As first-time investors in overseas property, price is not the only factor that buyers need to consider before taking the first step. We take a look at the many considerations that go into buying investment property in Thailand.
Buying property has long been considered to be one of the safest ways to secure long-term investments, due to its low-risk and volatility. The promise of high returns on investment (ROI) through capital appreciation and rental yields make it one of the most popular investments in the market today.
However, there are many factors that buyers, especially overseas investors, need to consider to ensure that their returns are maximised.
Importance of Engaging an Agent
The world of property investment can be daunting especially for first-time buyers, due to the wealth of information that they will have to sift through. Speaking to experts will help buyers reduce the overall stress as good property agents will be able to identify the best property for your needs and wants. Going straight to the property developer’s agents will also give buyers the added advantage of exclusive promotions, as well as getting the latest updates on regulations, processes and other important information.
Do Thorough Research
Investors should definitely do their own research, and not rely solely on their property agents for all the information. In addition to considering both the short-term and long-term market conditions, they should also study the real estate potential of the location that they want to invest in, such as potential rental yields, capital gains, average prices and market demand of prices in the location. Buyers should also do their homework on the best financing options available for their needs, especially for those investing overseas, as it will have a direct impact on the returns on their investment.
Have a Clearly-Defined Budget
It is important for investors to consider their budget and financing options, and plan for rainy day situations such as a loss of job, recession etc. with an emergency fund. The global economic slowdown brought about by the COVID-19 pandemic showed that many investors were left in lurch because they lost their main source of income and were not able to finance their investment due to poor planning. By having a clearly defined budget that takes into worst-case scenarios, investors will be able to quickly filter out properties that they cannot afford, making their search a more straightforward one.
Price is not Everything
That said, price should not be the only consideration when choosing your property. If investors are buying property as a long-term investment, they should consider its future potential when calculating returns. Buyers should do their research on the upcoming development plans the government has for the area or city they are planning to invest in e.g. upgrading transport infrastructure, family-friendly amenities, introduction of foreign visas etc.
Read the Contract Carefully
A common mistake that investors make is not reading and understanding all the terms in their purchase contract. Taxes, renovation periods, rental conditions, additional costs are just some of the terms and conditions that developers can spell out in the purchase contract. It is important to speak to experts (local property agents or lawyers) to get a deeper understanding of the contract and its important details before signing it.
Inspect Your Purchase
As with any new purchase, it is important for buyers to conduct a thorough inspection, especially for properties that have been bought off-plan. This will ensure that buyers would not have to spend extra to fix any defects. Overseas investors have also been known to engage local, third-party property inspectors to conduct these inspections, before the transfer is made from developer to buyer.
Have a Property Management Plan
Property management is another often overlooked aspect of owning investment property. From regular maintenance issues to tenant management, home owners need to have a comprehensive plan to take care of their property after purchase. Overseas property investors have it slightly tougher, as flying down to the property regularly can be tough and expensive. Engaging property developers’ comprehensive after-sales services will help to ensure that the property is well-taken care of when investors are overseas. Developers like SC Asset also have dedicated mobile apps that give homeowners real-time updates and notifications on administrative matters such as outstanding payments, repairs, tenant management etc.
Drop us a line if you’re thinking about taking that first step into investing in Thai property, and we will be with you every step of the way.
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