Property Investment Guide
This is the first place to start when considering investing in property here in Thailand. Furthermore it will help you to understand why Foreign investors tend to invest in particular types of property. This is just an overview and more detail can be provided upon request.
• In Thailand Foreigners can purchase condominium units in their own name.
• The law in Thailand states that Foreign ownership of a condominium can only represent 49% of the aggregate saleable space in any condominium building.
• Foreigners are not permitted to own land in Thailand.
• Foreigners are able to set up a Thai company but cannot own more than 49% of the shares in that company.
• It is common for foreigners to establish Thai companies where they are the minority shareholder but still maintain control of the company.
• Foreigners can then use the Thai company to purchase within the Thai quota of condominium buildings.
• It is extremely common for Foreigners to establish Thai companies to own Land.
• Although use of a Thai company by a foreigner to own land or Thai quota condominium units technically subverts Thai Law. It is common practice and this nominee ownership goes unchallenged.
Buy To Let
People looking to rent here in Pattaya consider 3 main factors. As such these are the factors you must consider as an investor:
1. Location – the key factors being distance to the beach, distance to local amenities and baht bus (song tail) access
2. Facilities – the key factors being pool, security and conveniences (ie. shops, restaurants, etc)
3. Price – people always want a good price, the price you can charge is determined by local market conditions.
• Buying in the right location is the single most important decision as an investor.
• As the number of condos in Pattaya increases, the only developments that will see significant capital gain and stable rental yields will be those in good locations where competition is limited by the availability of land.
• Distance from the beach is usually reflected in a condos price. The further from the beach the cheaper the condo and vice versa. This is because there is a strong demand for ‘beachfront’ and ‘walking distance to the beach’ property. The limited availability of land close to the beach means that over time these properties will see the most significant increase in value.
• Distance to local amenities is not as important as proximity to the beach or main road access. Very often once a development has been completed this will lead to new amenities popping up all around the project. Many new developments will have shops on site to cater for demand. Having shops on site is very popular with rental customers.
• Main road access usually comes with baht bus (song tail) access. This is a very important factor for a large number of rental customers. Many people in Pattaya do not use cars or motorbikes and prefer to use the local baht bus (song tail) to travel in Pattaya.
• The ideal location from an investment point of view will be close to the beach, with good amenities nearby and located on a main road with baht bus access.
• Facilities are a major consideration for the potential rental customer. The reason many people choose to stay in a condo rather than a house is because of the convenience of having good facilities on site.
• A large portion of rental customers are seasonal visitors and tourists. They value facilities such as a good pool above all else.
• Security is also a major concern for most rental customers. Key card access, good doors and competent security are important.
• Fitness centers are now a major attraction for a large number of customers.
• Having access to shops on site is a great feature and very popular with rental customers. The convenience of services such as mini-marts, laundry and restaurants can help determine a customers decision.
• The price is an important consideration when deciding where to rent.
• However many customers do not mind to pay a little more for better rooms. High floors, corner units, good views, shaded units, these are all important considerations.
• Many of these features such as corner units can be bought at no extra cost to you as an investor but can help increase your occupancy and rental yield.
• Many investors believe that the cheapest units are always the best. However this belief is misguided. These units are usually in the most undesirable locations in the project. Therefore they are more difficult to rent out. This results in low occupancy levels and low return on investment.
• The price you are able to rent out your unit for will also be determined by the availability of other units in the area.
• Their may be a large number of other investors who have bought in the same building who are also looking to rent out their units. This will result in lower rental yields and quite often results in ‘price wars’.