If you asked a tourist, who has been to Thailand whether they would want to buy property there, most of them would tell you they had considered purchasing real estate there. There are many reasons to want to purchase property in this tropical paradise. Whether it is a vague notion that you have had or something you have given a lot of thought, the idea is enticing. However, can foreigners buy property in Thailand? Being home to a rich culture and friendly people, the country has something to offer everyone. If you are thinking of buying property in the country, read on to uncover some facts and how property investment in Thailand for foreigners works. There are some unusably Thai rules that you will need to be conversant with if you want your property purchase to be flawless.
Buying Property in Thailand as a Foreigner
According to Thai laws, a foreigner is not allowed to own land. If a foreigner is seriously thinking of getting property in the country, they have two options. One option is to lease land there for 30 years. If you choose this option, you have to ensure that all the information is correct. For instance, ensure that the property has a genuine title.
The other option you can use is to set up a limited company in Thailand. If you choose this option, beware that a foreigner cannot own more than half of a limited company. Thus, you have to look for a Thai citizen who will own 51% of the company. However, if you are US citizen, this does not apply to you. They have a treaty with Thailand, which allows its citizens to have full ownership. The Thai citizen can still sign over ownership to you. However, the immigration officials have to be notified, and they will monitor your business keenly.
Buying a house in Thailand as a foreigner
When looking to buy a house in Thailand, you have to ensure your investment will be sound. In recent years, property prices in Bangkok have shot up. This has led to a hands-off approach by the government. Even the best developers can sometimes do sub-par jobs. Sometimes, you may buy a house that later experiences leaks and crumbling walls. You have to do a bit of legwork and get in touch with others who have purchased the property. Ensure that the house meets high standards before you make a purchase.
Buying a condo in Thailand as a foreigner
Since there are so many restrictions on owning land, most people choose to purchase a condominium. The law allows a foreigner to outright purchase a condominium 100%. It is one of the easiest and most uncomplicated ways to own property in the country. According to the 1979 Thailand Condominium Act, a foreigner can own a 100% of the condo as long as the building is owned 51% by a Thai citizen. Thus, in Thailand, 49% of the units are usually designated for sale to anyone. In Bangkok, about 20% of all condos are owned by foreign residents or investors in the country.
Thailand Real Estate Investment Tips
If you are thinking of a property investment in Thailand, there are a few tips that can help to make things easy. Here are the top five tips you should consider.
1. Always Appoint a Lawyer
This is one of the most crucial decisions for foreigners considering a Bangkok property investment. When choosing a lawyer, conduct your own research and not just accept the first recommendation you get. The wrong choice of a lawyer can cost you the opportunity to purchase property and your money.
Choose a lawyer that understand you and who will guide you effortlessly through the purchase process. The right lawyer should be one that easily breaks down the options that you have. He or she should explain to you about property and land taxes, which will help you budget for your purchase.
2. Never Settle For Less Than You Desire
A real estate investment is a big decision, no matter where you are investing. If you are considering a Phuket property investment, take time to conduct your research. It may take some time, but you eventually find one that fits the bill.
One thing you need to consider is location. The property should be within easy reach of all amenities such as public transport, laundromats, restaurants, and much more. You should also look for streets with a uniform streetscape. Streets with a mixture of building styles are usually low value.
Of course, your budget will also play a huge role in the kind of property you get. Do not just consider what you have in the bank. Consider your cash reserves after the purchase. Life is prone to major upheavals. Think about what would happen if conditions suddenly changed.
3. Assess How Viable Your Invest Will Be
Just because you have the money to invest in a property does not mean it will give you the return you desire. You need to ensure that your Pattaya property investment is viable in the long term. To do this, you can study capital growth in the area and asses similar properties in the area. You may also wish to consult a financial advisor in Bangkok.
4. Always Make a Counteroffer and Dig in for Negotiations
Just because you are a foreigner, does not mean you have to accept the asking prices. If you are serious about making a return on your investment, you have to make a counteroffer and dig in for negotiations.
Always have a calm business-like demeanor during the negotiations; it always works out for the best. Ensure that you keep your emotions a bay. Do not let the agent or owner know how badly you want the property. It gives them leverage to sell you at the highest price. Besides that, always ask for a discount. In some cases, you may get a discount of as high as 10%.
5. Have a Water Tight Reservation Agreement
When you agree on a purchase price, the agent or owner will want a reservation fee as you agree on the finer details. For older properties, you may not want to pay this fee as the property may fail your due diligence checks.
However, the agent may sell the property within the two or three weeks that you perform your due diligence. In such a case, you may have lost the property and still have to pay the legal fees to your lawyer. Have an agreement that states you will be refunded your reservation fee if the property does not meet your quality checks.
These are just some of the things to think about if you are serious about acquiring property in Thailand. You should also talk to friends and ask them for extra tips if they have purchased property in the country. It is also recommended that you use a reputable property company for the purchase.
At Thailand Property Advisor, we are highly knowledgeable about all aspects of property in Thailand. But, if we don’t know something, we will find out and keep researching until we’re convinced that we can stake our reputation on our answer. Contact us and we can begin to discuss your options.