TIPS FOR REMOTE PHUKET CONDO INVESTMENT
The coronavirus pandemic in early 2020 brought significant changes in the work dynamics of professionals worldwide, and the Phuket real estate sector is no exception. As industries were forced to adapt to remain competitive, buyers around the world became comfortable purchasing properties without visiting the island.
The pandemic created an unexpected opportunity for buyers to acquire enticing deals from developers and motivated homeowners. With the market favoring buyers, people are happy to buy properties even from a distance greater than 2 meters. However, this also presents challenges to ensure that buyers cover all bases and make the right decision.
- Work with an Experienced Phuket Real Estate Agent. It’s essential to work with an experienced real estate agent who is also an advisor or consultant. A reputable agent will provide all the facts, including the pros and cons of every development, and answer any questions you may have about the island and laws concerning property ownership in Thailand.
- Have Open Discussions with Your Agent. Agents can speak with prospective clients for free through Skype, WhatsApp, and other platforms. Conversations with your agent help build trust, allowing you to better assess whether they have your best interests at heart.
- Do Your Own Research and Get to Know the Island. If you’re unfamiliar with Phuket, it pays to do some research on the best places to invest. Stick with areas already in high demand, which are usually mature areas popular with tourists. Choosing the wrong area of the island can make the difference between a long-term good investment and a poor one.
- Clearly Spell Out Your Condo Investment Criteria. Paint a clear picture of what you’re looking for, including your budget, the number of rooms, specific features you expect the unit to have, and any other criteria you have in mind. This makes it easier for your agent to narrow down the choices, helping you identify the most suitable property while avoiding unnecessary delays.
- Be Discerning and Get Everything to Make an Intelligent Decision. Question everything and make the agent work hard for their commission. No detail is too small, and there are no stupid questions. Make sure you have all the information you need to make an intelligent and well-informed decision. This includes comparing similar units, knowing about the area of the island, having faith in the quality of the finished product, and being comfortable with the developer and the terms of the Sales & Purchase Agreement.
- Utilize Videos for Remote Condo Investments. Thanks to technology, buyers can now view properties remotely through live video feeds or pre-recorded videos. These videos allow you to experience the property or showroom from afar, making it an essential part of the remote buying process.
- Understand the Buying Process. Before identifying potential investment properties, it’s important to understand the buying process, which involves finding a property that meets your criteria, negotiating a deal with the owner or developer, placing a deposit on the property, signing a reservation agreement, and signing a Sales & Purchase Agreement. Ensure you ask questions early on and work with an agent who can guide you through the process.
- Be Wary of Unrealistic Promises. Developers may promise high returns on condo investments, but be cautious of promises that seem too good to be true. 10% annual returns for 15 years are unlikely and unrealistic. Also, beware of “Buy Back Options” which may not be legally enforceable.
- Choose Foreign Freehold Condos. Choose foreign freehold condo ownership over leasehold. The freehold title to your condo unit is registered in your name at the local Land Department, and ownership is in perpetuity – it is yours forever. If you are looking for a solid, safe, and secure investment, then foreign freehold ownership is the only way to go.
- Ensure Your Condo Investment is 100% Legal. Check that the condominium you are investing in is 100% legal, with all necessary licenses to rent to tourists on a daily basis. Illegal rentals could jeopardize your investment, so ensure you invest in a legitimate property.
- Always Use an Experienced Lawyer. Working with an experienced lawyer can provide peace of mind and ensure that the Sales & Purchase Agreement fully protects you. They can also answer legal questions and ensure that promises made by developers are legally enforceable.
- Pay for Due Diligence. Consider doing due diligence on developments before investing. This may involve a look into the developer, the land title, the construction site, and Environmental Impact Assessment. The extra cost of due diligence is insignificant compared to the cost of problems arising later.
- Understand Your Free Stay. When investing in a condo, you will be offered a specific number of days per year to stay in your investment. Ensure you understand the terms of your Sales & Purchase Agreement or Rental Agreement to make the most of your investment.
- Request Updates Throughout Construction. Most developers will provide regular updates on the progress of construction through newsletters or personal videos. Keep in touch with your agent and stay updated on the progress of your investment.
- Leave Positive Reviews. If your agent has provided great service, show your appreciation by leaving positive reviews. A satisfied client’s praise is the most satisfying reward for a professional.
If you’re considering investing in Phuket real estate but can’t visit the island, follow these basic tips for a successful investment:
- Work with experienced agents
- Clearly define your investment criteria
- Gather all necessary information for informed decisions
- Understand the buying process
- Beware of unrealistic promises
- Choose foreign freehold ownership
- Confirm your condo has a hotel license
- Use an experienced lawyer for legal protection
- Conduct proper due diligence, even if it costs a little more.
