8 Tips To Help You Buy A Condo In Phuket

It’s never easy to find the perfect condo, especially when it’s going to be a holiday home or investment property. It becomes even more of a challenge if you have to travel abroad in search of that special condo to invest in.

Like most things in life, it’s best to have a solid plan and this certainly applies to finding the right Condo in Thailand. We’ve put together 8 tips that can help things go much more smoothly and remove the stress from the search.

1: Know Your Phuket Property Budget

It’s important to stick to your budget and also factor in as many outcomes as possible when it comes to buy a condo in Phuket. There’s a number of costs when it comes to purchasing property here and one of the most significant is the cost of upgrading a condo to be registered as a Freehold Unit. This is often not included in the retail price. While it is a hidden cost, it’s not an uncommon practice as generally the advertised price of the condo will be aimed towards a Thai National or a Foreign Leasehold. Remember to ask if the price advertised is the Freehold Price or not.

Buyers also sometimes neglect the issue of a possible sinking fund or transfer fee when it comes to owning a condo. They will also need the help and advice of a qualified Lawyer to make sure their purchase has a safeguard in place. Unfortunately for the Buyer, Lawyers don’t come free… or cheap!

In comparison to the total cost of buy a condo unit, these individual costs don’t seem too high, but once combined you may see yourself being out of your financial depth and unable to close on the deal. These additional costs can run up to as much as 10% of your condo’s purchase price.

Running costs are something that should also be factored in, even more so if you’re planning to use your new property as a holiday home instead of a rental. If the condo is vacant for months on end, there will still be small running costs such as Utilities, Common Area Maintenance, Security and so on. It will almost always need a good clean and airing when you do visit.

Each of these things should be considered when you sit down and do your final budget for your condo purchase.

2: Find The Right Area In Phuket To Purchase A Condo

Phuket is a beautifully diverse area and has something to offer all ages. Because of this, the various parts of the island will appeal to different kinds of property investors. For those that love to be near wildlife and nature, somewhere like Phuket Town or Patong will not be as appealing where is the north end of the island has national parks and wildlife sanctuaries.

If you want the hustle and bustle of the City life, Phuket Town or Patong will more than likely be the first places you look, with Patong being the epicentre of entertainment nightlife on the island. If you’re looking for a party atmosphere, it’s there for you to enjoy.

For those that simply must be a stones through away from the beach and long for sand and sea, the West Coast will have a lot to offer you. It does however stand to reason that anything that comes with a sea view will be generally more expensive but there’s also plenty of reasonably priced condos available within a 5 – 10 minute drive of some of the most stunning beaches that Phuket has to offer.

Do some research on the types of interests you have and what’s available to you on Phuket. Don’t be afraid to ask advice from friends, locals or your lawyer. This may open the door to a development that you didn’t know about. Once you feel like you’ve found an area and development, take a visit during different times of the day. See what the traffic and parking is like, if it’s too noisy or too quiet for you and so on.

Finding the right kind of atmosphere and ambience to suit you is important and something that should be found before making your final decision.

3: Find An Experienced Property Lawyer In Phuket

While in most countries, hiring a lawyer for property purchase is not something you 100% have to do, but in Thailand they are essential, especially if you’re a foreigner. A surprising number of people that come to Phuket to buy properties, especially condos, fail to consult a Lawyer. This really should be the #1 thing to do on your check list.

A good lawyer will always let you know what is common practise when buying a condo in Phuket and also explain things in detail. An agent or developer may be tempted to take advantage of a customers naivety when it comes to the local Phuket Property Market, so having a good lawyer is a must.

A lawyer’s role often extends beyond approving the wording of a Sale and Purchase agreement. The right lawyer will go above and beyond to protect their clients interests. For example a good lawyer will make sure that any reservation or deposit you put down is refundable under certain circumstances and also that any refunds will stand up in a court of law if need be. A good lawyer will have more knowledge about local developers and how reliable they are, performing due diligence on your behalf in regards to the necessary licenses that are required to build a project.

We’d say that the most vital action that your lawyer can perform for you when, you’re buying a property in Phuket, is the title search. With the right amount of investigation the lawyer will be able to ensure that the title is “clean” and indeed held by the correct owner of the land, and that said land has then necessary road access needed.

The most important part of the title search is that you will find out the full ownership history of the land and it will confirm that the land in question is not “dirty land” – this refers to government owned land that may have been sold in the past illegally.

Purchasing a condo from a development that was built on dirty land will mean that you are not protected by any statue of limitations. At any time the government can determine that all residents must vacate their properties with the now illegal buildings on the land to be demolished.

It would be foolhardy to purchase real estate in Phuket without the help of a competent lawyer when these are the kind of services and protections that a good lawyer can provide you with

4: Find A Reputable Phuket Property Advisor

There is no regulated real estate industry in Thailand mean that there a no real estate advisor or property agents licensed by either the Phuket authorities or National authorities.

Due to this lack of regulations you’ll often find that agents will tell their clients anything that they want to hear as long as it leads to a sale, with little to no recourse to either them or their company. This is again a time to perform due diligence when it comes to picking a Phuket Property Advisor of choice.

You’ll find that good estate agents are not tied down to any individual developers and that they in turn work with what they’ve researched enough to consider the best available options. They’ll explain things clearly to you when it comes to tricky subjects like Foreign Ownership Laws. You will know you have find a good estate agent when they insist that you confirm anything they speak with you about, in regards to purchasing a condo in Phuket, with a local lawyer.

We consider the best real estate advisors are often the ones that go the extra mile and explains any uncomfortable truths about a certain project, developer or just a Thai Property Law in general. They will educate you and help you to understand the right, legal way to purchase your dream Phuket Condo or property.

5: Do Your Homework About Phuket Property

It’s a no-brainer to do your homework and it’s also a surprise about the number of people who go searching for Phuket properties, find one they like and just put a deposit down without doing any other research. It’s not just doing their due diligence – your lawyer should be instrumental in this process already – but there’s a myriad of different things which could potentially go wrong with the project or the property itself.

If you’re buying from a new building project you will be somewhat able to have an influence in the finished product and also have some kind of recourse if you find that the building has not been built to the correct specifications. Buying any pre-built properties mean that you inherit every current issue with the property in question.

This could be major problems with the plumbing system or that the air conditioning units are old and in need of a refurb or replacement. The electrical wiring could be wrong and in need of a professionals touch. Before laying down any sort of deposit, you should have your property inspected properly to ensure that there are no systemic or structural problems.

6: Understand The Phuket Property Market

There’s no “universal real estate market” and the market in Phuket is certainly different to markets across the globe. We’d go as far to advise that it’s even different from the property market in Bangkok. When it comes to property, there is no “universal real estate market.” The real estate market in Phuket is different to markets in the rest of the world; in fact, it is even different to the market in Bangkok.

The thing that really distinguishes Phuket’s real estate market from others is the sheer amount of new developments available which are driven towards Foreign buyers with the fact that Foreign buyers are also unable to get a local mortgage.

Because a large portion of the Foreigners looking to buy property in Phuket will not be able to finance the purchase from their home country, virtually all property sales with Foreigners are cash. Because of this, interest rate fluctuations in Thailand will be unlikely to be impacted by foreign demand for property. More importantly though, a global credit crisis also have a much lower chance to impact these developments.

With cash being used for a majority of foreign purchases, there is not so much of a need for Developers to be reliant on bank loans for construction funding. Because of this, they also don’t need to be concerned with being declined for a bank loan which was something that was common in 2008 – 2009.

Any such crisis could heavily weigh on the psychology of buyers who will in turn be more cautious about putting down deposits without seeing some sort of finished, or at least close to completion, project. Projects that are currently invested in are highly unlikely to go unfinished or bust because they would of already been “pre-funded”.

A major crisis could weigh on the psychology of buyers, who may want to hold onto their cash until they see which way the wind is blowing, but any project in which they have already invested is highly unlikely to go bust or remain unfinished because it has been “pre-funded.”

7: Learning The Basics Of Thai Law Will Help You

Understanding the basics of Thai Law actually goes above and beyond any advice that you will receive from your lawyer. It will also give you a good reading of the confidence you have in your lawyer of choice as you will be able to easily identify certain aspects and issues of property purchase.

The first and foremost thing that you must resign yourself to is that as a Foreign national, you are not legally able to own landed property in your own name in Thailand. You will be unable to own the Freehold title of a Phuket Villa, House or Townhouse in your own name. For this important reason alone the market for Freehold Condominiums is an attractive prospect for most and keeps the market bouyant.

If your lawyer or agent of choice goes on to explain this to you in further detail, it’s a good sign that you’ve found the right people to deal with and that will help you purchase your property. On the other hand, if their opening gambit is a list of ways that help you “get around the law” to purchase a Villa, House or Leasehold Condo, that should be your first ‘red flag’ and your cue to perhaps start looking for other representation.

While the land ownership laws in Thailand certainly do not favour Foreign investors, the condominium ownership laws are more in your favour. There are built in legal protections in both the Thailand Condominium Act and the Civil Commercial Code (CCC) that govern everything from your right to own the deed, the general purchase agreements and even the marketing literature that can be used to sell the condo.

It’s certainly frustrating that you can’t just arrive in Thailand and buy any dream property that you like but when you’re looking for a Condo in Phuket or Thailand in general, if things are done properly, the condominium ownership laws will work in your favour.

8: Recognize the Potential

It’s not easy to immediately see the potential in a new property or building project. For example, if you’re buying a property off plan then the construction site of your condo project may still be in it’s infancy and be scrubland when the contract is signed.

This will make it harder to visualize the finalised project but you have to keep in mind the potential views from the finished build. Everything above the ground floor may enjoy spectacular sea views for example. It’s always good to look for an Artists impression or a Concept Design to give you a rough idea but there is one thing that most condominiums in Phuket’s coastal line share, the view is amazing!

Furthermore, new access roads built for the purpose of the project will make the development itself much more attractive and may lead to higher purchase / resell prices. If the development is in a remote area and has the adjoining plots of land free and open for development, it’s almost a certainty that some great new amenities such as restaurants, cafe’s and shops should be arriving on your doorstep.

When it comes to existing developments, the potential you should be looking at may very well be the property itself. While it’s hard to see that in an empty unit that hasn’t been renovated in some years, look past the dust and dirt and see how you can transform it.

You don’t have to be an interior designer to know that with a bit of cleaning, some new furniture and appliances, a drab unit can turn into a happy home in no time and add some amazing value to the property itself.