Real estate in Thailand is a potentially profitable asset that can be equally interesting to both end users and investors. You can purchase an apartment in Thailand for personal residence or to generate rental income. One way or another, the key factor for making a profitable deal is the price. Let’s see what advantages buying a Thai property during the low season offers.
Content:
- Why is renting/buying a property during the low season a good idea?
- Current state of the Thai market
- Profit for investors: passive, moderate, and aggressive strategies
- Advantages of buying property during the off-season
- We will help you buy real estate in Thailand!
Why is renting/buying a property during the low season a good idea?
Prices for residential properties in the kingdom can fluctuate greatly depending on the time of year, sometimes being two or more times lower than peak values. Most often, the decline in prices falls on the low season when the tourist traffic into the country is not so high and the demand for housing is dwindling. In Thailand, this period lasts from mid-summer to early autumn. According to experts, this is the best time to buy real estate.
If you want to have a holiday in a quiet environment while keeping expenses to a minimum, also plan a trip for the low season: this way you will have a higher chance of finding attractive rental options at a low price.
Current state of the Thai market
As of May 1, 2023, the level of private investment in the real estate sector is consistently high. According to experts, it normally begins to grow in autumn, after the rainy season in June-August. Therefore, summer is the best time to make a purchase. In recent years, the average annual price growth in the real estate market in Thailand has been 1.5–2% per annum. However, in popular tourist locations such as Bangkok, Phuket, and Pattaya, the average annual growth in the cost of apartments has been 4–5% per annum. In non-tourist places, price increases are more moderate.
Profit for investors: passive, moderate, and aggressive strategies
Passive strategy
As far as return on investment is concerned, rental income can be expected to generate a 7–8% return when considering EBITDA (earnings before interest, taxes, depreciation, and amortisation). In Thailand, income tax is from 3 to 15%, and when taking into account the rise in prices in the market, the payback period of investments will be an average of 9–10 years.
These are good figures that suit entrepreneurs who are interested in passive income.
Moderate strategy
The most investment-attractive properties in the Thai market are land plots. Although by law only long-term lease is available to foreigners, it is possible to purchase land in the name of a legal entity. This will allow you to have direct ownership of the land and reduce investment risks. Despite the additional complexity of executing transactions, this asset is perfect for a moderate strategy. Last year, the minimum growth in the cost of land plots in Bangkok was 13% per annum; in Phuket, 16.5%; and in Pattaya, 15.7%.
Aggressive strategy
An aggressive strategy is investing in developments in all major cities and tourist locations, including absolutely all types of real estate. In this case, the properties at the ‘finished carcass’ stage are optimal for purchase. Such investments bring up to 15–20% per annum.
Advantages of buying property during the off-season
Buyers and investors who enter deals during the low season, in addition to lower prices, benefit from the following:
- When choosing housing during the low season, you get the opportunity to enjoy all the benefits of a holiday in Thailand with a minimum of tourists and fuss. You can view any property you like at ease, assess the neighbourhood and infrastructure, visit sights, and breathe in the sea air.
- Property transactions, whether it be rent or purchase, are a responsible undertaking that requires not only serious capital investments but also thorough research of the market. During the low season, you have a great opportunity to get acquainted with all the offers available on the market, check the real estate documents, and prepare the necessary paperwork to complete the transaction without haste.
- If you are considering the secondary market, then the buyer has access to more offers as tenants move out of rentals. It is also much easier to arrange showings at this time without disturbing tenants.
- During the low season, you are more likely to check the property for resistance to climate change and weather conditions. You can evaluate the quality of housing and whether you will feel comfortable in it throughout the year: test the degree of protection against heat, moisture, and drafts, and check the operation of the climate system.
- If you decide to buy an apartment or villa in Thailand during the off-season, owners and a real estate agent will have more time to work with you, they will be more attentive and more willing to accommodate your request.
It is worth noting that the seasonality of the market in Thailand varies from province to province. It is important to look into how seasonal trends affect the housing market in a specific region.
We will help you buy real estate in Thailand!
Make your search for property in Thailand as efficient as possible with Thailand-Real.Estate! The website features verified real estate offers from leading developers of the market in the kingdom’s most popular areas. Search and filter properties by key parameters and price in the currency you are interested in.
If you are interested in buying real estate in Thailand online, Thailand-Real.Estate managers will tell you how to make a profitable and safe purchase, and arrange an online viewing of the property. If you need more information about the market or professional guidance, just leave a request on the website, and our manager will promptly contact you!