Why Invest Off-plan Properties in Thailand? (1)


A two-part Series on Investment Properties 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.

Investment properties can be either condominiums or land & house, with some basic principles applying in each case when buying off-plan, but for ease of reference and clarity, we shall deal with condominiums within this section. If you are looking specifically for land & house please feel free to contact us and we’ll be happy to provide an overview of new developments and those with significant investment or rental potential.

Off-plan investments in Thailand Overview

Off-plan investments in Thailand can offer investors the ability to buy at the lowest price possible and achieve maximum return on investment.

Keeping your property for a number of years will allow you to benefit from excellent rental income opportunities. Meanwhile you can enjoy a beautiful holiday home and watch your property appreciate in value.

Buying a condo allows foreigners to buy freely, without the need to establish a limited liability company, provided the foreigner to Thai ownership ratio on your chosen development does not exceed 49%. However, if you choose to buy in a Thai Company 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 Thai government has introduced and is enforcing building standards and regulations to ensure the quality in Thailand is high and that it is also constructed in harmony with the environment. 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.

Quality new investment opportunities in Thailand are always 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.

Buying off-plan in Thailand allows investors to purchase property in areas that will attract major rental demand and price appreciations at the lowest possible prices and with the best possible finance options. Those who purchase in quality developments early will see the greatest returns on their investment.

Buying off plan enables you to pick & choose your own unit

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 cap 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 as the buyers 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 our due diligence and having a conservative risk strategy, those risks can be mitigated.

In addition to the lower purchase price, the investor also benefits from finance structures too and can spread the payment across the term of construction. The investor usually only needs to pay around 25% of the value of the purchase in the form of a deposit, the rest is payable over the construction period at 0% interest.

Last modified onMonday, 04 March 2013 03:16
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