You’ve discovered a stunning resort community in Thailand, you’ve enjoyed yourself there and you’d like to return any time you wish, and hey, maybe you can generate some cash in the process as well.
Congratulations. You’ve just taken your first step to buying a vacation rental in Thailand.
But before purchasing your dream holiday home and committing to a big expenditure, it’s necessary to think carefully about the purchase, to make sure it makes financial sense and that your dream won’t turn into a nightmare in the future.
Think about what is your motivation for buying? Is it primarily for an investment, are you looking for rental income or is there a longer-term goal like retirement involved?
Get to know Thailand and the local property market
Tourist areas in Thailand tend to be microcosms and don’t replicate the economic structure of the country as a whole. Remember, just because you enjoy holidaying in Thailand for a couple of weeks a year, it doesn’t mean that Thailand is necessarily the place for you to live long term.
Being a homeowner in Thailand, means you need to widen your perspective of the country. Getting pleasure from 2 weeks of mellow vacation time may well be completely different once the responsibilities of ownership are concerned.
That said, Thailand is ranked very highly as one of the most liveable places in the world for expats.
Research the property laws
Don’t forget every country has its own laws regarding property/real estate and Thailand is no different.
Whilst it’s generally pretty straightforward for foreigners to buy and own property in their name, there are restrictions with regards to foreign land ownership so make sure you’re familiar the rules and regulations before investing your money.
Don’t Miss: Can foreigners own property in Thailand?
Make sure you have required funds
You should only buy a property you’ll be able to afford. Sometimes a hefty down-payment is needed, which could be as much as 50%.
If you are looking to get a mortgage for your property, have you looked into this properly? The chances are that it could be very different from getting a mortgage in your home country.
For example, for a single foreign guy, getting a mortgage in Thailand, whilst not impossible is very difficult.
Generally speaking, it is much easier for foreigners married to a Thai national to get a mortgage. Banks will normally lend to a Thai national, with the the foreigner acting as a guarantor. Normally banks will want the name of the property owner and the mortgage name to match. Consider if this would be an issue for you or not.
Whatever you decide with regards to financing your vacation rental property, make sure you have sufficient funds to cover any costs during the times the property might be vacant.
Once you’re sure you’ve got this covered, check out total running costs of the house and consider taxes, insurance, maintenance and utilities.
If you don’t live nearby, you may need to consider hiring a caretaker or property manager. In beach and mountain areas, sand, salt and wind will raise a home’s maintenance prices well. A house might have to be painted once every 2 or 3 years, and a mountain house might have annual deck repairs.
Whatever you do, after you figure out all potential expenses, inflate the numbers. If you are prepared for a worst-case situation, you will seldom encounter a surprise. Also take into consideration all promoting and administration prices for rental as these will add up too.
Work with an agent who know the locality
You drive to somewhere in the remote countryside, and sure, it’s nice. It’s picturesque. You’ll never get tired of watching the sunset across the nearby rice fields.
However, you may not notice that the road which leads off to the exclusive neighbourhood gets flooded during the rainy season, and is unusable.
A local estate agent would be aware of that and that should inform you of such potential hazards before you end up buying a vacation rental in Thailand.
Remember, a good agent should go further than just being their to sell you property. A good agent should effectively also act as a local guide, chauffeur, even an interpreter and much more in between. Take a look at this blog post on how to find a good real estate agent in Thailand.
Make sure the house will generate a decent rental return
Your idea of dream vacation might mean visiting an area with no tv, no internet access and no sight of your neighbor’s fence. However, this isn’t usually what people that rent vacation homes want.
If you are serious about renting, check that it’s compatible for vacationers.
Of course, location is all important. Ideally, the house should be close to the action, or at least within easy reach of the local facilities and amenities.
Properties like these are usually expensive, but they have higher rental returns.
Alternatively, a property that commands a lower rental return would be more accessible to more people, and you could look at targeting both expats and Thai nationals, which will dramatically increase your chances of renting out the property all year round.
Consider your own use
Prior to buying a vacation rental in Thailand, think carefully about how you intend to use the property.
If you’ve vacationed within the location and adore it within the best season of the year, this is often the time most potential guests will want to use the property too. Therefore, using the property during high season or in valuable rental periods might not be the best plan.
There are still plenty of good options for those who are interested in buying a vacation rental in Thailand, particularly in the places such as Hua Hin, Koh Samui, Pattaya and Bangkok.
However, remember that for most people, buying any property anywhere in the world is a major call and should not be done on a whim without plenty of thought and consideration.
Taking the time to think and do the due diligence will save lots of your time and stress long run.