Buying a studio apartment in Thailand is an important process that requires financial preparation and study of the distinctive features of the property type. To make the right decision, it is worth considering all the pros and cons of purchasing a studio apartment in Thailand.
Content:
Advantages of buying a studio in Thailand
A studio apartment is a low-budget, open-plan, one-bedroom apartment with no internal walls other than partitions separating a toilet, bathroom or shower.
The pros of purchasing a studio apartment in Thailand are:
Cost and utilities
A studio apartment in Thailand on average costs approximately 30% less than a 1-bedroom apartment. The reason is quite simple: studio apartments have a smaller area which ranges from 23 to 40 square metres. For example, prices for studio apartments with an area of approximately 30 square metres, in a new local development, start at an average of $100,000 and for 1-bedroom apartments from $130,000.
Studio apartments in Thailand are located in condominiums (apartment buildings, condos) with central utilities. The total monthly running costs are $70-80. This amount can easily be recouped in 1-2 days of rental income and the annual maintenance of the apartment can be recouped in a couple of weeks of tenant residence. A studio apartment owner pays only for their apartment. The management company, to which the owners pay an annual fee, is responsible for maintaining the living conditions in the condominium such as landscaping, caring for the adjacent territory, cleaning inside the building and solving problems with the water supply, etc.
Area and layout
In Thailand, studio apartments with an area of 23 square metres are common. In most cases, the layout of the studio apartments includes a built-in kitchen, a living room and a bedroom combined into one common space, as well as one bathroom and a toilet. The size and layout of the studio will be ideal for those who love minimalism and cleanliness as it is very easy to restore and maintain order in a small space.
Maintaining and amenities
If the buyer doesn’t live in Thailand, the condo management company will take care of all the studio apartment maintenance. The management company will pay utility bills, and monitor the cleaning and changing of linen after occupancy as well as other matters.
When owning a studio apartment in Thailand, the common amenities for condo residents most often include a gym, laundry facilities, parking, a swimming pool, a sauna, garden areas, a concierge service, 24/7 security and video surveillance. The mail is delivered to your apartment and parcels from courier companies are retrieved by staff of themanagement company.
Location
Studio apartments in residential complexes in Thailand are almost always located in areas with well-developed infrastructure. Within walking distance, there are shopping malls, numerous stores, restaurants, cafes, metro stations and bus stops. From such condos, it is convenient to get to major city attractions and workspaces.
High ROI
Buying a studio apartment in Pattaya, Bangkok or Phuket, the three most popular locations for long-term tenants and tourists in Thailand has proven to be a profitable investment that generates a stable recurring income. Studio apartments can be successfully rented out at any time of the year. The rental market in Thailand is very active and studio apartments can be rented for both long and short-term but at a higher price. Thanks to the year-round flow of tourists and favourable climate, the demand for studio apartments in Thailand is steady. In popular resorts and the capital, the average payback rate for this type of housing can reach 8 to 10% per annum.
Disadvantages of buying a studio in Thailand
Despite the significant advantages, buying a studio apartment in Thailand has its drawbacks. There are only a few of them but let’s list the key ones:
Accomodation rules
Potential buyers with pets shouldn’t consider purchasing a studio apartment in Thailand for their residence. Most apartment buildings do not provide accommodation for animals. It is also not permissible to leave personal items in public areas, such as bicycles, baby carriages and other items usually displayed by residents on stairs and porches.
Renting a studio in Thailand
Before you buy a studio in Thailand for its subsequent rental, tou would need to study the existing lease agreement for the property, if any. It is possible that the previous owner of the studio entered into a guaranteed rental agreement which would necessitate that for a certain period of time the management company engaged in the rental of that property would need to stick to the terms specified in the contract.
Difficulties in getting a loan
In Thailand, it is difficult for non-residents to purchase a studio apartment with a mortgage. Local banks very rarely issue mortgage loans for non-residents. Currently, mortgage loans are issued mostly to residents and rare foreign public sector workers.
Ownership percentage for foreigners
In Thailand, foreigners can only own 49% of the property in an apartment building. Therefore, a situation may arise when a buyer wants to purchase a studio apartment but will be refused since the quota for foreign ownership in the building has already been filled. However, foreigners have access to a wide range of offers at the initial stage of development.
Residence permit when purchasing real estate in Thailand
Foreigners can purchase a studio apartment in any of the country’s regions but it should be noted that property ownership doesn’t give the owner the right to obtain citizenship or a residence permit in Thailand.
Conclusions
Buying a studio apartment in Thailand can be a good option both for your residence and in terms of long-term investment, for subsequent resale or rental. In Thailand, it is easiest to buy a studio apartment in Pattaya or Bangkok and while Phuket Island is popular with tourists, there are fewer apartments available than on the mainland. Bangkok is home to a large number of international companies and embassies so there is always a demand for small-area properties for foreign employees of companies and representative offices.
When deciding whether a studio apartment is right for you it is important that you first decide the purpose of the real estate unit after which you can choose the region of the country that appeals to you.