Condo’s versus’ Houses? What should the investor look to purchase in today’s market?

House Versus Condos

If you take a look around Pattaya today you will see many Condominium projects being constructed. There has been a considerable increase in the number of developments over the last few years, with many of these projects due to be completed by 2014 – 2016. Developers offer good off-plan deals to encourage early purchase and to help fund the construction too, with the promise of 8 to 10% increase in value by completion. So on the face of it buying a condominium off-plan could be a great investment opportunity, but there are some potential pitfalls too. If you decide to purchase a property in this way make sure the developer has a good track record of high quality construction and have several completed projects that you can check out for yourself. Some unlucky buyers in the past have invested their life savings in off-plan developments, which were never completed or completed late. This tends to happen with smaller in-experienced companies, so research is important. Another thing to consider is if there are going to be several thousand new condominiums available on the market in Pattaya in three to four years and your intention is to sell quickly once completed, you may have to think again. What will help is if you buy in a desirable area with good facilities provided by the developer, such as a decent sized swimming pool, car parking, 24 hr. security, local amenities close by etc. Long term investment could well be a different proposition, Thailand’s population has doubled since the mid 1960’s so in a few years’ time there will be more potential buyers looking for accommodation. They may be more foreign buyers too post 2015 when the ASEAN agreement comes into force. Re-sale condos are also worth consideration, a tatty looking studio apartment in a well-built project can be picked up for less than one million Baht and with a quick make over could make a small profit, this could be a good place to start if you have limited funds.

A quick internet search will reveal that you can buy a film star pool villa near to Pattaya for less than a 3 bedroom terraced house back in the UK. Wow, you might think. What’s the catch? Well, you can’t own the land it sits on, this often puts people off. Your Thai partner, Wife or Thai friend can own the land and you can buy a 30 year extendable lease or set up a Thai company that owns the estate… If you have the money and the desire for good luxury living and have a little bit of patience buying a house in Thailand can be the way to go. However, if you are intending to make a quick buck you will need to do some serious homework. Location is everything, isn’t it always? And there are many different areas in and around Pattaya where the same style house will have a huge range of price tags. Houses on secure estates, next to the beach, near to shops and schools all tend to be easier to sell and command a higher price. Land prices also vary greatly too, if you intend to build your new house from scratch talk to a good local developer that specializes in this field and they will advise you accordingly. So, the re-sale market is currently where the bargains can be found, and could well be where a shrewd investment could be made. (If you are looking for a more sensible smaller house with 2 or 3 bedrooms you can currently pick up a property around 100 sqm for under two and a half million Baht on a reasonably secure estate with communal swimming pool.) Many foreigners re-locate to Thailand and build their dream home, for some the situation changes and suddenly they have to sell. So they put their luxury pool villa on the market initially thinking that the privately located property 5km from the nearest 7/11 will sell quickly….Six months or even a year later, plenty of views, but no buyer. So the owner drastically reduces the price and a bargain is born! You may be thinking, if he couldn’t sell it then neither will I be able to? But, if you are in no rush to sell you could have purchased a serious medium to long term investment. How so? With local population increase in the Pattaya area and the ASEAN market opening for business in 2015 your newly purchased property won’t be 5km from anything for long……

In conclusion condominiums are easier to look after than houses, easier to secure, easy to rent and fairly easy to sell, if the price is right. You may not realize a profit in the short term when the local market becomes flooded by new build condominiums, but as a long term investment prospects are good. And remember foreigners can own a condominium outright, which is always a good selling point. Building your dream home on the other hand can be a labour of love, but could end up putting a big hole in your pocket unless you pick up a re-sale bargain that someone else funded. This is not true of all house construction projects of course, ones that are properly managed from concept to completion can realize good profits upon sale on completion. If this is your preferred option it is well advised to consult a well-established professional construction company who special in every aspect of house design and construction.

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