Anyone had any experience in investing in property in Phuket?

[backspace]

Hey guys

I just wondered if any of you had any experience in investing in property in Phuket, the market seems strong, Surin area perhaps?

Or is it riddled with corruption and to be avoided at all costs?!

[Steve@thaib]

I would think Dodger knows his way around Phuket property, maybe he will chip in here or you could PM him.

[PTG]

People that got in 10 years or more ago have seen great appreciation. Not sure I can say the same now as I have seen a few friends invest in new condos and ended up selling back to the developer at a loss just to get out.

[LivinLOS]

Even people who got in 10 years ago, depends very much on developer, location, quality etc.. Eg the Kamala hills project not that long ago people were trying to sell condos in there for ballpark what they cost to buy even 5 or 7 years back when sold off plan.. Add in your 75k a year condo fees per annum and they didnt make a bean.

People that REALLY made money were the ones who bought land soon after the Asian currency crisis.. The baht halved overnight almost and people who bought land back then (and homes) really did see mega appreciation.. Tho its often much harder to actually make a sale at prices people are claiming at market values. Lots of issues with land access, bent land titles, encroachment and poor surveying, 80 m build limits etc etc etc for the unwary.

I know at least one person who made millions in land back then.. And over the next few years speculating lost the lot.

[WarProfiteer]

A good question would be why you would want to invest there? Is there some particular reason you think Phuket is a good gamble?

I have properties and the things I look for are stability, my own understanding of the laws governing what I can do with that property, the overall trend in potential rental incomes and/or future sell values, etc. By most of those yardsticks, Phuket is about the last place I'd want to put money right now.

[Dodger]

Even people who got in 10 years ago, depends very much on developer, location, quality etc.. Eg the Kamala hills project not that long ago people were trying to sell condos in there for ballpark what they cost to buy even 5 or 7 years back when sold off plan.. Add in your 75k a year condo fees per annum and they didnt make a bean.

People that REALLY made money were the ones who bought land soon after the Asian currency crisis.. The baht halved overnight almost and people who bought land back then (and homes) really did see mega appreciation.. Tho its often much harder to actually make a sale at prices people are claiming at market values. Lots of issues with land access, bent land titles, encroachment and poor surveying, 80 m build limits etc etc etc for the unwary.

I know at least one person who made millions in land back then.. And over the next few years speculating lost the lot.

Sef the above is not factually 100% correct regarding Kamala Hills.

1. When you bring back in currency exchange rates they bought at 72 to the pound and sold at 48, so sold at profit, even if same sales price obtained.

2. You note expenses of condo fees but forget to add back in rental return, 75k outlay against 3 to 400k income.


Land was and still is to a fair extent rapidly increasing, and as they say they do not make more land, so a good potential for investment increase but no real option for income generation, or very little anyway. Note regarding they do not make land anymore (Not factually correct anymore since Dubai), but generalising sort of statement.

Prices have always been distorted on the island because of the owner type and lack of financial pressure. Most properties are second homes, bought with cash, so no monthly mortgage payment to affect living standards back home, no pressure to upgrade to larger property as family grows etc. People even today think there are breed of unintelligent, uninformed buyers wandering the globe carrying bundles of cash to over spend on property, they seem to over look the advent of the internet and the simplicity of search engines available even to the great unwashed.

There are fire sales here on the island, its just getting to find them, most agents will have one or two. These offer good rental returns and potential capital growth.

Negatives I feel are what happens when the big man leaves the room, potential civil war and the simple fact they do not want us to own property here.

Positives are its a holiday destination, the sun always shines as they say, good rising demand for rentals, can get good appreciation if buy right and not with your ambre solaire head on!!!

[LivinLOS]

Sef the above is not factually 100% correct regarding Kamala Hills.

1. When you bring back in currency exchange rates they bought at 72 to the pound and sold at 48, so sold at profit, even if same sales price obtained.

Thats against one currency.. Theres 100s you could compare it to so totally irrelevant in actual local return terms.. If you wish to currency speculate theres a lot easier ways to do so than buying a condo, simply putting money in the bank at interest would do. Or buying thai stocks, or bonds, or or or or..

Considering the fluctuations of one currency against another as a profit in the property market isnt valid.. thats a profit in the currency Fx.

2. You note expenses of condo fees but forget to add back in rental return, 75k outlay against 3 to 400k income.

Again, renting your property out is a different aspect.. Its related yes but also comes at a cost. I think many people buy these places to have as their own getaway and dont want other people being in the place.

Agreed tho that buy to let is part of it, but I was talking purely on asset appreciation of property purchase. Lots of people seem to have the impression that everywhere on Phuket has gone up multi 100%.. Sure seaview land sure did (as long as you didnt have 'issues' which often cost people a huge loss and few remember) and lots of small villas did very well. But many places have had only incremental rises if that.

[LivinLOS]

Curious for my own mind.. Remember that little 'bali style' house behind the wall with the dinky pool I nearly rented ?? You took me there..

Did that ever sell ?? If so what did he get ??

[Dodger]

Yes 11 million, bought 11 years ago for 3mil, spent a mil on it.

Recently sold villa for 7 mil, on market at 11 mil, owners bought 9 yrs ago 4.5mil.

Both rented, both had good rental yields.

So with a worldwide recession, a good market decline, there are still capital appreciation to be had for many here, as there is in most worldwide property markets.

Rider
Please note we are not Real Estate Agents, as Management and Rental Agents we know all of our owners who wish to sell and occasionally (4 or 5 times per year) sell the odd property to tenants, friends or simple enquirers. So I am not boosting sales or purchases in Thailand for my/our personal gain.

[marc26]

Yes 11 million, bought 11 years ago for 3mil, spent a mil on it.

Recently sold villa for 7 mil, on market at 11 mil, owners bought 9 yrs ago 4.5mil.

Both rented, both had good rental yields.

So with a worldwide recession, a good market decline, there are still capital appreciation to be had for many here, as there is in most worldwide property markets.

Rider
Please note we are not Real Estate Agents, as Management and Rental Agents we know all of our owners who wish to sell and occasionally (4 or 5 times per year) sell the odd property to tenants, friends or simple enquirers. So I am not boosting sales or purchases in Thailand for my/our personal gain.

I think you've always been pretty up front when discussing the real estate market when people ask
It's not like you jump at any chance to promote it

When you are being a mutt I tell ya and in these cases of talking real estate I've never seen you promote or be misleading

Hey, that is a solid Paulie seal of approval....you should put that on your website 555

[davis121]

Yes 11 million, bought 11 years ago for 3mil, spent a mil on it.

Recently sold villa for 7 mil, on market at 11 mil, owners bought 9 yrs ago 4.5mil.

Both rented, both had good rental yields.

So with a worldwide recession, a good market decline, there are still capital appreciation to be had for many here, as there is in most worldwide property markets.

Rider
Please note we are not Real Estate Agents, as Management and Rental Agents we know all of our owners who wish to sell and occasionally (4 or 5 times per year) sell the odd property to tenants, friends or simple enquirers. So I am not boosting sales or purchases in Thailand for my/our personal gain.

Sounds like a pretty good return actually. As regards buy to let though there seems to be a massive amount of development going on - do you think demand will be able to keep up with the supply though in Phuket ?!?

[LivinLOS]

Yes 11 million, bought 11 years ago for 3mil, spent a mil on it.

11 mil for that tiny thing ?? He wanted 6.5 back then (with a free used car IIRC) and I thought that was steep.

No wonder Phuket is being built over like that, when a couple of mil of build cost, on a couple of mil of land can get double digits. I would say if thats the case then its still the developers who are making the money not the owners.

[LivinLOS]

From the short experience I have personally, you also need to consider the harsh weather conditions.

I am now in my 3rd house in Thailand, which is structurally collapsing..

Its already had 2 major month long refurbs to patch up cracks, foundations and problems in 3 years. The problems of course were not fixed only patched, and is literally falling apart. The pool is leaking and realistically a professional company who I asked say it probably needs to be scrapped and restarted (possibly 2 mil cost.. Its an 18m pool). The assumption that you buy and dont have running costs is often false due to such shoddy building practices.

[LivinLOS]

Sounds like a pretty good return actually. As regards buy to let though there seems to be a massive amount of development going on - do you think demand will be able to keep up with the supply though in Phuket ?!?

I think demand in Phuket is going to keep growing.. Its just the critical mass of such a name place now.

I would be far more concerned with good management and rental agents, legal issues, etc etc..