10 Reasons To Buy A Condo In Phuket
A lot of foreigners that are looking to invest in property in Phuket do not have enough expertise about the local area and who to speak with in regards to buying and owning real estate on the island. This leads to them being heavily reliant on real estate agents, advisors and lawyers.
Foreigners legally cannot owned Freehold ‘Landed’ property in Thailand. There are rare exceptions to this but generally this is the ruling. Interestingly enough, the opposite seems to be indicated in Thailand’s Land Code Promulgating Act.
The act goes on to read: “Aliens may acquire land by virtue of the provisions of a treaty…” – ‘Aliens’, of course, refers to Foreigners in this situation, but it’s worth noting that the last treaty that allowed the ownership of land to a Foreigner ended in 1970.
Spanning over a decade, Foreign investors in general were left in a sort of legal limbo area when it came to purchasing property in the Kingdom. The Thailand Condominium Act that was introduced in 1979 seemingly changed everything. In the new legislation, condominium’s were defined and made clear that Foreigners were now able to obtain Freehold ownership for a specially licensed residence of this kind.
Ever since 1979, the rights of non-Thai citizens have been changed and protected in regards to owning a condominium and are now able to legally own the Freehold deeds to a condominium property.
If you’re considering investing in a property in Phuket, we’ve made a list of 10 excellent reason why considering a Phuket Condominium is a great idea.
1. Phuket Is A Fantastic Place To Own A Holiday Home
With approximately 35 million visiting Thailand in 2018, we can truly refer to the Kingdom as the Land Of Smiles and the phrase ‘Amazing Thailand’ rings true. Of visitors, 15 million of them made a beeline to the island of Phuket for it’s sun, sea, sand and entertainment.
If you’re looking for a tropical destination with some of the worlds most amazing views and beaches, Phuket should certainly be on your radar. The island still retains a lot of it’s traditional Thai charm but with far great amenities and infrastructure than you would see further North of the country. This makes it an increasingly compelling place to holiday or re-locate too.
2. Phuket Condominiums Make For A Great Investment Property
If you’re only looking to visit Phuket once, twice, or even split your year up between here and home, owning a Phuket Condominium gives you a great opportunity to own a rental. The majority of condominium projects offer rental programs (or rental pools), ensuring that you have your condo unit managed varying months per year that you are not residing in Phuket.
Depending on the development in question, once you commit your condo into the rental market, you will still have the option of having 2 – 4 weeks per year that your Phuket condo is yours to use for a holiday. As a destination, Phuket will be as attractive to you as it is for millions of other potential tourists from around the globe, meaning that the rental market remains quite bouyant. You will find that some developers will offer a guaranteed return on your condo rental, some as high as 8% per annum. The kinds of rental yields offer make Phuket a fantastic place to invest in a condominium.
3. A Phuket Condominium Is A Secure Investment
There are two types of security for Foreign investors that purchase a condominium in Phuket.
Firstly there is the Condominium Act which makes your ownership rights protected. This means you my sell, occupy or deed the condo as you see fit. The other type of security is a more literal one. Condominium’s have on-site 24 hour security and CCTV cameras available.
With on-site security, you will have additional peace of mind that your newly owned property will not be susceptible to break-ins or burglary attempts. You want to ensure that when your property is left vacant and locked up, it stays that way.
For those that decide to use their new property as a rental, having on site security will certainly be something that a potential renters will like to see provided. A security guard will give a sense of personal security and safety for themselves and their property when they are on the premises.
4. The Potential For A Fantastic Sea View
While this is not relevant for all Phuket condominiums, if you purchase a condo on one of the many plots of sea facing lands in Phuket, you are set for a great view. Because there are various zoning laws that prevent developers building too close to the sea, these properties are in high demand and do sometimes come at a premium, but the view is worth it’s weight in gold for both an investor and a renter.
Of course, there are some that enjoy a view of the many mountainsides and jungles that surround Phuket’s skyline and with the right development, lush greenery and relaxing wildlife sounds are available from your balcony.
5. Have A Hassle Free Experience With Phuket Condo Ownership
Due to the amount of condominiums and ‘condotels’ that have already embraced the Phuket holiday rental market, the general standard of the fixtures and fittings that come supplied with the units are often comparable to what you would find in a 4 to 5 star hotel.
On top of the high quality standard furnishings, condominiums have the majority of amenities that a holiday maker would crave. These include large swimming pools, saunas, steam rooms, gyms and sometimes even a restaurant or cafe area. The Common Area Maintenance (CAM) fee that is paid by each of the individual unit owners fund these amenities and ensure that they are well maintained.
A Management Company, usually fronted by a voted Condominium Juristic Person, will handle the running of the building and this can include the rental of your unit itself. In addition to this, you can be secure in the knowledge that your condominium has safeguard measures in place that run around the clock.
All these added bonuses make ownership of a Phuket Condo hassle free and should help you to further appreciate the value that you benefit from by having a condo as an investment.
6. Phuket Has a Dynamic Property Market
Phuket’s real estate and property market is an extremely dynamic one and the interest from Foreigners looking to invest in the island has not abated for over 20 years now with the nationality of the major investors seeing a constant change.
There is always a steady stream of Brits and Europeans that purchase property in Phuket, a long with many nationals from Thailand’s ASEAN neighbours (e.g Malaysia and Singapore). In the more recent years they have been joined Chinese nationals and Eastern Europeans, due to the increase in costs of the property markets in their home counties.
The consistent demand for condominiums in Phuket has dictated a steady increase in property prices but the market appears to of been spared the “bubble territory” that is seen in other countries. The strict law that Foreigners are not able to be approved for mortgage lending affects this.
One of the main causes of the mid 2000’s housing crisis was down to speculative lending which played it’s part in the Global Financial Crisis. Thailand’s property market is a cash market when it comes to Foreigners so we are highly unlikely to see this kind of risk in Phuket’s bustling property market.
7. Succession is Protected With a Phuket Condo Purchase
A great advantage of owned a Freehold Condo in Phuket is the ability to be able to leave it to your heirs, keeping your investment in your family for years to come.
An easy way to do this is to ensure that when you do send the funds over to Thailand for the property purchase, in a Telegraphic Transfer, as well use the Foreign Exchange Transaction Form that will be completed by the bank of choice in Thailand, mentions your intended beneficiary names in full.
If this step is completed correctly, the names of your heirs can be added to the title deed and in the event that anything happens to you, their effective co-ownership status will negate any need to have a trust or will set up. Alternatively you may also list your heirs as beneficiaries noted in a Thai Will to ensure that the property is passed on to people of your choosing.
8. Your Funds Will Be Protected
Regardless of the amount of time that you have owned your condominium in Phuket, may repatriate the purchase price (or principle), the total rental income that you have earned, and in addition any capital gains that you have earned on the property.
From day one there is a process that you must follow involving your bank of choice. The Bank bank must confirm a receipt of the property related funs, which not only states the total amount received, but also that the monies received were sent over to the Thai Bank for the sole purchase of purchasing the condo.
When you make sure that the necessary Foreign Exchange Transaction forms (FETF) have been completed, taking the money that you have invested in the property back out of Thailand if you choose to sell the property.
9. A Phuket Condo Gives You Freehold Foreign Ownership
We’ve already touched on this earlier, but it is worth revisiting as we are near the end of our list, is the fact that you can fully own the Freehold title, in your name, for a Condominium purchase in Thailand.
The Condominium Act fully embraces Foreigner ownership for condos where as normally Foreigners are explicitly prevented from owning the title to any landed property in their own name. This act further protects the rights of a Foreigner which chooses to invest in Phuket’s condominium market.
Each of the many benefits we’ve listed above are significantly improved simply by the fact that your ownership of a Phuket condominium property is complete and in perpetuity.
We’ve listed 8 important tips for buying the perfect condo in Phuket here.
10. It’s Easier To Sell A Condo
Owning a condominium in Phuket and having the title deed in your name makes it far easier for you to sell than any other form of property in Phuket.
A Foreigner selling a villa or a bungalow will own their property usually via a leasehold or some form of corporate ownership structure. What you’re buying in these cases is in fact the remaining term of the lease agreement which may or may not be structured optimally for ownership of the property itself.
A condominium however is yours in title deed. So whether you choose to sell it to another Foreigner or a Thai National, they will own it outright without any red tape. With no shareholders to worry about or complex structures in place to navigate through there will be nothing legally ambiguous to worry about.
Owning a condo with full Freehold ownership will be as attractive to any potential buyer as it was to you when you first purchased your property.