Sino ThaiWhen purchasing real estate in Phuket, it is important to understand that real estate is, first of all, a location. If you are buying a home for your own residence, then choose the area that meets your needs. If you are looking for an investment property that will provide you with stable passive income and that can be easily resold if necessary, it is important to consider the needs of your future tenants or buyers. The unfavorable location of the object cannot be compensated by either beautiful design or other advantages.
Investing in investment real estate involves purchasing an apartment or villa for subsequent rental or resale. Management companies of such properties, as a rule, offer several schemes that allow investors to earn money (guaranteed rental program, Rental pool, hotel management), as well as live a certain number of days a year. Most of the properties located within walking distance of the west coast of Phuket have a hotel license and the possibility of daily rentals, but condominiums in the central part of the island are allowed to be rented out only for a long period. As a rule, these are rental contracts of six months or more, which are less profitable in terms of profitability.
We are often asked the question: what can you buy cheaper, and at the same time make quick and good money on rental and resale? Unfortunately, these are two incompatible requests.
The availability of inexpensive land in central areas of the island, such as Phuket Town and Kathu, allows developers to offer a large number of properties at a minimal price. As a rule, these are condominiums for Thais and local expats, located 20-35 minutes from the beaches, which do not offer a wide variety of infrastructure within the project, a hotel license and rental programs. Apartments in such properties are mainly purchased for personal residence, and rental demand is very limited due to the relatively small number of expats compared to the number of tourists on the island. Prices in new buildings in the Kathu and Phuket Town areas start from 1.8 million baht for a studio of 30 sq.m. The average rental price for an annual contract is 8,000 baht per month, which is significantly lower than in the tourist areas of the west coast, as well as the increase in prices during the construction period, and the resale of such an apartment will be very difficult.
More than 70% of Phuket’s territory is occupied by national parks, wooded hills and agricultural land, where residential development is prohibited by law, and only 15% of the island is reserved for residential property development.
The east coast is less in demand for investment, since the area’s infrastructure is poorly developed, and the sea is not suitable for swimming due to strong tides and a rocky bottom.
The location of the property close to the west coast of Phuket is the main guarantee of investment success. The developed tourist infrastructure of the western beaches (five-star hotels, wellness centers, golf courses, beach clubs, boutiques and gourmet restaurants) attracts a wealthier crowd, which ensures higher demand and higher rental prices.
West Coast areas also vary in infrastructure. For example, property on Mai Khao and Patong beaches will not bring much return on investment. Of much greater interest are beaches such as Kata and Karon, Nai Harn Beach, as well as real estate in the elite areas of Bangtao and Kamala. Therefore, be sure to pay special attention when choosing the location of the object. Our Sino-Thai agency team will be happy to answer all your questions and help you choose the most profitable properties for investment and living on the island of Phuket.