Issue 2 Feature brought to you by Tropical Properties
Editor of Thailand Property Magazine interviewed Luc Montens, real estate guru in Phuket and owner of Tropical Properties, one of the most established local agencies in Thailand. His success as an expatriate business owner, as well as 11-plus years of experience in the industry, guiding clients from around the globe through the property buying and selling process are precisely why we’ve requested his input on the best practices in investing, specifically on Thailand’s largest island.
Luc, can you tell us how you got started as a business owner and property guru in Thailand?
I have one of those typical expatriate stories where I came to Thailand on holiday and loved it so much that I relocated. I am originally from Belgium, but I moved to Phuket in 2001 with my wife who I run the business with. Back then, the island was a different place; barely even catering to tourism. I had a restaurant for a couple of years, but when I realized there was a real need for a professionally run and managed property agency, it seemed to be the perfect time to get in with the rather new (at the time) but booming real estate market.
Since Tropical Properties launched, we’ve seen all sorts of clients pass through. Everyone from the people with a limited budget to the so called ‘high-end’ buyers have needed help investing here. The demand has encouraged us to go as wide as possible with our listed properties, and today we have something to offer to everybody and are able to speak about how the state of the market affects each demographic.
What’s the first thing a foreigner should be aware of when purchasing real estate?
A foreigner should be aware that there is a lot they don’t know, and can’t learn without the help of a professional. Without the help of a reputable agent and a trustworthy lawyer, people who try to go through the process alone often find themselves in some sort of trouble along the way. For example, it could be too late before someone finds out that their land title was not written to have a structure built on it, or they can’t get a building permit. Trying to understand how a foreign registered lease works, or how to protect their interests can be a challenge.
Using the service of an agent does not cost anything; they get their commission from the sellers. It’s better to spend some money on a good lawyer than take the chance of wasting much more due to misinterpreting information.
What are your top tips for someone looking to sell a house or condo?
My best advice is to put it in the market at a realistic price if you are serious about selling. This is extremely important in the current market. There is a lot of competition these days. There are a lot of re-sale properties and new developments adding to the market nearly every week.
What’s the biggest mistake you see your clients making before they finally ask for help?
Again, not getting the good advice from reliable sources. Many expatriates claim to know the market in Thailand simply because they have lived here for a number of years. But unless that person is involved with the industry every day, aware of the ins and outs, and constantly up-to-date with changes to laws and regulations, you should not consider their advice to be completely usable.
Do you have any advice on certain towns, neighbourhoods or even property types in Phuket that first-time investors should look into?
That would depend on what the investor is looking for and their budget, so normally I like to sit down with my clients and learn about their goals before making suggestions. But for some beginner advice; someone looking to maximize rental income should take an extra look at properties along the west coast where the white sandy beaches attract holidaymakers. For someone who can’t spend too much on a property, a resort-style condo in Patong can offer good returns.
What are some tips on getting a solid ROI from a property purchase and sale?
Location, location, location. Buying in the right area is the number one thing you can do. In Phuket, the beaches along the island’s west coast are where the tourists want to be and are in high-demand all year round. If beaches don’t appeal, making sure facilities are on the premises or nearby will also serve an investor very well. That being said, having a swimming pool, gym, parking, lobby, reception area and on-site management are all bonuses but not always a necessity. It truly does depend on the individual property which, of course, is where I come in.