Buyers can easily be bedazzled by the sheer range of property investment options that Thailand has to offer. As with any emerging property market, there are many opportunities presented to savvy investors.
However the uninitiated could find buying a confusing process. Mark Bowling, Senior Manager of Colliers International Thailand’s Pattaya office, created a comprehensive Buyers Guide to Condominium Projects that outlines what you should look out for and what questions you should ask.
Thinking of finding a home? Here's how to make the right move!
When considering a condominium you should try to decide what is most important to you as either an investor looking for capital appreciation or rental yields or as an end-user seeking a retirement or holiday home.
Low priced units may look the best value as an investment, but bear in mind a high-density development of similarly sized and furnished apartments may be more difficult to resell in if many units enter the resale market and supply could outstrip demand.
Get in early and act quickly. As soon as a project is released it’s best to move decisively whilst you can. Cherry-pick the unit(s) that best suit your requirements. The early bird catches the worm and delays in decision making can prove to be disappointing.
As a foreigner it is possible to buy a condominium unit under your own name providing the condominium you select comes under the 49 percent sellable square meters maximum allocation to foreign buyers. In the building that is popular with foreign buyers, it is advisable to insist upon foreign ownership whenever possible.
If buying a condominium solely for resale purposes you should try to buy in foreign ownership. Thai unit pricing is often lower for reason: it can only be sold to a Thai national or Thai company.
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Suitable room size
A good-sized one-bedroom unit between 40-50 sqm is likely to attract a longer-term tenant for a minimum lease period of 6-12 months, whereas a smaller 22 sqm studio is really only suitable for monthly short term holiday lettings.
Many agents may not consider listing a low income generating property for short periods due to low commission and time involved. Of course, if renting isn’t on your agenda, a small studio can be perfect holiday accommodation for your own use.
If your investment strategy is to achieve an attractive yield through renting your property, it is advised that you consider low/medium density projects in areas where there is not an oversupply.
Long-term corporate tenants may demand easy access to highways network, while retirees and long-stay tourists may prefer a sea view and to be close to a beach or local amenities.
When buying a condo always check what the maintenance fees of the building are. A general rule is that you get what you pay for.
Some developments may require a very low maintenance fee but expect that the property will be poorly maintained, badly managed and will look tired in a very short period of time.
That can be detrimental to finding tenants. Expect to pay between THB40-50 per sqm for an adequately maintained building.
Ensure that you check who is responsible for such things as land office transfer fee, specific business tax and withholding tax. Usually, the land office transfer fee is split 50/50 and the other remaining taxes are paid by the developer or landlord - but this isn’t always the case and you could be faced with unexpected fees if you don’t read the contract properly.
You should also ask what sinking fund is payable to the juristic management upon transfer of ownership. The sinking fund is a contingency fund held by the juristic office to pay for building upkeep and repair work not usually covered by maintenance fees.
This may include painting the building or roof repairs at a later date. In a new building, the sinking fund is very rarely used for the first few years, but in older buildings, the co-owners could be asked to top up the fund from time to time as necessary.
Use a lawyer
Use a lawyer to read through the sales and purchase agreement and handle the transfer in your absence. It’s surprising to hear that many buyers are told they don’t need a lawyer, particularly as they wouldn’t dream of purchasing a property in their home country without one, so why should Thailand be any different? A good lawyer will explain the contract to you and make sure you understand everything fully.
Use an agent
Always use a reputable real estate agent to ensure you receive the best possible advice on buying. Visit their offices to assess their ability to look after your investment whilst you’re not in Thailand.
Whether you wish to rent or resell your property it’s wise to ensure you will receive a professional after-sales service from someone you can trust. A professional agent will also make you aware of any developments or developers who are best to avoid and make safer recommendations of tried and tested developers for you to consider if necessary.
Agents will also provide the best possible information and resources as they want you to keep coming back each time you buy.
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