For a generation, Thailand has been subject to a boom in residential property development unequalled anywhere in Southeast Asia. The demand for residential properties has been fed by tourism and the influx of international business and commerce into the kingdom. There has also been an increase in the vision of Thailand being a perfect location for retirees.
Since the implementation of the 1979 Condominium Act, which allows a foreign investor to own a condo outright in their own name, the expansion in the market has been relentless. From 1979, workers, tourists and retirees have flocked to the popular city and resort areas. This has created a necessity for the expansion of the supporting infrastructure. Thus, services, retail and leisure facilities have also had to expand at a comparable rate.
The increase in the peripheral industries has led to more working opportunities for the indigenous population. As a result, the level of migratory workers is now at the highest ever levels. All of these people, nationals and foreigners, require accommodation which has led to a real estate industry which has also expanded beyond recognition.
A large number of the new residential properties are aimed at the buy to let market. Condominium buildings with good management services have made buying to let an attractive and profitable proposition. Many foreign investors now view Thailand as the best Southeast Asian option for financial returns from investment in the property market.
At any one time there are thousands of people looking for a property in the country. Some of these prospective buyers are searching from within the country, some are searching from abroad. So, what options are there to aid property investors in their search for their ideal purchase?
Property Searching from Outside the Kingdom
You may find yourself at a point in your professional life where you are offered the opportunity to work in Thailand. You might have enjoyed memorably holidays in the land of smiles and decide that it would be the perfect place to own a rental property. Retirement might be beckoning and you wish to realize the dream of living out your years in a tropical paradise.
Whatever your reasons, most likely, the first thing you will do is go on the internet. Immediately you will see that there are thousands of sites promoting properties for sale right across the country. So, you need to narrow your search, initially by area. You need to ask yourself questions. Firstly, you need to identify your needs, wants and desires. These choices will of course be driven by your reasons for wanting, or needing a property.
If you are going to live in Thailand for the purpose of work, your choices may not be entirely your own. Geographically, you may be tied to a specific place of work. If you are seeking a property as a rental investment, you are more likely to be driven by simple economics. You will look for locations that will maximize the returns on your investment. Retiring opens up a far greater level of choice. If you have decided to retire in Thailand, you will probably have had holidays in the kingdom, and so, have ideas as to your preferable locations.
Then think about the type of property you desire, remembering that, realistically, to own a property outright in your own name you will be looking at condominiums. How big and how many rooms do you require? What management and support facilities do you need, and what level of local supporting infrastructure will you be looking for?
Once you have managed to narrow down your geographical and practical needs, you then need to set your financial parameters. The simple question is, how much can you afford to invest? It is essential that you fix your maximum level of spend, and stick to it. Don’t allow yourself, or others, to tempt you to go above the level of what you know to be your upper spending limit.
Having decided upon your geographical choices, your living needs and your financial parameters, your search will be more specific and efficient. Search for sites with properties in your preferred area, then, most of the sites you see will allow you to narrow your search by price, size and type of property. At this point the properties you view will have a realistic relevance to you and your future.
As you view each site, ask yourself whether or not the site looks professional. Many sites certainly do not have a professional appearance. Descriptions are vague, pictures are poor and information is very often out of date. It would be wise to treat these sites with a degree of caution and tread carefully.
On finding a property that interests you, the internet can aid you further. Maps and satellite imagery can give you a far better impression of a property than a simple description and a few photographs. A property description may say “Close to the beach”. Well, “Close” is a relative term, check with maps or satellite photos, just to be sure. They will also allow you to look at the local of the site, its surroundings, transport links and supporting facilities.
Although there is another note of caution. Property descriptions and photographs can be deceptive. Photos particularly, are likely to be old ones, or even enhanced. In the case of a new development, artists, or computer-generated impressions are common. If you have been to the country, you may have contacts there, they might be able to help in gaining more up to date or accurate information.
Another search that can be of advantage is to search for the names of reputable development companies. Look for organizations that have national and international accreditation with experience of undertaking quality projects. Following companies of this ilk can offer a high level of peace of mind. Look at their completed developments and Judge for yourself if they are building the type and quality of property that you desire. Then search for any of their current development projects that match your search criteria.
From outside the country, your first contact with a seller or agent will probably be via email. In your mail ask direct pertinent questions. If the answers you get are vague or evasive, reiterate your desire for definitive and exact information. If the information you get stills seems grey or ambiguous, steer clear and move on, there are thousands of properties for sale and plenty of choice.
However prudent and conscientious you are with your internet searches, sooner or later you will need to travel to the country and view properties for yourself. This is a holiday that could be one of the most fulfilling trips of your life, or one of the most frustrating and down heartening. It is therefore important that your earlier groundwork was scrupulous and detailed. Your final property list should only contain those properties where you have been able to easily gain all the relevant information in detail, and which match your criteria.
Searching for a Property from Within the Country
If you are staying in the country, or already living here, you will probably utilize the internet in the same way as if you were abroad, thus, all of the above will apply to you in the same way. You will of course have the advantage of being able to visit any prospective purchase almost immediately, and with little or no cost.
You will also be able to visit agents personally and gain accurate information much more quickly. In addition to this, you have several more advantages. Word of mouth shouldn’t be underestimated. Put the word about that you are looking for a property, you may be surprised at how much feedback you get.
As you travel around look at properties, it is common to see a sign hung outside advertising a property for sale with a contact telephone number. Take a look at development sites, there is sure to be an advertising billboard giving details of how to enquire about the units being built. If a particular development catches your eye, make a note of the name and go back to the internet, all major developers will have a site giving details of their current projects.
Using a Real Estate Agent
In many western countries it is the norm to go straight to an agent when you start looking for a property. In Thailand, its not necessarily the norm, but it is an option. In your home country you may have dealt with real estate agents and have some preconceived ideas as to what to expect from a service. However, when you first contact an agent in Thailand, it would be wise to have an open mind as to what to expect.
Firstly, it is important to bear in mind that the real estate industry in Thailand is not regulated in any way. There are no set industry or ethical standards laid down. There is no government approved levels of training and no licensing of agents. Literally anyone can be an agent, many of them are nothing more than opportunists. Being unregulated, there are many tricks that real estate agents will use, so be astute and be wise.
Real estate agents in Thailand earn a commission from sales. Typically, this is 3% of the agreed sale price, this is payable by the seller. So as a buyer, you may feel that you are safe from any sly tricks, simply because you are not the person paying the commission. Sadly, this is not the case.
When a property is put up for sale very often an agent will be invited to list it as part of their sales portfolio and advertise it accordingly. Due to the lack of training, there will be no skilled valuer to provide the vendor with a pricing guide of the property’s value. Rather, they will simply ask the seller how much they want for the property. Knowing what the seller is willing to accept, and the price the agent will promote, may be very different.
A common practice amongst agents is ‘Price loading’, this is to quote a prospective buyer a price above that which the seller is asking. Should they be successful in negotiating the sale, they get their commission plus the additional cost they have loaded onto the asking price. The party that is being exploited is the buyer, typical levels of loading are between 200,000 and 300,000 Baht. But agents will load more if they feel they can get away with it.
Obviously, agents are able to do this with new properties because they are empty and your only point of contact is the agent. Unlike in most western countries, it is also the case that resale properties, for the most part, also tend to be empty at the time of sale. And so, the practice of price loading is pretty much endemic throughout the industry, and easy for the agents to get away with.
Another cause for price loading is when another person directs an agent to a prospective buyer, or the buyer to an agent. This ‘Third party’ agent will expect to get something out of the deal, via the legitimate agent. Of course, the agent will not want to give up any of their legitimate commission, and so will load any extra onto the asking price.
In the unlikely event of an owner of a property still being residence at the time of selling, try to visit them without the agent and agree a price directly with them. You can then go back to the agent with an agreed price and know you are not being exploited. This may not please the agent, but they will still deal with the sale and transfer in order to get their legitimate commission.
Although not common, in the case of a resale property it is possible to buy direct from the existing owner, cutting out the agent. If you know, or can locate the owner this option could save you and the seller money. After agreeing a price, you only need to commission a lawyer to handle the legal transfer and the property is yours.
Finding the Complete Investor’s Package
As a foreign national, whatever your reason for wishing to purchase a property in Thailand, work, retirement, or buy to let, it may be that there are times when you will be away from your property. These are times when you need a trusted person to look after your interests. There are also many hurdles to overcome during the purchasing and transfer of the property, again, requiring assistance.
How can a prospective investor find an all-inclusive investor’s package? A service that will help in finding the ideal property, or indeed customize a dwelling to your specific requirements. A total package that will guide and assist you through the complexities of the legal process. A service that will provide maintenance and management of your home and all its communal areas.
A service of this kind will certainly save an investor a lot of time, stress and worry, before, during and after purchase. But who can provide this service, and how do you locate such an organization? To start, search for building and development companies that operate in Thailand. After the implementation of the 1979 Condominium Act, which was the catalyst for the building boom, major international companies immediately seized on the opportunity to be part of Thailand’s property transformation. Not only did they introduce new building and design concepts, but also a new way of thinking towards the owning and managing of properties.
No longer do investors need to search for a property, deal with an agent, find a lawyer and commission a management company, then frantically work to keep all these facets working as a cohesive unit. Residing in the country or currently abroad, the internet is your friend. Searching for accredited developers takes but a few minutes, there are dozens of companies now operating in the kingdom.
Internationally recognized developers are now operating all across the country, in all the major cities and tourist areas, including the islands. These companies have professionally produced websites which are clear, informative and are kept up to date, the same cannot be said for many websites operated by Thai real estate agents. A simple email enquiry to these developers is the next step.
They will provide you with detailed information on their current projects in the country and how their total package concept is there to guide and assist you throughout your venture into the Thai property market. In addition to this, you will be given details of their after sales service and warranties.
Enquire from developers about projects that they have undertaken in the past, here and abroad. Investigate these developments via the internet to satisfy yourself that the company has a track record which is tangible and qualified. If you are in the country, take time out to visit projects that they have already completed. This can be invaluable in gaining precise, first hand feedback by talking to residents of a development, as well as getting the “Seeing is believing” reassurance.
Request from a developer the opportunity to visit a project that is currently under construction. Professional companies will welcome you to an escorted visit to a construction site to view the work in progress and answer your questions. It is well worth visiting a site, but it must be pointed out that this should only be done by pre-arrangement, you should never turn up a site and expect to be able to just walk around under your own volition.
During your search for a quality property you will probably, and quickly come to the conclusion that many developments seem to very similar, with each unit pretty similar to every other unit. This is particularly true of the capital and the popular tourist areas. Many investors are now seeking something a little bit different. The best way to find a project which seems to be setting new innovative trends is to look at new locations, locations which have not, and are unlikely to be, exploited. That is not to say a location which is overly isolated, you will require a sufficiently supportive infrastructure. You will probably still want access to the larger conurbations, so check out the transport links.
On finding an area that you feel suits your requirements, a cursory search on local building regulations can be very informative. The local administrations in many un-spoilt areas now impose restrictions on the type and size of projects that they will allow. This is good news for the environment and the investor. It ensures that areas with existing natural beauty do not become exploited through over development. This gives a greater level of surety for the future value and potential returns of your property investment.
There are some conscientious developers that are working well with local authorities in the Pranburi district, Southwest of Bangkok, with its coastline along The Gulf of Thailand. Here there is a truly unique development designed to exist in synthesis with the local environment. The developer has produced and exciting and innovative project with its own supporting infrastructure, comprehensive management and maintenance service along with warranty packages specifically designed to bring peace of mind to the investor.
Even with quality development projects, it is rare to find one that stands head and shoulders above the rest. One that offers everything an investor could possible wish for, and yet still has that little bit more. There is one that has all this and, incredibly, its own private marina with its own canal giving access to The Gulf of Thailand. And, the affordability of the units in this project is astonishing.
A simple internet search will quickly show that this project certainly does stand out against the rest. Make an enquiry, the staff are responsive, well informed and professional, and unlike so many other companies, they are genuinely happy to be at your service.
For the discerning investor, Grand Marina Pranburi, ticks all the boxes, and more. This project may well turn out to be the best in Thailand this year, and is sure to gain many industry accolades. On your list of potential investment opportunities, this should be at the top.
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