In Phuket, condos are an increasingly popular investment for foreign buyers. This is the case for several reasons including: a foreigner can own a condo in their name, a lower barrier of entry to ownership, and easier to maintain than a house or villa. Nowadays there are more options than ever for a wide variety of locations and price points. While there are certainly people who buy a condo to live in themselves, purchasing with the intent of renting is on the mind of many buyers. If you’re of a similar mind, then read on for advice on things to keep in mind when shopping for a condo in Phuket.

Location  

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It might seem obvious beyond the point of discussion, but there are a few details worth exploring. Sure, buying a spacious condo with quality management in a busy tourist area near the beach may be the best approach. However, these types of properties aren’t always readily available or fall within your budget. This approach is also based on a holiday rental concept when, in fact, there is increasing demand for long-term rentals. Being close to the beach is certainly always a benefit, but those who live and work in Phuket often don’t mind being outside of the busy tourist areas and closer to practical amenities. 

There are many condominium projects underway with the possibility of buying off-plan at a discount. Taking the time to research the island’s neighborhoods can give you an idea of the growth potential as well. There is a lot of development in Phuket and understanding these projects can give you a glimpse of how your investment may fare in the long run. 

Legal Considerations 

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One of the first questions to ask when interested in a condo is whether or not you are actually allowed to engage in the type of business you have envisioned. There are regulations surrounding condo rentals both from the government and the project itself. Short-term or holiday rentals may simply not be permitted by a project’s management. Of course, this is something you want to know before even considering making a purchase. 

Property Management Options

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When buying a condo to rent, you have to think about two management situations: that of the general management of the building and grounds, and the management of your specific rental unit. When finding a condo you’re interested in, a property lawyer will carry out the due diligence and, among other things, will look into the project’s management team. 

Some buildings may offer to manage the rental of your unit. Otherwise, hiring a third-party company, of which there are a variety, will be the other option. You’ll find some may offer basic services while others will do everything from taking photos, listing your property, and managing bookings, to providing in-person support, cleaning, and laundry service. 

Return on Investment (ROI)

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For those who plan on buying a condo specifically for rental income, crunching the numbers on the return on investment is a crucial piece of the puzzle. The ROI takes into account the purchase price of the condo, expected appreciation/depreciation, estimated costs of management, maintenance, and insurance, weighed against the estimated rental income. This will give you an idea of how long it will take to recoup your investment and start profiting. Remember that the ROI is an estimate with many variables which can affect it like seasonal fluctuations in rental rates and geopolitical issues that can affect travel or the ability to work remotely.