Holiday rental in Pattaya: how to invest?
Holiday rental in Pattaya is a great way to generate additional incomes ! Indeed, with more than 16 million visitors in 2017 and the wish to exceed 19 million visitors by the end of this year, Pattaya is one of the most visited destinations in the world, ahead of several heavyweights like Barcelona , Milan or Bali.
With the rise of apartment booking platforms such as airbnb, booking.com or agoda, visitor habits have changed a lot in recent years and most people now prefer to feel “at home” by renting an apartment or a hotel residence.
Investing in properties that answer this rental demand is a good way to capitalize on this massive influx of tourists from all over the world by generating much higher yields than back home thanks to the combination of several factors such as strong rental demand, low costs and fees or a very soft tax system.
Define your expectations and possibilities
When planning to purchase a property, it is important to first define your expectations and needs by asking yourself several questions, for example:
- What type of property am I looking for? A studio, a one-bedroom apartment, …?
- Do I want to use the apartment a few days / weeks per year?
- Are there one or more locations I am interested in?
- Do I want to receive my rental income in Thailand or abroad, in what currency?
- Do I want to receive my rental income every month, quarter, semester, etc?
It is also very important to clearly define your financial status, for example “how much do I want to invest?”, “How much do I have now?”, “Do I need an installment plan for the payment allowing me to spread the purchase over several months or years? “, etc.
Defining your expectations, needs and possibilities will allow you to naturally refine your real estate project, it will automatically exclude certain properties, and on the contrary, will bring out others.
Hunt for information before
It is important to search for information about the country, the city itself (number of tourists, economic stability, available and future infrastructures, etc.) or the real estate offer that is present to understand the rental potential of the destination itself and to get an idea of the purchasing process or the related legal framework. It can also help you identify one or more properties that might meet your expectations.
Read also: why to invest in Pattaya?
Beware of false information!
It is also important to be very careful about what can be said or social networks or other forums. Indeed it is common to find incomplete or even incorrect information. For example, it is not uncommon to read that a foreigner can not own property in Thailand, or that he can only hold 49% of the property, which is totally false.
Invest in holiday rental via hotel residences: the turnkey solution
Hotel residences are residential programs offering hotel services. This type of residence is very popular especially in the tourist destinations of the Kingdom. Indeed, investors can buy an apartment or villa in a residence managed by professionals who are in charge of all day-to-day management (reservations, concierge, reception, cleaning and maintenance …).
The pooling and standardization of services makes it possible to reduce management costs, optimize filling rates and rental rates, and thus obtain better rental yields, which are often even guaranteed by contract over a given period.
The professionalization of managers and the arrival of large chains in this niche also contribute to the development of this concept. As good management is a key issue in the valuation of the property, the investor here enjoys recurring rental income and an appreciation of its assets. In some cases, you can even benefit from a buyback guarantee with a capital gain.
The expertise of the management, the relevance of the chosen location, the adequacy between the services offered by the residence with the type of clientele targeted are factors to take into account during this type of acquisition.
The combination of these factors combined with the Kingdom’s culture of hospitality, its tourist dynamism (more than 30 million visitors each year) and the quality / price / benefits ratio of its real estate market, makes Thailand the ideal country for this type of properties.
To sum up, investing in holiday rental via a hotel residence allows you to:
- Capitalize on very short-term stays (daily rates) offering a better return.
- Rental incomes guaranteed by contract, whether the apartment is occupied or not (between 6 and 10% depending on the property), for periods ranging from 3 to 20 years.
- An assured resale of the property with capital appreciation, up to 140% of the purchasing price.
- Some developers offer the opportunity to use the apartment a few days / weeks a year.
- Some developers offer a system of “cash-back”, allowing you to generate income immediately, even during the construction of the residence.
A few examples in Pattaya:
- The River, offering an 8% rental guarantee per year during 5 years with a 110% buyback guarantee.
- Mira offering, offering a 6% rental guarantee per year during 3 years, which will be managed by the Wyndham Group, world leader in hotel management.
Invest in holiday rental via traditional residences: a greater flexibility
When we talk about traditional residences, we mean residences such as those we can find back home, namely a condominium building with common areas and additional services. You can buy an apartment in such a residence then rent it out by yourself or through a real estate agency.
This type of residence offers several advantages: they are more numerous than hotel residences so there is a wider choice for you; they also offer more flexibility, allowing you to use the property if it is not rented, or to stop renting it and come and live there permanently if you wish; they can generate excellent rental income because you are the one who decide how much you want to rent it out; it is possible to find very good deals for the purchase (eg. an urgent resale) and the negotiation margin is generally higher; etc.
To sum up, investing in holiday rental via a traditional residence allows you to:
- Have a large selection of goods available.
- Great flexibility.
- The possibility of finding very good deals.
- The possibility of generating very good rental yields.
A few examples of residences in Pattaya:
Surround yourself with a recognized and experienced agent
It is essential to surround yourself with a recognized agent with great experience in the business. Indeed, even if purchasing a property in Thailand is relatively simple and very secure, to appeal to a real estate agency is a pledge of security that will avoid you some difficulties:
- The agent offers a selection of properties that meet your expectations so that you can make your choice.
- He will run a full range of tests and verification to ensure the project, the developer and the property are serious and the purchase is secure.
- He will negotiate the best prices and conditions for you.
- He advises you to make the best choice according to your profile and your needs.
- He accompanies you all along the process and even after (opening of bank account, management of the property, etc.).
- He speaks your language ! Which is always reassuring when we consider a real estate purchase in a foreign country.
Moreover, in Thailand, the agency fees are paid by the seller, so do not hesitate!
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