Invest in Property in Thailand
Thailand is a beautiful place. From idyllic beaches to the infamous Full-Moon parties on Koh Phangan, Thailand has a lot to offer tourists. It’s also a great place to live if you enjoy the digital nomad lifestyle. But, is Thailand a good investment opportunity for real estate investors?
The country is undergoing an intense period of urbanization and although it’s still classed as a developing nation, savvy real estate investors can take advantage of new apartment developments in Thailand. In Bangkok, apartment developments are springing up left, right and center. There is no shortage of potential investment opportunities if you want to snap up a luxury condo or a beautiful Thailand property in the center of the city. However, foreigners need to rein in their enthusiasm and take a number of important facts into consideration.
The Luxury Property Market
The property market in Thailand is surprisingly robust. It has successfully weathered the global economic recession and come out the other side relatively unscathed. In fact, real estate is a major growth sector in Thailand and investors can expect a healthy 8-9% return on investment per annum, which is considerably better than sticking money in a savings account.
Even luxury properties are bucking the trend in other real estate markets around the globe. Whereas in a city like London the luxury property market has all but stalled, in Bangkok, demand for high-end properties is growing, with many foreign investors happy to pay more than $300,000 for a condo in a desirable part of Phuket.
Major Infrastructure Investment in Bangkok
Bangkok is undergoing a period of major investment. The government is plowing money into transport infrastructure, in particular a new rail system. These are exciting times, so for an investor, there is huge potential for capital growth.
Real estate investment in Thailand is not all good news. For foreign investors, there is a lot to think about. For starters, construction standards are relatively poor compared to developed nations around the world. Most of the construction sector is populated with low-paid foreign workers who lack the tools and experience to do a good job. Many apartment blocks are roughly put together by hand by constructions companies more interested in short-term profits than long-term longevity. Developers are keen to save costs, at any cost, so a shiny new condo may not stand the test of time.
This won’t be a problem for a short-term investment, but factor in maintenance costs, as these will be an issue after a few years.
A Short-Term Investment
There are some restrictions on foreign property investors. Foreign investors can buy a condo freehold, which makes condos a good choice. Some developers offer early condos in a development at a discounted price, so it’s possible to snap up a property and sell it on for a profit once the development has been completed and demand is strong.
You could invest in Property in Thailand a condo and rent it out, but competition is high and you will be competing against thousands of other landlords.
Always take professional advice before you invest in Thai property. There isn’t much regulation, but it is still possible to have your fingers burned by unscrupulous developers.
