Investing in a home is one of the biggest milestones in a person’s life. The purchase of a property for both residential or investment purposes has historically promised returns on investments through capital appreciation as well as potential rental yields. When taking a look at global residential trends, there are few countries that measure up to Thailand in terms of returns, with sellers earning 2% to 11% on investments and renters receiving anywhere from 5% to 8% in yield per annum, depending on the location of the property.
There are certain factors for investors to consider when purchasing a property, to ensure that they maximize their returns. We take a look at eight of the most vital considerations investors need to make when deciding to take the first step to owning their property:
1) Engage a property agent
Good property agents are experts in identifying the right property according to your specific needs and wants, wherever you intend to purchase a unit. Seeking the assistance of a leading developer such as Sansiri can make the difficult task of buying a property much easier. Sansiri has a host of agents at hand to guide you through the process.
2) Research is important
Investors need to be aware that the purchase of a property comes with a fair amount of research. Investors should study the rental market in the location they intend to invest in, the average price of similar properties in the area and even the market demand for your target purchase. It is also increasingly necessary to shop around for the best home loans to maximise your investment potential.
3) Consider long-term market conditions
Many experts claim that property markets tend to follow cycles. They are long-term investments that won’t go up in a nice smooth, straight line – temporary falls are sometimes inevitable so investors need to consider that before they enter the market.
4) Know your budget
This is one of the most important factors to take into account. Many homebuyers overcommit to property loans only to find themselves in a sticky situation due to losing a job or experiencing unforeseen circumstances. Look at your mortgage repayments and consider if they are practical based on your financial situation. Also, always ensure that you have an emergency fund set aside with at least six months of fixed expenses at hand in case of an emergency.
5) It’s not only about the price
Although the overall cost of your property should be a main consideration, it’s important to consider its future potential as well. Be it a developing neighbourhood or a suburb, doing research on the upcoming plans for development in the surrounding areas, e.g. a rail network, office buildings or other amenities, will help you to make a decision.
6) Read through your contract thoroughly
The purchase of your property is a legal and binding contract. Be aware that your future plans to renovate, sub-let or even sell the property are bound by the terms and conditions that you have agreed to. If you intend to sell the property at any time, for example, there will be a 2% transfer fee that is generally split between the seller and buyer unless otherwise stated. It would be wise to consult a local attorney to properly advise you on the important details in your contract.
7) Be aware of the full cost of buying a property
Condominium ownership comes with supplementary costs such as monthly maintenance fees. Owners in Thailand are also committed to paying for certain repair works when renting out their properties.
8) Don’t skip on your building inspection
Not all investors have the required attention to detail to ensure that a property has all the boxes ticked of being ready for sale. Ensure that the unit you are interested in is in good condition with careful inspection. If in doubt, you can always seek the help of a property agent for advice.
Find more information on potential property investments and other factors for consideration here.
9) Plan for the management of your property
If you are an overseas investor, managing your property can be very tough and expensive, if you have to fly down to your property regularly. Some developers like Sansiri have dedicated after-sales services to ensure that your property is well-taken care of when you are overseas. From day-to-day maintenance and sourcing for tenants to the selling of your property, Sansiri’s after-sales service providers PLUS Property can guide and provide you with hassle-free property care and management solutions. Hostmaker, London-based property management service and Sansiri’s partner, helps rent out your property on your behalf, easing the process all the way from putting up listings to vetting potential tenants. Sansiri’s Home Service App gives you real-time notifications about administrative matters regarding your property such as mails and packages, outstanding payments, repair reports etc., so that you can stay updated on the status of your property.
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