marketing material portray. Despite increasing protection of buyers by the legislation many developers still disregard the rules and make it hard for buyers to know what the final product will look like, and the quality they can expect. In such cases, there is almost nothing the investor can do even though the developer is clearly, legally in the wrong.
What are mistakes to avoid while purchasing property in Phuket?
There are several basic mistakes to avoid while buying property in Phuket. The most important ones are the following.
First of all it is extremely important to always make a title search on the property or land you want to purchase. This title search is a comprehensive examination and will lay out the history of the property. This is important as you want to be informed about any mortgages, leases, creditor right of ownership, or other charges against the property before even considering.
Secondly it certainly is possible to purchase property in Thailand without the assistance of a lawyer but you must not do it. Thailand is a country with a completely different language, culture and legal system and thai contracts can differ a lot from western contracts. It is extremely important to work with a local lawyer who knows the rules to play by to avoid misunderstandings and deliberate rip-offs. Make sure the law company you pick has a good reputation.
Furthermore you should not even look at a property without a local real estate agent. A good agent will make sure you get a fair price, can communicate with the owners and developers in their own language and may have knowledge about the geographical aspects of the area you are looking at.
All in all it is easy to understand what interesting and wonderful Phuket is for investors. Like with any investment in a foreign country it is extremely important to be careful and thoughtful rather than emotional and quick. If you take your time, do your research and work together with local people you have a great chance of finding your dream condo on the island.
An investment like this may be a good deal for further investments or it simply becomes the most beautiful private holiday place for the entire family. Elderly people may consider Phuket as the place to spend a relaxed and sunny retirement while eating good food and enjoying the incredible scenery of the island.
This article appeared in The Phuket News.