Apartments in Thailand: from guaranteed income to guaranteed buyout

States that are interested in the influx of foreign investment are introducing various mechanisms to stimulate the activity of investors from abroad. Everything is used: from a guaranteed income to a guaranteed buyout. Thailand, as one of the most popular tourist destinations in the world, is no exception. The local government and developers are doing everything possible to make foreigners want to buy apartments in Thailand. Besides historical sights and natural resources, investors are attracted by an adequate pricing policy, as well as various promotions. Today we will talk about apartments in Thailand as a profitable and liquid business.

Profitability and liquidity of real estate in Thailand

To begin with, let's look at what profitability, liquidity and guaranteed buyback are.

• Return on investment - an indicator of the effectiveness of investments associated with making a profit;
• Liquidity - the ability to quickly sell assets
• Guaranteed repurchase (buyback) is a developer's service, according to which the investor can return the apartment with the receipt of the invested funds and accrued interest.

Renting apartments in Thailand is a highly profitable business, as the relentless influx of tourists generates a significant demand for local accommodation. Developers claim that the return on real estate in Thailand is about 7-10% per annum. Let's look at this issue. The price per square meter of housing is within 1.5 thousand €. In large cities and resorts, this figure rises to 2 thousand € and above. Thus, the price of apartments in Thailand starts from about 33 thousand € in new buildings. We do not consider the "secondary" real estate market, since the cost of housing will have to be added to the repair and related costs, which are of an individual nature.

Monthly rent of apartments in Thailand in the suburbs starts from the amount of about €200, and in large cities - from €380. Thus, approximately 4.5 thousand euros or 171 thousand Thai baht come out per year. The taxation of this country is quite democratic. All profits that do not exceed 150 thousand baht are not subject to income tax. From 150 thousand to 300 thousand baht, the tax rate is 5%, and then only for that part of the amount that is higher than the first 150 thousand baht. So, considering taxes and related costs, the net rental income will be about 3,5-4 thousand €, which really allows you to recoup the investment in about 10 years.

Now consider the liquidity of real estate in Thailand. This indicator, in contrast to profitability, is more important for medium and short-term investments, when profit is expected within 3-5 years. High liquidity indicators are because of the possibility of real estate resale, as well as an exotic phrase for us as a guaranteed buyout. In Thailand, this service is developed at the highest level, which has practically no analogues in other countries of the world. Local developers are so interested in attracting foreign investment that they offer special programs with the possibility of returning investments in the shortest possible time. So, according to one of them, an income of up to 15% per annum is guaranteed for three years.

Another important incentive to buy an apartment in Thailand is the simplicity and transparency of such a transaction. Besides adequate legislation, the developers themselves have an extensive staff of qualified lawyers who accompany the implementation of the turnkey transaction, protecting investors from any "pitfalls".

Primary or secondary real estate market?

In many countries, it is more rational to purchase a completely new housing from the developer, since it is in good condition, does not need repairs, and can also be sold under special installment terms. In Thailand, not everything is so simple, since the absence of harsh climatic conditions, combined with the conscientiousness of management companies, contributes to the good preservation of local houses and apartments. And their prices are cheaper than in the primary real estate market in Thailand.

Another advantage of the "secondary" is a more helpful location, because the older the object, the better piece of land it can occupy. New buildings mainly appear where there is free territory. Thus, it is extremely difficult to unambiguously answer the question of which is better, “secondary” or “primary” housing in Thailand. It all depends on the situation and the specific preferences of the buyer.

What areas of Thailand are suitable for buying property?

Having found out the level of profitability and liquidity of Thai real estate, let's move on to considering the most suitable areas for this transaction. Phuket and Pattaya are traditionally considered the most popular destinations. It is difficult to choose the best option between these major resorts in the country. Where one excels in natural wealth, the other wins in an abundance of attractions and tourist routes. Thailand is different, so everyone will find a haven in it to their liking.

You can buy an apartment in Phuket for about 65-80 thousand €. The villa will cost more - from 200 thousand € and more. This region is predicted to be the leader in terms of development and the number of new buildings.

Pattaya provides more budget housing, although it is not without luxury real estate. For example, you can buy an apartment in Pattaya almost two times cheaper than in Phuket - from 35 thousand €. If we talk about apartments in the elite part of the city, then their price can exceed 350 thousand €.

Some of the cheapest prices for Thai real estate in Krabi Province. Here you can find housing from 20 thousand €, surrounded by natural beauties and near to the seacoast.

You can talk about apartments in Thailand for a long time. The most important information can be contained in a few key phrases: good profitability and high liquidity. Investors are especially captivated by the guaranteed buyback service, which allows you to earn quickly and safely. Local developers are doing everything possible to make citizens of other countries want to buy apartments in Thailand. Since the government supports them in this, we should expect further development of the local real estate market and continued interest from foreign investors, including from Ukraine and Russia.