Phuket is rapidly developing as a real estate investment hub, offering much more than just a holiday on picturesque beaches. More and more people are considering this Thai island not only as a holiday destination, but also as a platform for profitable investments in residential real estate. Let's figure out why the resort attracts investors and what to consider when buying.
Why Invest in Phuket Property
Today's Phuket attracts not only with its natural beauty, but also with its modern world-class infrastructure. The island boasts quality shopping centers, restaurants, sports areas and an excellent healthcare system. Low crime rates and a comfortable environment make it an ideal place for both families with children and retirees.
Advantages of investing:
- Popular for tourist trips. Every year it receives millions of guests, which provides increased demand for rental housing. In 2024, 14 million people visited the exotic paradise, and the tourist flow continues to grow.
- Variety of options. Studios, apartments, villas are offered – for any budget and purpose: vacation, rent, investment.
- Affordable prices. Compared to other resorts, houses are cheaper, but they are constantly becoming more expensive. In 2024, prices increased by 27%, and experts predict further growth.
- Rental income. On average – 7-10% per annum. Competent management allows you to receive a stable passive income.
- Possibility of personal use. Owners not only rent out premises, but also come to relax at any time.
- Capital investment in construction. Payment at the construction stage allows you to fix the price, and by the time of delivery the object may become more expensive. Developers offer flexible payment terms.
- Economic stability. Thailand has shown strong GDP growth and low inflation, and the baht remains stable.
- Legal guarantees. If the share of foreign owners in a condominium is no higher than 49% of the projected area of the building, then foreigners can become owners of the premises, as well as acquire land through long-term lease.
The best properties in Phuket!
Common Misconceptions About Buying Property
Myths and reality:
- Myth #1 – Foreigners are prohibited from owning real estate in Thailand.
- Reality – In practice, the law allows foreign buyers to own apartments in residential complexes, provided that foreigners may own no more than 49% of the total area of the condominium.
- There are also long-term lease schemes and the creation of companies to acquire land.
- Myth #2 – Buying property in Thailand is a complicated and risky process.
Reality – With the right approach and cooperation with experienced agents and lawyers, the process becomes transparent and safe. It is necessary to carefully check the documents and give preference only to reliable developers.
Potential risks when investing
The investment can be profitable, but it is necessary to take into account possible problems in order to avoid unpleasant surprises:
- High competition in renting. Every year more and more properties appear on the market, so in order to constantly make a profit, you need to choose the right home and think through a rental strategy.
- Economic instability: Crises, pandemics and natural disasters can temporarily reduce demand and affect property values.
- Difficulties with management. If the owner does not plan to do it himself, he will have to hire a management company, which will increase expenses.
- Risks in a transaction at the construction stage. Delays, changes in conditions or even freezing of the project are possible if the developer encounters difficulties.
- Developer's reputation. There are unscrupulous companies on the market, so before a deal, it is worth carefully checking the developer's reputation.
- Verification of documents. Check the legal status, absence of encumbrances and debts. It is recommended to involve an independent legal consultant to verify the documents.
Understanding these factors will help minimize risks and make a more informed investment.
Freehold or leasehold?
- Freehold (full ownership) - can only be issued for apartments in condominiums, but does not apply to land.
- Leasehold – allows foreigners to own land and private homes on a long-term lease basis.
Russians have the opportunity to buy property, but there are certain restrictions. As mentioned above, foreigners, including Russians, have the right to buy premises in condominiums if the share of foreign owners in the building does not exceed 49%. Land plots are available to foreign citizens only through long-term leasehold for up to 90 years.
Russian influence is growing on the island. According to Al Jazeera, more than 400,000 Russians visited Phuket between January and July 2023. This has driven up housing prices and the emergence of Russian-oriented businesses. Thai owners and realtors have benefited, but renters have found it harder to find affordable housing. For more information, see (link) .
How to buy real estate
The acquisition process includes several stages:
- Defining the purpose: personal residence, rental or investment.
- Selecting a suitable area for living, taking into account the infrastructure and convenience of location.
- Contact a reliable agency to select options and negotiate with the seller.
- Conducting a legal audit of the property.
- Preparation and signing of a purchase and sale agreement in compliance with all legal regulations.
- Transfer the remaining amount to Thailand through authorized channels. Foreigners who purchase a condominium require a Foreign Exchange Transaction Form (FETF).
- Registration of ownership rights – to officially recognize your rights, you must go through the registration process with the Land Department, which records the transfer of ownership of the property.
There are various forms of ownership in Thailand.
- Freehold (full ownership) - can only be issued for apartments in condominiums, but does not apply to land.
- Leasehold – allows foreigners to own land and private homes on a long-term lease basis.
A detailed analysis of the purchasing process is available on the page (link) .
What you need to know when choosing a property
Buying a property requires careful and thoughtful consideration. Here are some key steps to help you make the right choice:
- Determine the purpose of the transaction: decide whether you will use the property for permanent residence, rental or as an investment.
- This influences what type of housing to choose and helps to decide on a place to live.
- Choose an area: The resort offers a variety of options, from popular tourist spots like Patong and Karon to secluded spots like Naya Yang. Choose a location that suits your needs in terms of facilities and amenities.
- Consider the types: apartments, studios, villas and townhouses. Each type has special advantages, according to the preferences and goals of the buyer.
- Assess the infrastructure: how close are the beaches, shops, hospital, school, restaurants, clubs, transport accessibility.
Visit properties: Always inspect what you want to buy in person to assess the condition and environment. - Turn to professionals: Using the services of experienced agents will help you anticipate possible risks and simplify the decision-making process.
Buying real estate in Thailand is a long-term investment. So remember that in addition to current amenities, you should also consider the prospects for service development in the chosen area.
Popular areas for buying a home
When determining objects for purchase and sale, consider the characteristics of different areas. Some are suitable for tourists, others - for a quiet life or for making a profit. The main popular regions are:
- Patong is the center of nightlife and entertainment, high incomes for tenants.
- Karon and Kata are ideal areas for family holidays, with convenient infrastructure and picturesque beaches.
- Rawai and Nai Harn are quiet areas that attract expats and those who appreciate nature.
- Bangtao and Surin are luxury developments sought after by wealthy investors.
- Kamala is an elite area known for its luxury villas and top-notch condominiums.
For a detailed analysis of each location with its pros and cons, read the separate article.
Types of real estate
There are a variety of options available here:
- Apartments (condominiums) are the simplest option for foreign citizens, convenient for rent.
- Villas are spacious homes with their own private territory, suitable for long-term stays or premium rentals.
- Townhouses are an alternative to villas, combining the convenience of a private home and the infrastructure of a residential complex.
- Hotel residences – apartments in hotels with management, bring sustainable profit.
- Land plots are only available for rent (leasehold), but they provide the opportunity to build a house for yourself.
The choice depends on financial capabilities, investment goals and projected price growth.
Opportunity to earn money by renting out real estate
On average, the yield varies between 7-10% per annum. But you can get more profit if you choose the property well and manage it skillfully. The following factors influence the yield:
- Location – housing by the sea or in tourist areas is rented out faster and at a higher price.
- Type – apartments are popular among tourists, villas are more often rented for a long term.
- Management – independent management takes time, but reduces costs, and the management company takes a commission, but provides a stable profit.
- Seasonality – in high season (November – April) prices are significantly higher, and in low season demand falls.
Calculate the maintenance costs, taxes and management company fees. A competent choice and professional management allow you to receive an inexhaustible income.
Conclusion
Investing in real estate in Phuket is a promising financial asset that, if approached correctly, can bring both pleasure from living and a profitable income. However, it is important to carefully study the market, take into account legal nuances and contact professionals to support the transaction.
Key points to remember:
- Foreigners have the right to own apartments in condominiums and to enter into long-term land leases.
- It is necessary to carefully check the reputation of developers, documents and understand all aspects of the local market.
- The choice of location, property class and management method affects the return on assets.
If you are considering purchasing real estate, study the market in more detail and contact trusted specialists who will help you avoid risks and choose the best option.