Leasehold or Freehold

For buying a freehold condominium is the easiest, simplest and well known transaction. A condominium is formed by a group of apartments and common areas which has obtained a Condominium license. A condominium title is a title to a part of a building or buildings with multiple owners, and a fractional interest in the land and other common assets and common parts of the building.

The title will state the floor area of the private apartment, the ground area of the common land and the percentage interest which that apartment has in the common property. This percentage also represents the value of the voting interest in the condominium company or owner association. The law allows foreigners to hold 49% of the total units in a condominium complex on a freehold basis. The remaining 51% can be transferred to Thai juristic. Foreign investors can lease the remaining 49% units left from the developer on a long term basis (30 years lease with tow prepaid 30 years renewal).

Foreigner investors can not own land in their own names in the country, and now aware that recent law restrictions introduced in May 2006 has limited the use of companies (Thai entities) for property purchases. These two assumptions has driven the property trend of the last two years, sometimes leading buyers to superficial decisions which might coast them money in the long term of resale profitability.

The amendments on foreign Business Act had a significant impact in Thailand where over 90% of investments derive from foreign investors. In this atmosphere of uncertainty, the first Market reaction was a slow down in the lands and private Villa demand, followed by a fast increase in the demand of remaining condominium units and lands suitable for condominium developments. Today, buyers perception is still that a ‘leasehold’ on a condominium is some how safer than a lease on a land where sits a private villa home.

But if you would like to buy a house or a villa, you should not be deterred by the fact that you can’t acquire freehold land. The villa/home can be owned by on your name freehold, while you must ensure a proper and well constructed lease for the land is drafted. In this way you will have effective ownership and still abide the laws of Thailand. More, the land lease contract can contain an option to purchase that could be exercised in the event the laws on foreign ownership change- or you sold the property on to a Thai legal entity. For both Condominium units and land, the structure of lease contract is always complex and needs to be reviewed carefully with respect to the properties current ownership and your own personal needs.

For those who is planning to retire in Phuket are oriented to invest in a private villa featuring garden space and pool, while holidaymakers and yield based investments take in consideration both opportunities.

If you are looking at entering the Thai property market. You are not the only one, there are many reasons. Thailand is providing to be a very attractive retirement destination, where you will find the living environment welcoming and familiar. Retirement visas are available to forgivers, over 50 years of age. Thailand has very good school, an excellent health care system and it is seem as a friendly country in which to live or to visit. The country boasts excellent infrastructure, as well as world-class facilities in many resort towns. The region also presents the largest growth market in Asia, with Real estate markets growing at an average of 10-15% per year.

Buy-to-let Investment Thailand.

The term “Buy-to Let” means to buy a property through normal procedures. When the sell is completed the owner then seeks to rent this property for a monthly income.

The "Buy to Let" Market in Thailand.

The market in “Buy to Let” is growing fast in Thailand. Buy to Let Properties are in high demand. The need for short-term rental accommodation is satisfying with the increased tourist number. The number is up in 10% per annum.

The tourist industry marketing is not only encouraging tourists, but also investors. Investors (property buyers) concentrating on more popular destination, with a view to achieving maximum returns on the investment from their Buy- to- Let options.

"Buy-to-Let" Potential in Thailand

Thailand is exotic and always been popular as a holiday destination. Even with the economic and political climate, Thailand still has a high number of tourists and still in the 1st place in Asia tourist destination.

The Kingdom welcomes foreign investors in the real estate market. Number of tourists that arrived to Thailand 2007 was a total of 14.5 million, 2008 was a temporary slow, for the reason of the gravity of world economics and political uncertainty. But for 2009 however, Thailand predicts a slow grows with total arrivals reaching 16 million up by 3.3%.

The goal of any "buy-to-let" investor is to cover any mortgage payments and generate a secondary income stream from their property investment. Provided the property is selected in a prime location, Thailand allows investors to deploy this strategy. They may cover all mortgage payments and bills for the year with rental income generated from the high season months alone (4 months, November to Feb).

Short-Term Letting or Long-Term Letting

The final decision to be made by the "buy-to-let" investor is which letting strategy to use. It may seem obvious that the highest income is made by the property owner by letting out short term during the high season. However you must remember the increased overheads involved in regularly finding short term rental clients and the maintenance costs involved between clients. Long term rentals typically bring lower priced rentals but they usually require far less input from the property owner and the rental income is fixed and stable over the course of the year.

Some property owners choose to rent medium term during the low season and then short term to higher paying holiday clients during the high season. The decisions to be made on your letting strategy in Thailand are usually answered in part by the property you purchase and where it is located.

Thai Property Rental

In Thailand "buy-to-let" investments are concentrating towards the short term biases due to the current luxury style of the developments that are being built with the expectation of the expected increasing tourist market.

The "buy-to-let" may not be an ideal for every investor; we recommend the rental property should be chosen wisely. It will need to be a rentable property in a popular location to allow you to maximize the income from your investment. Even in a very busy market, competition is high. In order to maximise occupancy rates it is vital to achieve the correct formula of location, property, unit and monthly rental charge as this will have a direct result on your rental income.

A great benefit from this type of investment is that during the time the property is being rented out, it is earning the investor an income as well as acting as a holiday home while still appreciating in value.

Tax on rental income is between 10 and 30% of the rental income, depending on the type of property you are renting out.

The "buy-to-let" investment option presents a sound investment decision and developments in Thailand are now ideally positioned for this strategy.