Thailand is seeing a rise in the number of large developments especially in the main tourist cities such as Bangkok, Phuket, Hua Hin, and Pattaya due to an increase in the number of foreign investors in the past 10 years.
What does off-plan investment mean?
Making an off-plan investment means committing to buying a property before it finishes being built or purchasing a property that is yet to be built. Investors often rely on the architectural plan and guides or if you’re lucky, you might be able to see a show unit that is available for inspection. Buying off-plan in Thailand can be extremely profitable or risky. Let’s have a look at some of these considerations before investing in an off-plan property.
Advantages of buying an off-plan
1. Future investment opportunities
A huge benefit is that you are buying at a below market value or in other words – discounted price. Developers often want a solid launch and strong sale based during the start and therefore are more willing to offer a highly discounted price to early investors. Properties grow up in value with time therefore this allows investors to then resell the property at a profitable level with a high margin once the development is completed.
2. Extended payment terms
When buying an off-plan property, payments are often made into installments of smaller amounts or deposits (usually between 1-3 years) as the development is yet to be completed. This gives investors more time to prepare for the necessary funds and lessens the burden of a one-time payment.
3. Flexibility to customize your unit
Buying an off-plan means you have the freedom to customize your room to suit your style and personality. This could include furnishings, finishings, appliances, and interior designs.
4. A larger pool of selections
Being an early bird gives you the chance to choose the units, floors, and floorplans that you prefer rather than choosing from the remaining units. You might have a chance to choose a corner unit on the top floors with a beautiful view of the city.
Risk of buying an off-plan
1. Non Completion
This is probably the highest risk of buying an off-plan property. This can happen due to a number of reasons such as lack of sales and capital to complete the project, economic downturn, or even construction mismanagement. Despite the promises, some developments do go wrong however, there is now a Condominium Act that was recently passed to offer buyers protection and to ensure buyers are given what they have been promised. Make sure that you consult an agent before committing to anything.
2. Not meeting the expectations
Because you are simply relying on a piece of paper with a project plan or a showroom, the end product may not be as promised or as you expected. Developers could have over-promised.
3. Extra costs
Remember that there are extra costs to consider once the project is completed. This may include the costs of extra furnishings and decorations of the room if you have purchased a bare-shell. There will also be the cost of transferring ownership from the Developer to the buyer, and lastly, don’t forget the building management cost.
Buying Process
Step 1: Choose your unit
Step 2: Unit Booking – Make a deposit in order to confirm the reservation of the unit
Step 3: Sign the Property Purchase Agreement and pay the fees
Step 4: Installments will be scheduled and you must pay in time
Step 5: Final payment is made typically once the project is completed
What to ask when reviewing an off-plan project
This is extremely important if you are looking at purchasing for future investment opportunities. There are certain factors that you should consider before making a purchase.
1. Location – Where the project is located, convenience and attractions around the property such as access to transportation, shopping malls, hospitals, and restaurants
2. Facilities and amenities of the project + maintenance
3. Price/square meter as compared to other projects around the area
4. The reputation of the developer, make sure they are trustworthy. Check their sales record from the previous projects
5. Make sure you ask about the refund clause and understand the terms and conditions in the case of a delay of the project completion date
6. It is recommended that you consult with a real estate agent before signing any agreement
How to find the best opportunity
The best suggestion is to consult an agent! Local knowledge can help you find the best opportunities and may result in huge capital gains on your behalf. Make sure you prioritize your objectives and communicate your needs to a local expert.
How to negotiate the best offer
Negotiation isn’t always simple but is worth trying! Developers often offer discounts during pre-sales (about 1-5%) in order to have a strong launch therefore it is recommended to try. You can also ask for top offers such as free furniture, amenities, transfer fees or extra discount on bulk purchases
Where to find New Launches
Follow our blogs at www.lazudi.com to receive updates on the latest project developments in Thailand
Final Tips
Buying off-plan property in Thailand is exciting and has its benefits especially with the rise in the number of luxury developments in Thailand’s major cities. However, it is recommended for you to consider consulting an agent to help you through the process all the way from searching for a trustworthy developer to transferring ownership of the property. For more information contact www.lazudi.com where you can find expert advice on purchasing off-plan properties in Thailand.
