Buying a holiday property is a stable and profitable investment. The main purpose of which is not only to save the invested funds, but also to receive income. I propose to consider several investment strategies that can be implemented with the help of real estate in Phuket.
Rental income + sale
When it comes to resort real estate, the main source of income is rent. The favorable climate on the island allows you to receive tourists from all over the world all year round. This gives owners an advantage - firstly, the absence of the so-called "off season", and secondly, the tenant market is not limited to guests from one country only. Annually, you can earn up to 12% of the invested funds on renting out.
The best time to sell is 5 years after registration, as the 3.3% tax part is excluded.
And do not forget about the annual capitalization of the object, which averages 5%.
Well, if you buy real estate at the initial stage, then you can also earn on a price increase of up to 25% during the construction period.
This strategy, although conservative, allows the owners to receive an excellent total return on investment.
The main nuance in the implementation: knowledge of a suitable object. Since not every project will give a high rental rate, and especially capitalization. Apartments and villas located near the sea are in high demand for rent and never lose value.
Suitable for: Investors who are looking for the highest possible return on investment in resort properties with a possession of 5 years or more. And they are considering saving the property for their own use in the future.
Guaranteed Income + Buyback Program
In Phuket, there are offers with a fixed rental income, the so-called guaranteed rental. That means, even at the stage of purchase, the owner knows the exact amount of his income, which is prescribed in the contract for a limited period of time. On the one hand, this is very convenient, since all obligations are known in advance, on the other hand, if the property has earned many times more, then the owner cannot claim an additional payment.
This strategy is usually implemented by investors who do not plan to use the property themselves, as under the condition of guaranteed rent, residence will be limited to 14 to 30 days per year.
After the end of the guaranteed lease period, the developer buys your object on the terms specified in the contract, as a rule it is 100%+, since capitalization is taken into account.
This strategy allows the investor to accurately calculate the income for the entire period of the program and take care of exiting the investment.
Suitable for: Investors who want to be sure of the amount of income from rent and subsequent sale, accurately calculate the timing of the investment and the benefits from it.
Purchase at the initial stage + sale by the end of construction
This strategy is common in Russia. However, in Thailand it is more about urban rather than resort real estate. On the one hand, an interest-free installment plan for the purchase during construction and the ability to leave a significant amount ready to go allows you to implement such a scheme, while the risk is just as great, and if you miscalculate with the project, the apartment may “freeze”. In this case, the owner will be forced to pay the full cost and make additional registration fees. The income will depend on the demand for the project during construction and can range from 10 to 25% within 1-2 years.
If you have correctly decided on the property, then by the time it is ready, it will be possible to renew the contract for a new buyer, who in turn pays the balance of the apartment to the developer and registration fees.
Suitable for: Investors who are used to high-risk strategies and want to get the maximum profit in a short time.
To summarize: We have considered 3 possible strategies, and determined who they may suit, depending on the portrait of the investor, the goals and the term of the investment. Decide what is close to you, and on the part of our agency we will offer the most suitable options for you.
