Potential buyers of property in Thailand must be confident in their legal rights to the property being purchased, so they should study the main difference between a condo and an apartment before deciding to invest. In this post, we will look at the specifics of these types of housing and the features of local legislation that foreign investors should be clued up on.
- Apartment meaning
- What is a condominium?
- Condo vs apartment: differences in ownership and maintenance
- Service and utilities
- Advantages and disadvantages of both housing options
- How to choose between an apartment and a condo?
- Conclusion: your choice depends on your goals
The concept of an apartment and a condominium seem to be very similar, therefore they have become interchangeable over the years. This confuses potential buyers because, in practice, how an apartment differs from a condo in Thailand directly depends on legal regulation.
Multifamily buildings are usually owned by a real estate development corporation or an individual owner. The landlord owns the building, and the apartments are rented under a rental agreement. Tenants have no right of ownership or joint ownership of the housing or common areas.
Owners of apartment buildings are responsible for management. Simultaneously, tenants must follow the rules of residence which may be associated with certain restrictions, such as a ban on owning pets. Since apartment buildings are not registered under the Condominium Law, they are subject to housing and land taxes. Ownership of the apartment is under a lease for a fixed period which cannot exceed 90 years and ends on the death of the tenant.
What is a condo? A condominium is a separate residential unit within a complex and can be either high-rise or low-rise. The main difference between a condominium and an apartment is ownership. Condominiums are registered with the Department of Land Resources and are offered with outright ownership to individuals while apartment buildings are leased.
Condos licensed by the Department of Land Management provide shared use of common areas, such as a pool or deck, and management of the building by all unit owners.
It is important to consider that foreigners can own no more than 49% of the residential space within one complex. This rule applies to both finished and off-plan housing. Therefore, the easiest way to buy an apartment in Thailand is at the start of sales, while there is still a choice of properties available for expats.
Co-ownership of a residential unit within a complex means that the owner must directly contribute to the costs of maintaining the property. A group of condominium owners called a homeowners association will collect annual membership dues. All important decisions regarding building management are made collectively. Condo owners are required to attend meetings and voice their opinions regarding the association's concerns regarding building maintenance, refuse removal and other issues.
Apartment tenants do not participate in the management of the complex, which, on the one hand, is convenient. However strict rules for the use of real estate can harm the quality of life. For example, the owner of a condominium in Thailand can make any constructive design changes within their property, but the owner of an apartment cannot make any changes at their own discretion.
The level of service directly depends on how many additional amenities the residential complex has. Here are several basic points regarding service and utility bills.
- If the complex has a fitness centre or swimming pool, then residents of apartments and condominiums will have to pay for access to them. While for condo owners the bill will be included in the annual housing maintenance fee, for apartment renters the maintenance of additional amenities will, in one way or another, be included in the cost of utilities.
- Condominium owners pay metered utilities as part of their fixed costs, although there are still building maintenance fees. Those living in apartments most often see additional expenses for general house needs in their bills.
- Minor household problems in apartments are resolved at the expense of the landlord. For condos, there is maintenance service which is covered by bills.
To summarize, in terms of payment, a condominium is not particularly different from an apartment. The final rates for utilities depend on the amenities of a residential complex, additional benefits and area, as well as electricity and water consumption. It will not be possible to significantly save on utilities in any of the cases.
Let's look at the pros and cons in more detail. What are the advantages of apartments and what are their disadvantages?
- The main advantage remains the mobility of the resident. Tired of your neighborhood or are your neighbors too noisy? This can be remedied easily enough by returning the deposit and finding a new place of residence.
- Obvious savings on repairs and they are entirely the landlord's problem.
The disadvantage is also quite simple: the money paid monthly as rent could be used to buy housing, which will always be a sought-after asset.
The main advantage of a condominium share is the ownership of the property. The Thai market is developing steadily and prices are rising. Therefore, to acquire a highly liquid and profitable asset, you just need to choose the right location. In resort regions such as Phuket or Ko Samui, you can easily make a profit by renting out a condo.
The only disadvantage which can be considered is the peculiarity of Thai legislation, which does not allow foreigners to own an unlimited number of units. But when searching for housing with a professional broker, this issue is easily resolved. Considering that the cost of real estate in Thailand remains affordable, buying rather than renting can be considered more profitable.
If we consider purchasing real estate in Thailand as an investment, then a condominium remains the only possible option because:
- it can be resold in the future and you get profit from annual price increases
- it is easy to rent out, but only if it is permitted by the general house regulations
You can rent an apartment for a long term, but you will not receive the right to dispose of the property. As for the rest, everything depends on your goals. If you plan to relocate or the purchase has an investment purpose, then a condo would be the best option. If we are talking about a seasonal vacation, education or just a temporary stay in the country, then you can choose any other type of real estate.
It is difficult to give a universal answer to the question of what is better: an apartment or a condo in Thailand, since in general both formats are residences within a residential complex. But if you consider that foreigners can only purchase real estate as private property in condominiums, then studying the advantages of non-condo apartments does not make much sense. The leasehold format, even for many years, is less attractive than the possibility of registering housing under private ownership. On our platform, you can choose real estate that matches every taste and budget. To view examples of condominiums, you just need to set the appropriate filters in the search bar. Our experts are ready to tell you in detail what a condo is and also help you choose an apartment or villa in Thailand.