Real estate investment in Thailand?

[manarak]

Looking at real estate offers, I wondered if real estate is a good investment ?

- are foreigners living abroad allowed to own/buy real estate in Thailand (Buildings or condos - I know that ground property is not possbile)

- how is the real estate market currently? what are good sources of info about the thai real estate business (websites)?

- what is the average return on real estate in good spots? What's the revenue part and what is the value increase part?

- what is the taxation of real estate revenues in Thailand?

- is it possible to have one's real estate portfolio managed by a local agency? (i.e. the agency cares for all administrative work, and the owner gets the remaining balance of rental amounts)

Thank you for your insights

[katoeylover]

I believe Farang can buy some condos, but not houses, they have to put through a nominated company of which you can own 49%.

Am sure someone will confirm this, but also look at Thaivisa.com where there is a lot of threads on this subject

[mardhi]

(manarak @ Jul. 18 2008,04:08) Looking at real estate offers, I wondered if real estate is a good investment ?

- are foreigners living abroad allowed to own/buy real estate in Thailand (Buildings or condos - I know that ground property is not possbile)

Can own condo (up to 49% limit for foreign ownership - money must come in from abroad and be specifically for that purchase (i.e cannot send money in and then just use it to buy a condo - the transfer must reference the property title deed or similar proof).

Can own house, but not the land it sits on inyour name. You can securely lease land - buying land is not suggested these days unless the company that owns is really trading.

- how is the real estate market currently? what are good sources of info about the thai real estate business (websites)?

Condo market in BKK is struggling at mid-high end - super luxury seems to be OK - but most sold off plan a few years ago. Pattaya is struggling house wise unless its very cheap and then tends to go in Thai name and people take the risk. Company ownership still the most popular for large value property. Condo market in Pattaya seems to be doing well in the right locations.

- what is the average return on real estate in good spots? What's the revenue part and what is the value increase part?

Impossible to say without being more specific - the trend is upward and rent levels are generally low but there are exceptions to that.

- what is the taxation of real estate revenues in Thailand?

Various transfer taxes but many have been reduced. No property tax/rates.

Rent income from property is 12.5% of either rental amount or what the local authority appraise the property to be generating rent wise.

In addition, you pay Thai income tax on the rent as well unless your not Tax resident.

- is it possible to have one's real estate portfolio managed by a local agency? (i.e. the agency cares for all administrative work, and the owner gets the remaining balance of rental amounts)

Yes but dont expect good service.

Thank you for your insights

are foreigners living abroad allowed to own/buy real estate in Thailand (Buildings or condos - I know that ground property is not possbile)

Can own condo (up to 49% limit for foreign ownership - money must come in from abroad and be specifically for that purchase (i.e cannot send money in and then just use it to buy a condo - the transfer must reference the property title deed or similar proof).

Can own house, but not the land it sits on in your name. You can securely lease land - buying land is not suggested these days unless the company that owns is really trading.

- how is the real estate market currently? what are good sources of info about the thai real estate business (websites)?

Condo market in BKK is struggling at mid-high end - super luxury seems to be OK - but most sold off plan a few years ago. Pattaya is struggling house wise unless its very cheap and then tends to go in Thai name and people take the risk. Company ownership still the most popular for large value property. Condo market in Pattaya seems to be doing well in the right locations.


In terms of websites it depends where your looking - there is no national chain of any repute.

- what is the average return on real estate in good spots? What's the revenue part and what is the value increase part?

Impossible to say without being more specific - the trend is upward and rent levels are generally low but there are exceptions to that.

- what is the taxation of real estate revenues in Thailand?

Various transfer taxes but many have been reduced. No property tax/rates.

Rent income from property is 12.5% of either rental amount or what the local authority appraise the property to be generating rent wise.

In addition, you pay Thai income tax on the rent as well unless your not Tax resident.

- is it possible to have one's real estate portfolio managed by a local agency? (i.e. the agency cares for all administrative work, and the owner gets the remaining balance of rental amounts)

Yes but dont expect good service.

Thank you for your insights

[SukhumvitRoad]

Assuming we're talking here about individuals dealing in residential property and not major commercial transactions, three observations come to mind which may be of use to you:

1. Someone above suggested you look to Thaivisa.com for threads on this subject. My view is that you do that at considerable risk. A bigger collection of offensive idiots and ignorant blowhards exists nowhere on the internet, and that's saying something.

2. The problem with the real estate market in Thailand, on the whole, is that there is no real estate market in Thailand, at least not in the sense that any westerner understands that expression to mean. There is no multiple listing service for residential real estate, there is no data available to establish comparable pricing in prior sales, and agents are largely lazy and just plain stupid. When you put a residential property 'on the market,' there is no way of reaching the market. You list it with an agent and hope he happens to run into someone who wants to buy it. Or you call your friends and ask if they want to buy it. That's about it. Truly. There is absolutely no cooperation among agents in marketing properties, which makes it unlikely that your agent will inform anyone about the availability of your property except his own clients (if he has any, which isn't all that likely either). On the contrary, your agents will probably try to kill a deal if there is any chance he will have to share the commission with anyone. This is the kind of Thai business logic you will face with your real estate agent: 3% of nothing is worth more than 1.5% of tens of millions of baht.

3. Probably most important of all, a Thai will seldom if ever buy residential property that anyone has ever lived in before. The first time I thought about selling an apartment that we own here, I approached a very large Thai-owned agency and was told something that left me slack-jawed: "Not interested in selling since no one want buy used property." I laughed, but then subsequently discovered that the reasoning was absolutely on the button as far as Thai buyers go. As a result, the market for almost any 'used property' in Thailand is limited to foreigners and, unless the property is very cheap, that's an extraordinarily tiny market. If you could even reach it to make the availability of your property generally known. Which you can't.