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Property investment in Thailand for foreigners in 2024

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Phuket
View of Patong Beach in Phuket JittiNarksompong / Shutterstock

Thailand is rightly regarded as one of the best countries for property investment in Asia, and an excellent alternative to Europe and the Middle East. The Thai market offers investments without the extremes of gambling with a high jackpot and risk, or purely protective investments where the millions of pounds invested will certainly not burn out, but the returns won’t be substantial. Suffice it to say that investment funds based in Singapore and Hong Kong are choosing to invest in Phuket-based projects rather than in projects on their own developed islands. For many investors, Thailand has proven to be the perfect balance between emerging and fully established markets.

Thailand’s economy remains a bastion of stability in Asia

Thailand’s economy is one of the most stable and largest in the Association of Southeast Asian Nations (ASEAN). According to the International Monetary Fund (IMF) for 2023, Thailand ranks second in ASEAN in terms of total nominal GDP (574 billion US dollars) and fourth in terms of nominal GDP per capita (8,000 US dollars per person). The rankings are similar in terms of purchasing power parity.

GDP and inflation forecasts for Thailand in 2023:

Bank of Thailand (BoT)

National Economic and Social Development Council (NESDC)

GDP

+3.6%

+2.5–3%

Inflation

+2.5%

+1.7–2.2%

The Bank of Thailand’s GDP forecast for 2024 is +3.8% and inflation is +2.4%.

The NESDC identifies three drivers of economic growth:

  • Increased personal consumption by Thai citizens;
  • Stable restoration of foreign tourism to the country;
  • Stable expansion of private and public investment.

The Thai baht to US dollar exchange rate, as of September 2023, fluctuates between 35 and 36 baht per dollar. A decade ago, in September 2013, the range was between 32 and 33 baht per dollar. An increase or decrease in the exchange rate of 1 baht is deemed noteworthy by economists, as is inflation exceeding 3% in any given month. All of this indicates the stability of both the national currency and the economy as a whole.

The most significant increases in macroeconomic figures occurred in 2022, when, due to the substantial growth in energy costs, the dollar exchange rate plummeted to 38 baht, and inflation briefly surged to 7%. Nevertheless, compared to global standards, the shocks experienced by Thailand in 2022 seemed minor.

Tourism accounts for around 20% of Thailand’s economy, with the majority of GDP coming from exports. It should be noted that many economists classify tourism as a service export category, as money is also received from overseas. The COVID-19 pandemic has become an unprecedented challenge for Phuket’s economy, but not for the country as a whole.

Thailand faces unexpected challenges, but it has always shown a knack for minimising or quickly compensating for economic losses. For example, a significant drop in Russian and European tourists between 2014 and 2015 was countered by attracting tourists from China. Residents of that nation remain the top property buyers in Thailand, although the number of visitors from China has not fully recovered to pre-COVID levels.

Bangkok's Don Mueang
Bangkok's Don Mueang International Airport is almost entirely dedicated to low-cost airlines. Michaelnero / Shutterstock

Forecasts suggest that around 25-30 million tourists will arrive from abroad in 2023, which is 80% of the 2018–2019 peak, while the forecast for 2024 is around 30–35 million, which is almost 100% of the pre-pandemic levels. However, some markets have already exceeded pre-pandemic levels, such as Phuket, where visitors from Russia have already surpassed 2019 figures and may even be the highest number of Russian tourists ever recorded for Thailand. On the other hand, the Chinese tourism market is not expected to reach pre-crisis levels this year.

The decrease in visitor numbers can mainly be attributed to the postponed group tours from China. However, these tours are only catered by a handful of hotels. The current 3.4 million [overseas visitors in the first half of 2022] have a far wider market, including villa and condominium apartment owners, and hotel operators, not solely limited to the Chinese market.

Mikhail Bulanov Mikhail Bulanov Tranio’s Executive Director

Tourism generates demand for rental accommodation, not only from tourists themselves, but also from those working in the tourism industry and related sectors, be they Thais from other provinces or foreigners. Furthermore, the tourism industry in Phuket serves as a key driver for the island’s overall development, attracting diverse types of tenants such as wealthy European retirees and young digital nomads. By reinvesting the profits from tourism, the island offers a range of accommodation options to suit any requirement.

Choosing an investment project: location

From a property investment perspective, Thailand as a whole can be divided into three types of market, with geography being secondary and the economic profile of the location being primary.

Rama IV Road in the centre of Bangkok
Rama IV Road in the centre of Bangkok SirichaiKeng / Shutterstock

Bangkok

The capital of Thailand and its neighbouring provinces form a vast urban agglomeration with a population of many millions. It is the largest such conurbation in the country, as there are no other cities with a population of one million. The primary investment property in this area is condominium units, with the main income generating schemes being early stage purchases during the construction phase, sales on completion and long-term rentals.

Bangkok condos for sale 3,586 listings on Tranio
One-bedroom apartment in a luxury condominium, Watthan, Bangkok, Thailand for $348,000 $348,000
One-bedroom apartment in a luxury condominium, Watthan, Bangkok, Thailand

Total area 48 m² 1 bedroom

One-bedroom apartment in a luxury condominium, Pathum Wan, Bangkok, Thailand for $584,000 $584,000
One-bedroom apartment in a luxury condominium, Pathum Wan, Bangkok, Thailand

Total area 56 m² 1 bedroom

3 bed Condo in Crystal Garden Khlongtoei Sub District for $835,000 $835,000
3 bed Condo in Crystal Garden Khlongtoei Sub District

3 bedrooms 3 bathrooms

1 bed Condo in The Private Residence Rajdamri Lumphini Sub District for $417,000 $417,000
1 bed Condo in The Private Residence Rajdamri Lumphini Sub District

1 bedroom 1 bathroom

2 bed Condo in Taka Haus Ekamai 12 Khlong Tan Nuea Sub District for $292,000 $292,000
2 bed Condo in Taka Haus Ekamai 12 Khlong Tan Nuea Sub District

2 bedrooms 2 bathrooms

1 bed Condo in LIV@ 49 Khlong Tan Nuea Sub District for $223,000 $223,000
1 bed Condo in LIV@ 49 Khlong Tan Nuea Sub District

1 bedroom 1 bathroom

2 bed Condo in U Sabai Rama 4 — Kluaynamthai Phra Khanong Sub District for $250,000 $250,000
2 bed Condo in U Sabai Rama 4 — Kluaynamthai Phra Khanong Sub District

2 bedrooms 2 bathrooms

1 bed Condo in Hansar Rajdamri Lumphini Sub District for $320,000 $320,000
1 bed Condo in Hansar Rajdamri Lumphini Sub District

1 bedroom 1 bathroom

The capital’s market is considered developed and highly competitive: attractive properties sell out extremely quickly; you need to look for profitable options with an experienced agent and before the start of construction. At the same time, as condominiums in the capital are much more class-distinct than in Phuket, for example, the price range can be quite wide.

Price structure for apartments from one of the leading developers:

Segment

Price per sq. metre

D-minus

$1,000–1,700

D

$1,700–2,300

C

$2,300–4,300

B

$4,300–7,100

A

$7,100–11,400

S

$11,400 and above

In Phuket, this developer presents segments D to B, and in the Bangkok conurbation, everything on the list is available for viewing.

Developed tourist destinations

Phuket and Pattaya have traditionally been developed tourist destinations in the context of property investment, but by 2023 only Phuket has fully recovered, while Pattaya is still recovering from the coronavirus crisis. The process has been slow due to staff shortages, changing tourist demographics, a limited number of flights and the still unresolved problem of Pattaya not having its own airport.

Traditionally, Pattaya has excelled in offering more affordable investment properties with the associated quality issues. Given that tourism to this resort has not yet returned to pre-pandemic levels, cheapness at the expense of quality can easily be seen as a risk factor. It was difficult to rent or resell an apartment in a poorly located or poorly constructed condominium at the peak of tourism; now it is doubly difficult.

Real estate in Pattaya for sale 626 listings on Tranio
High-rise residence with swimming pools and gardens at 200 meters from Jomtien Beach, Pattaya, Thailand for From $112,000 From $112,000
High-rise residence with swimming pools and gardens at 200 meters from Jomtien Beach, Pattaya, Thailand

Total of 899 apartments

Low-rise premium residence with swimming pools in the center of Pattaya, Thailand for From $48,000 From $48,000
Low-rise premium residence with swimming pools in the center of Pattaya, Thailand

Completion in: 2028 Total of 816 apartments

Residence with swimming pools, gardens and around-the-clock security in the center of Pattaya, Thailand for From $76,000 From $76,000
Residence with swimming pools, gardens and around-the-clock security in the center of Pattaya, Thailand

Built in 2019 Total of 1060 apartments

Luxury high-rise residence with a water park, a hotel and restaurants, Pattaya, Thailand for From $70,000 From $70,000
Luxury high-rise residence with a water park, a hotel and restaurants, Pattaya, Thailand

Completion in: 2028 Total of 1400 apartments

Residence with three swimming pools and a roof-top terrace in the center of Pattaya, Thailand for From $78,000 From $78,000
Residence with three swimming pools and a roof-top terrace in the center of Pattaya, Thailand

Total of 188 apartments

Low-rise beachfront residence with a swimming pool, Pattaya, Thailand for From $236,000 From $236,000
Low-rise beachfront residence with a swimming pool, Pattaya, Thailand

Total of 44 apartments

New apartments in an exclusive residential complex, Pattaya, Chonburi, Thailand for From $87,000 From $87,000
New apartments in an exclusive residential complex, Pattaya, Chonburi, Thailand

Completion in: 2025.IV Total of 2470 apartments

Luxury residence with a swimming pool and a garden near the beach, Pattaya, Thailand for From $54,000 From $54,000
Luxury residence with a swimming pool and a garden near the beach, Pattaya, Thailand

Total of 161 apartments

Typically, resort property in Phuket and other popular locations, as well as property in the capital, will provide a secure income (up to 30%) if purchased early and sold after the property is commissioned. In addition, in developed tourist markets, there are opportunities for high income short-term rentals of apartments or villas, which can provide up to 10% of gross income per annum. In addition, developers often offer a guaranteed yield of 5–7% for the initial period after the property is put into operation, when tourist demand for the property is just emerging.

Phuket developers rarely rely on bank loans to finance construction. Instead, they finance the purchase of land plots, project development, permitting, and the start of construction from their own funds; the remaining financing comes from prepayments made by home buyers. Consequently, there is a significant benefit for buyers of housing under construction in Phuket, which can be as much as 30%.

Elena Milishenkova Elena Milishenkova Tranio’s Product Director
Khao Lak beach in Phang Nga province.
Khao Lak beach in Phang Nga province. This picturesque place is almost unknown to most foreign tourists. Iammotos / Shutterstock
Phuket property for sale 477 listings on Tranio
New luxury residential complex with excellent infrastructure within walking distance from Bang Tao beach, Phuket, Thailand for From $110,000 From $110,000
New luxury residential complex with excellent infrastructure within walking distance from Bang Tao beach, Phuket, Thailand

Completion in: 2026.I Total of 789 apartments

New exclusive residential complex within walking distance from Bang Tao beach, Phuket, Thailand for From $181,000 From $181,000
New exclusive residential complex within walking distance from Bang Tao beach, Phuket, Thailand

Completion in: 2025.I Total of 400 apartments

Large resort condominium for investment on the beachfront of Naithon Beach, Phuket, Thailand for From $146,000 From $146,000
Large resort condominium for investment on the beachfront of Naithon Beach, Phuket, Thailand

Built in 2023 Total of 251 apartments

Exclusive residential complex of villas with swimming pools and sea views within walking distance of Nai Thon Beach, Phuket, Thailand for From $914,000 From $914,000
Exclusive residential complex of villas with swimming pools and sea views within walking distance of Nai Thon Beach, Phuket, Thailand

Completion in: 2024.I 20 units in total

New turnkey studio apartment 700 m from Bang Tao beach, Phuket, Thailand for $157,000 $157,000
New turnkey studio apartment 700 m from Bang Tao beach, Phuket, Thailand

Total area 30 m² Studio

Residential complex with swimming pools, fitness centre and tropical garden, 850 meters from Bang Tao Beach, Phuket, Thailand for From $131,000 From $131,000
Residential complex with swimming pools, fitness centre and tropical garden, 850 meters from Bang Tao Beach, Phuket, Thailand

Completion in: 2025.IV Total of 231 apartments

New residence with swimming pools, gardens and a co-working area, Phuket, Thailand for From $72,000 From $72,000
New residence with swimming pools, gardens and a co-working area, Phuket, Thailand

Completion in: 2025.III Total of 609 apartments

Investment eco condominium with guaranteed yield of 5%, Layan, Phuket, Thailand for From $132,000 From $132,000
Investment eco condominium with guaranteed yield of 5%, Layan, Phuket, Thailand

Completion in: 2027 Total of 247 apartments

Emerging tourism markets

From an investment perspective, emerging markets include locations that are unfamiliar to most tourists, such as Hua Hin and Chiang Mai, as well as popular resorts where a developed property market has not yet been established, notably the islands of Koh Samui, Krabi and Phang Nga. Locations such as Bangkok have higher standards for the investor’s expertise, which includes the ability to distinguish their personal choices from what visitors demand in order to generate rental income.

Koh Samui property for sale 78 listings on Tranio
Spacious apartments and villas with private pools, 900 metres to Lamai Beach, Samui, Thailand for From $115,000 From $115,000
Spacious apartments and villas with private pools, 900 metres to Lamai Beach, Samui, Thailand

25 units in total

Furnished apartments and villas with private swimming pools and sea view, in a quiet area near Lamai Beach, Samui, Thailand for From $132,000 From $132,000
Furnished apartments and villas with private swimming pools and sea view, in a quiet area near Lamai Beach, Samui, Thailand

16 units in total

Magnificent villa with swimming pools and panoramic sea views, Koh Samui, Thailand for $673,000 $673,000
Magnificent villa with swimming pools and panoramic sea views, Koh Samui, Thailand

Total area 320 m² Land area: 700 m²

Off-plan tropical pool villas a few steps from Plai Laem Beach, Koh Samui, Thailand for $275,000 $275,000
Off-plan tropical pool villas a few steps from Plai Laem Beach, Koh Samui, Thailand

Total area 116 m² Land area: 260 m²

First-class villa under construction with stunning sea views, Bo Phut, Koh Samui, Surat Thani, Thailand for $685,000 $685,000
First-class villa under construction with stunning sea views, Bo Phut, Koh Samui, Surat Thani, Thailand

Total area 625 m² Land area: 678 m²

New traditional style villas near Choengmon Beach, Bo Phut, Koh Samui, Surat Thani, Thailand for $568,000 $568,000
New traditional style villas near Choengmon Beach, Bo Phut, Koh Samui, Surat Thani, Thailand

Total area 220 m² Land area: 220 m²

Complex of 6 villas with swimming pools near Choengmon beach, Bo Phut, Koh Samui, Surat Thani, Thailand for $6,000,000 $6,000,000
Complex of 6 villas with swimming pools near Choengmon beach, Bo Phut, Koh Samui, Surat Thani, Thailand

Land area: 2,912 m²

Complex of villas with swimming pools near beaches, Samui, Thailand for From $168,000 From $168,000
Complex of villas with swimming pools near beaches, Samui, Thailand

15 units in total

The main advantage of emerging markets is the opportunity to invest in a property that will retain and increase its value for years to come: a successful seaside villa, for example. In Phuket, there are virtually no such properties left, and every new project is in high demand.

The downside is that an emerging market may not offer a quick return on investment and will be much less stable in a crisis than a market in Bangkok or Phuket. Emerging markets also differ in that property rents and prices can be significantly lower than in developed markets. A beachfront hotel room in Koh Samui can cost 30 US dollars per night, while the same room in Phuket will cost at least twice as much.

Choosing a resort investment property: types of investment

Apartment or villa

The debate over whether a villa or an apartment is better for an investor has been going on in Phuket for years. It will continue until Thailand changes its land laws to allow foreign ownership. Although there are proponents of this reform, their attempts to lobby for it over the past few decades have been in vain.

The main advantage of owning an apartment in a condominium is that you can obtain full ownership in your name (foreign freehold). By law, villas are usually leased for 30 years with the option to renew twice for another 30 years each time (leasehold). However, apartments in condominiums are also available on a leasehold basis, which can prove lucrative.

Condominium is a form of ownership, not a type of building, as the term literally means «shared ownership».

Technically, there is nothing stopping a developer from building a condominium in a low-rise complex format, as opposed to a traditional apartment building, resulting in individual units that resemble townhouses or villas. Nevertheless, in reality this is extremely unusual and there is a huge demand for such properties.

Phuket condos for sale 39 listings on Tranio
Spacious 1 Bedroom Apartment in Surin Beach for $117,000 $117,000
Spacious 1 Bedroom Apartment in Surin Beach

Total area 39 m² 1 bedroom

Spacious 1 bedroom apartment between Surin and Ban Thao Beach for $190,000 $190,000
Spacious 1 bedroom apartment between Surin and Ban Thao Beach

Total area 36 m² 1 bedroom

2 Bedroom Apartment in the most prestigious area of Phuket, 800 m from Bangtao beach for $355,000 $355,000
2 Bedroom Apartment in the most prestigious area of Phuket, 800 m from Bangtao beach

Total area 88 m² 2 bedrooms

Spacious 1 bedroom apartment between the magnificent beaches, 5-minute drive from Patong Beach for $313,000 $313,000
Spacious 1 bedroom apartment between the magnificent beaches, 5-minute drive from Patong Beach

Total area 74 m² 1 bedroom

Fully equipped 1 Bedroom Apartment 200 m from Rawai Beach for $151,000 $151,000
Fully equipped 1 Bedroom Apartment 200 m from Rawai Beach

Total area 42 m² 1 bedroom

Spacious One bedroom Apartment between Surin and Bang Tao Beach for $201,000 $201,000
Spacious One bedroom Apartment between Surin and Bang Tao Beach

Total area 57 m² 1 bedroom

1 Bedroom Apartment with an exclusive residential complex with a good infrastructure and services near Nai Yang Beach for $127,000 $127,000
1 Bedroom Apartment with an exclusive residential complex with a good infrastructure and services near Nai Yang Beach

Total area 40 m² 1 bedroom

Spacious One bedroom Apartment in Karon Beach on Phuket for $224,000 $224,000
Spacious One bedroom Apartment in Karon Beach on Phuket

Total area 97 m² 1 bedroom

Villas and townhouses are traditionally more expensive: from 300,000 US dollars for a modest house versus 110,000 US dollars or even less for a studio apartment, but in the future they can provide higher rental income (or, conversely, lower). Condominiums have a narrower yield spread. In all cases, it makes sense to focus on the level of «up to 10% per annum on the amount invested».

Phuket’s advantages include a wide range of supply at different price points, with entry thresholds starting at 110,000 US dollars in developing locations and 330,000 US dollars in developed resorts with premium services. In addition, new developments in Phuket in all classes offer good increase in value during the construction phase (approximately 10–15% per annum) and high rental yields thereafter, averaging 7–8% per annum.

Elena Milishenkova Elena Milishenkova Tranio’s Product Director
Phuket villas for sale 243 listings on Tranio
Exclusive residential complex of villas with swimming pools and sea views within walking distance of Nai Thon Beach, Phuket, Thailand for From $914,000 From $914,000
Exclusive residential complex of villas with swimming pools and sea views within walking distance of Nai Thon Beach, Phuket, Thailand

Completion in: 2024.I 20 units in total

Residential complex of first-class villas with private pools, Phuket, Thailand for From $587,000 From $587,000
Residential complex of first-class villas with private pools, Phuket, Thailand

Completion in: 2024.IV 21 units in total

New complex of villas with swimming pools close to a golf club, Phuket, Thailand for From $376,000 From $376,000
New complex of villas with swimming pools close to a golf club, Phuket, Thailand

Completion in: 2024.III 30 units in total

New villas with swimming pools and gardens close to beaches, Phuket, Thailand for From $555,000 From $555,000
New villas with swimming pools and gardens close to beaches, Phuket, Thailand

67 units in total

Luxury complex of villas in a prestigious area of Bang Tao, Phuket, Thailand for From $567,000 From $567,000
Luxury complex of villas in a prestigious area of Bang Tao, Phuket, Thailand

Completion in: 2025.I 22 units in total

Exquisite villa with a pool, a garden and a garage in Muang Phuket, Phuket, Thailand for $700,000 $700,000
Exquisite villa with a pool, a garden and a garage in Muang Phuket, Phuket, Thailand

Total area 348 m² Land area: 471 m²

Exclusive villa with a pool, a garden and a garage in Muang Phuket, Phuket, Thailand for $1,383,000 $1,383,000
Exclusive villa with a pool, a garden and a garage in Muang Phuket, Phuket, Thailand

Total area 723 m² Land area: 1,195 m²

New project of modern villas with private pools in Chalong, Muang Phuket, Phuket, Thailand for From $201,000 From $201,000
New project of modern villas with private pools in Chalong, Muang Phuket, Phuket, Thailand

Built in 2023 80 units in total

Independent and managed rentals

The era of independent property management is slowly fading away, which bodes well for developers, investors and tenants alike. Delegating specific operational responsibilities to professionals is a sign of a maturing market.

Most new short-term rental properties are often launched with the expectation that the property will be managed by a hospitality company and part of the property’s name will be a well-known hotel brand, such as Wyndham or Banyan Tree.

If you want to rent out your property independently, you will need a wide range of knowledge that goes beyond the field of marketing. For example, any property in the tropics will suffer from a humid and hot climate, and if it is located on the coast, this factor must also be taken into account. The repair and maintenance of the building will require the hiring of local labour, and the payment of taxes will require the outsourcing of an accountant. A separate issue is the need to monitor changes in legislation.

An experienced management company takes on all the associated risks and is legally responsible for the fulfilment of obligations, i.e. for the investor’s profit. In the event of unforeseen circumstances, the investor’s interests are protected along with the company’s other clients.

Golf courses and surrounding residential areas in the centre of Phuket
Golf courses and surrounding residential areas in the centre of Phuket Stock High angle view / Shutterstock

Short and long term rentals

Investment in resort property typically involves short-term rental of an apartment or villa to maximise income, often up to 10%, which is a realistic target.

Subletting provisions are often included in long term leases. This option is similar to short-term rental of a villa through a management company, except that an individual tenant rather than a legal entity will be renting the property.

This is not to say that buying a villa or apartment for long term rental is without merit. There are many specific locations in Phuket where you can focus on this particular income stream. Profitability is likely to be lower than that of daily rentals, even allowing for stable occupancy throughout the year. Nevertheless, this option has merit as a secure investment. In addition, for investments of up to 110,000 US dollars it may be the only alternative available.

Rents in the centre of the island are low; in terms of profitability, such apartments will be inferior to those in the resorts, but they can be rented for long periods to winter visitors. You can earn 300–500 US dollars a month in an apartment, as opposed to 1000–2500 US dollars for a place on the coast. However, you won’t be able to find an apartment on the coast for around 70,000 US dollars, whereas you can find such properties in the centre of the island.

Lana Romanuk Lana Romanuk Tranio’s sales manager in Thailand

The location of a property purchased in Phuket is largely determined by its intended use. For daily tourist rentals, the ideal locations would be the west coast from Nai Harn to Mai Khao, which includes Karon, Patong, Surin, Bang Tao, Nai Yang and Nai Thon. However, if the property is to be used as a residence or for expat/winter rentals, other locations may be more suitable, such as the centre or east of Phuket, including Kathu, Wichit and Chalong.

A studio in a condominium in the centre of Phuket may be the best option for someone who has just moved to the island and is unsure of the best place to live. The studio will be ideal for a new expat without a large capital reserve, but with a taste for quality and modern living.

Lana Romanuk Lana Romanuk Tranio’s sales manager in Thailand

It is also worth noting that Bang Tao deserves special attention. A number of new properties are currently under construction further away from the coast, but are being marketed as housing by the beach.

Property for sale in Bang Tao Beach 98 listings on Tranio
New luxury residential complex with excellent infrastructure within walking distance from Bang Tao beach, Phuket, Thailand for From $110,000 From $110,000
New luxury residential complex with excellent infrastructure within walking distance from Bang Tao beach, Phuket, Thailand

Completion in: 2026.I Total of 789 apartments

New exclusive residential complex within walking distance from Bang Tao beach, Phuket, Thailand for From $181,000 From $181,000
New exclusive residential complex within walking distance from Bang Tao beach, Phuket, Thailand

Completion in: 2025.I Total of 400 apartments

New turnkey studio apartment 700 m from Bang Tao beach, Phuket, Thailand for $157,000 $157,000
New turnkey studio apartment 700 m from Bang Tao beach, Phuket, Thailand

Total area 30 m² Studio

Residential complex with swimming pools, fitness centre and tropical garden, 850 meters from Bang Tao Beach, Phuket, Thailand for From $131,000 From $131,000
Residential complex with swimming pools, fitness centre and tropical garden, 850 meters from Bang Tao Beach, Phuket, Thailand

Completion in: 2025.IV Total of 231 apartments

Investment eco condominium with guaranteed yield of 5%, Layan, Phuket, Thailand for From $132,000 From $132,000
Investment eco condominium with guaranteed yield of 5%, Layan, Phuket, Thailand

Completion in: 2027 Total of 247 apartments

New residential complex within walking distance from Bang Tao beach, Phuket, Thailand for From $161,000 From $161,000
New residential complex within walking distance from Bang Tao beach, Phuket, Thailand

Completion in: 2025.I Total of 273 apartments

Spacious modern apartments near the beaches, surrounded by beautiful nature, Layan, Phuket, Thailand for From $202,000 From $202,000
Spacious modern apartments near the beaches, surrounded by beautiful nature, Layan, Phuket, Thailand

Completion in: 2027 Total of 128 apartments

Luxury complex of villas in a prestigious area of Bang Tao, Phuket, Thailand for From $567,000 From $567,000
Luxury complex of villas in a prestigious area of Bang Tao, Phuket, Thailand

Completion in: 2025.I 22 units in total

Types of investment activities in Thailand and investment programmes

A quality investment property in Thailand will increase in value and generate rental income before resale. The country would not be so popular if you had to choose between renting and reselling. Phuket resort property is in demand because it does both at the same time.

The parameters are interrelated. A house or apartment that generates a high rental income will steadily increase in value. The key to success is to find and buy such a property quickly, as lucrative opportunities are fleeting. While buyers of homes for their own use consider the colour of the bathroom tiles, investors assess the demand for rental properties. If demand is high, they will buy.

Buying early is the first secret of successful investment. Often, by the time the property is delivered, the price has risen by 30%, but in some projects the purchased apartment can be put on the market within a week of purchase and sold at a profit, even if it only exists on paper.

It is important to consider that an asset may become less attractive over time due to external factors. Tenant preferences and market trends may change, and new properties such as condominiums and villas may emerge, diverting tenants’ attention elsewhere. As a result, a proportion of investors will choose to take profits, similar to a Forex trader placing a take profit order. In this case, since the apartment has reached the required profit threshold, it would be preferable to sell it to generate income.

Usually, the developers determine the concept of the property beforehand: is it suitable for permanent residence or for short-term rental? In the first case, you are buying an apartment that you can rent out yourself or through a specialised company.

In the second case, the investor essentially buys a room in a future hotel, often under a prestigious hotel brand. The main advantage is that everything in such a project is aimed at maximising profit; the main disadvantage is that, in order to increase it, the developer and management company impose various restrictions, such as a limit on the length of the owner’s stay and strict furnishing standards from which it is impossible to deviate.

The main types of generating rental income are via guaranteed yield and rental pool. Typically, investors offer a guaranteed yield during the initial stages of a property’s introduction to the market, while it is still unfamiliar to tourists. Subsequently, they switch to a rental pool scheme whereby the income is dependent on actual revenue. In Phuket, a reasonable guaranteed yield is around 5–7% per annum. However, a popular property can produce a yield of 9% or more with a rental pool scheme.

condominiums in Phuket
Even low-cost condominiums in Phuket often have their own swimming pools and other recreational facilities for residents. Tanya Keisha / Shutterstock

Increasing profitability in Thailand

There are various ways to boost profits from property investment in Thailand. The main secret is to buy early. At the initial stage, when the project has just been launched and construction has not yet started, developers offer the most favourable conditions: the price may be 30% lower than at later stages; furnishings may be offered free of charge; instalment plans may have a more attractive payment schedule. The developer needs to get investors interested in a new project, so early bird discounts are beneficial to both the developer and the investors.

You should not neglect the developer’s instalment plan, which is often interest-free. Considering that inflation in Thailand is usually 2–3% per year, the developer can afford such terms. In addition, most developers know that mortgages in Thailand are almost inaccessible to foreigners, so a project designed for a foreign investor is immediately planned with this in mind. Regular properties may cost less for a Thai buyer, but do not offer interest-free loans.

Some Phuket developers offer buyers the opportunity to use their project as a financial instrument, in addition to rental yields. Essentially, by purchasing an apartment in a project without instalments during the earliest stages of construction, buyers thereby finance the project, and developers are willing to pay up to 5% annual yield on this capital, even during the construction phase.

This scheme is called pay back. It is a good way to get a double benefit: to buy an apartment at a more favourable price at the start of sales and start earning income even before the apartment is rented out.

Angelina Belyaeva Angelina Belyaeva Tranio’s partner relations manager

Trivial as it may sound, choosing an agent who has a long history with a particular developer also helps to speed up the return on investment. An old and trusted partner may have preferential terms from the developer that are only offered to them and not available to others.

As in many other areas of business, the seller is often willing to offer discounts to an investor who is willing to buy several units in a condominium or several villas in a complex. Although these are substantial assets, the seller’s primary objective is still to sell one project and move on to the next.

You can also save money on the type of ownership if the developer offers both freehold (full ownership in a foreigner’s name) and leasehold (long-term lease). However, this only applies to condominiums, as only in condominiums is it possible to register a property as freehold in a foreigner’s name.

Tranio has an office in Phuket. Our local lawyers and managers will help you complete a turnkey deal and the cost of purchase will not increase.

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Finally, the basic advice is to treat property investments as just that: investments. Pick those that make a profit rather than those that appeal to personal taste. You may not like a particular condominium, but if it is popular with tourists, it is likely to be profitable. It is important to remember that we are talking about future income, not immediate gains. Investing in an area that will be tourist-friendly in a year’s time may prove to be a wise decision in the long run.

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    Tranio’s managers offer advice on buying real estate in Thailand
    Stepan Melnichuk
    Stepan Melnichuk
    Real Estate Expert Tranio Thailand
    +44 17 4822 0039
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