Interested in international real estate investing? As Thailand gears up for the ASEAN integration, and continues to grow in size, population and number of businesses every year, the country is currently one of the most exciting markets in which you can invest. With more businesses starting-up or building international offices, more people are now able afford nicer and newer properties than ever before. There are also more international people coming over for work that want to live in international-standard accommodations. Lucky for these new home-seekers they are offered a vast array of suitable accommodations, and for those looking to invest, many are available for sale.
Whether it’s a house on the beach or a condo in Bangkok, investing in property in Thailand is certainly worthwhile, but it is a decision that should not be taken lightly. Investing in real estate is a huge commitment as it is a long-lasting and high-maintenance physical asset, not to mention that it is often the largest monetary investment people make in their lifetime.
If you’re looking to buy a property in Thailand, make sure you consider these five key tips, provided by Urbaan Real Estate, on making the best investment decision possible.
1) Have clear intentions on what you want out of your investment.
It’s important to foresee what the status of the property will be in in the next five, ten, twenty years. As Urbaan Real Estate reminds us, “Some properties provide good rental returns but have little potential for capital growth; for some the opposite is true. It is more difficult to find the ideal of high yield and high appreciation potential.” Decide what you are looking to gain from the property investment before you even begin your search, because you could fall in love with a property for personal reasons that can blur your judgement on what will actually be profitable.
2) Don’t settle for less than perfect.
Once you are sure what you want, don’t settle for anything less than what fits the bill exactly. Investing in real estate is not something to be hasty about. It may take a long time to find the property that’s perfect for what you want, but it is worth the search so you don’t end up with something that you are not completely happy with. It’s always easier to make a sale (or rental) when you believe in your product!
3) Assess your financial position.Remember that location is everything. The property you invest in should be located within easy walking distance of all amenities, such as public transportation, restaurants, laundry mats, etc. for greater occupancy rates. It’s also a good idea to look on streets that have a consistent streetscape, as streets with a mixture of conflicting building styles are generally less desirable.
Of course finances are a huge part of investing in a property, but there’s more to it than just knowing how much money you do or don’t have at the time of purchase. Figure out what your cash reserves are and what equity you have in your present home. Think about how it will factor into long term plans like retirement or saving for your children’s education. Always remember that life is subject to major change at any moment, so consider what would happen if your current situation were suddenly altered (perhaps with the birth of a child or the loss of one income).
4) Assess the viability of the investment.
Just because you have the monetary capabilities to invest does not mean that you will get a return. Before you choose a property to invest in, make sure you asses how sound the investment will be. You can do this by studying the capital growth history and what the potential rental income is for that property, similarly priced properties in the area, and compare the potential between different locations. Don’t forget to include real-life factors such as possible interest rate changes or having a potential vacancy period.
5) Obtain Professional Assistance: Legal and Financial
Professional assistance for foreign property investment includes gaining sound legal advice as well as help negotiating, and later you will need help with property management. As a foreigner, you will naturally be unaware of certain laws, loopholes and the overall way things are done here in Thailand.
Legal and financial assistance from local professionals will ensure that the contract is fully examined and approved, is fitting with Thai laws and that any changes are allowable. It is wise to seek advice from an investment adviser or qualified financial planner to help determine goals and strategies.
Negotiation is an important part of property investment anywhere in the world, but in Thailand, negotiation is ingrained in the culture. If you are a foreigner it will play very much to your favor to call in a professional who is local to the culture to help you. This will help ensure that you are not overpaying for the property you want. Negotiation also includes contractual elements which will allow items favorable to the purchaser such as access or installation of tenants.
Property Management Services will help relieve the need to deal with tenant issues while also giving you more time to focus on managing or building your portfolio. A property manager, especially one who can communicate in the local language will be more suited to negotiate on your behalf, obtain credit checks on potential tenants and will have more access to the right trades’ people. A property manager is especially helpful if you would rather not interact with your tenants.
