Rental properties are one of the most lucrative forms of investments if you are looking for an asset that will continue to pay dividends in the long run. In order to maximise your returns, there are several features to look out for in a development before you make the decision to invest. These attributes of a successful investment property can make the difference between one that continues to yield profits (and accrues in capital value) and one that doesn’t. We take you through some of the most important factors to consider:
The neighbourhood you are investing in
This is a main factor that affects both the kind of tenants you attract as well as potential rental yields. Investing in an area that draws working professionals will ensure that you will always have a steady stream of tenants. Properties that are located where there are more job opportunities will attract these professionals, as proximity to one’s office is a major factor when considering rental options.
It is also always a good idea to ensure that there are educational facilities where you invest in; students make up for a large portion of those looking to rent for the duration of their studies. The presence of schools nearby will also be a consideration of families when looking to relocate. It is also relevant to do a bit of background research into crime rates. Tenants generally look for properties that are located in safer environments for obvious reasons. The area should also be surrounded by amenities such as shopping malls, banks, movie theatres, public transport options and other perks that will attract renters and expatriate communities.
Facilities within the development
Condominium units that come with swimming pools, gyms, study rooms, barbeque facilities and the likes will always demand higher rentals, especially for families with kids looking for a self contained development. Developers are increasingly realising that these touches are what makes the difference between standalone units that cater solely to residential purposes and ones that create an all-encompassing lifestyle community. Take the new lifestyle-centred, millennial-focused XT condominiums for example, which come with a new concept of co-sharing facilities such as co-work/play space, photo studio, cooking studio, crafts and arts studio, co-creation space, catering to a wide range of lifestyles to enrich residents' daily lives.
Future infrastructure plans
It is extremely important to study future blueprints for the area in which you are investing. Are there going to be an influx of prospective tenants due to the building of a rail system or new office spaces? Is the government of the country promoting the vicinity as a tourist hub in the near future? Taking the Bang Sue area in Bangkok as an example, properties in the neighbourhood will see an exponential rise in rental yield when construction of the country’s high-speed rail has been completed.
Local property taxes
This is one factor that can chip away at rental yield, affecting your profits from an investment. The Thai government imposes a fixed transfer fee of 2% of the sale figure when purchasing or selling a property. The fee is generally shared between the buyer and seller (at 1% each) with responsibility landing on both parties but is negotiable depending on the terms agreed upon. If the property has been owned for equal to or more than five years, a stamp duty of 0.5% is also imposed on the sale. For more on overall tax structures in relation to Thai property, refer to one of our previous articles here.
After-sales services
Having to constantly visit the property to check on maintenance issues, handle tenant negotiations and to hunt for prospective tenants can take up a lot of time and money. Purchasing a property that comes with a complete suite of after-sales services will go a long way in helping you earn from your rental property. After-sales services like PLUS Property and Hostmaker can help with consistent maintenance and tenant sourcing, which will ensure the longevity and rentability of your property.
With several of the major cities in Thailand developing at exponential speeds due to infrastructural developments and a booming job market, property investment purchases are looking very attractive. You can take a look at Sansiri’s units on offer here.