The Top 5 Things To Avoid When Buying Property in Thailand

The Top 5 Things To Avoid

The Top 5 Things To Avoid

The Top 5 Things To Avoid

When Buying Property in Thailand

Buying property in Thailand is a tempting proposition, now more than ever. There is a steady climb in tourist numbers – Thailand is in the top-ten of fastest-growing tourism and travel sectors, internationally – which is increasing demand within the real estate market, especially for rental properties.
However, before you dive into the brave new world of property investment in this market, you need to know how to avoid the common pitfalls that often cause headaches for new investors. Getting past these mistakes will make it easier for you to get started, generate suitable profit from your investment, or simply enjoy living in your dream home.
Here are the top 5 things to avoid when buying property in Thailand.

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1) Not Doing a Thorough Title Search and Due Diligence Check

Before you buy a house in Koh Samui, for example, you need to perform a title search on the property, as recorded at the Land Department. This search will include the most basic due diligence checks – whether the seller has the full rights to the land, or has any outstanding debts, mortgages, leases on the property that have not otherwise been settled.

A good title search will also reveal compliance with environmental and zoning regulations. This is particularly important in smaller, more controlled locations such as Koh Samui, which has very specific regulations for structures that are additionally modified by their distance from the beach, as well as their altitude above sea level.

You’ll need a lawyer or legal consultant to perform these checks for you, so please make sure you hire one.

2) Trying to Buy Property without a Good Thai Property Lawyer

As a foreigner, it’s highly probable you’re unfamiliar with the finer points of the Thai legal system. Bottom line – don’t try to do anything without having a good local property lawyer on retainer, specifically one who specializes in foreign investment. Any contract you sign, any deposit you carry out, any agreement made should pass through your lawyer. Even if you or your own lawyer from your home country have previously dabbled in property dealings before, you may overlook something that is specific to Thailand, and it’s extremely valuable to have someone familiar with the lay of the land to help you out.

Without this legal assistance, you may run into difficulties later on that could very well mark the end of your days as a Thai property investor. For example, one of the most basic considerations to make is that foreigners can’t own land in Thailand – only the structures built on that land. That’s why condominiums and apartments are popular targets for foreign investors. But a good lawyer can help walk you through the process of buying land through a Thai limited company or acquiring it via leasehold.

 

3) Failing to Work with an Experienced Thai Estate Agent

Buy Property without a Good Thai Property Lawyer
Buying property is a complex process filled with paperwork and research, and this doesn’t even take into consideration the fact that you’re already probably unaware of local customs, the specifics of different areas and the nuances of demand across the country.
uying Property in Development Project
A good real estate agent will be able to help you with these and more. They’ll be able to help you buy a house in Koh Samui, for instance, and they will select the best one available. They’ll know the lay of the land and how the market interacts with different variables, and they may even have properties in their inventory that are already aligned with your specific requirements. An excellent and experienced agent will also know the best ways to protect your investment. Working with a real estate agent is a key step when you’re doing business in an unknown territory. Without this relationship, you could very well run into any number of difficulties and missteps (including several other items on this list!)

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4) Buying Property in the Wrong Development Project

Unfortunately, a flourishing real estate market can reveal a number of inexperienced, questionable and downright criminal elements of which you need to be wary. At the very least, you might encounter new developers, who, sensing an opportunity, attempt to capitalize on the demand, but don’t have the management skills necessary to ensure a smooth purchasing experience. These new developers will often incur delays and run into a variety of problems. They’ll often offer you lower prices, as well as more flexibility with negotiations that favor your own needs. It may all sound too good to be true, and inevitably, it represents a considerable risk.

More established developers will have the expertise to ensure the success and quality of their projects. The cost of their properties may be more expensive, and they’ll probably be less willing to haggle on price or modifications to the plan, but you can be assured of their stability and reliability. Always research any potential development company if you’re thinking of working with them. How much experience do they have? What other projects have they completed? Can you discover any genuine testimonials from satisfied customers and investors?

Knowing the distinction between the two kinds of developers requires a great deal of research and the assistance of a trusted real estate agent or lawyer. Again, it’s another case for working with a professional team of consultants, who are experienced at buying property in Thailand.

5) Not Investigating Property Trends and the Investment Market

Individuals and companies are increasing their presence in Asian property markets. Integration with ASEAN and loosening regulations are helping with capital flow across not only Thailand but the rest of the region. However, it’s paramount that anyone, who is buying property in Thailand, especially capital growth-minded investors, should thoroughly research the predicted trajectory of the local real estate market.

At the moment, property values are on the uptick in Thailand, but a smart investor will always base their calculations and projections on solid and reputable historical market data. The current feeling in the Koh Samui property market is very strong. The previously mentioned tourism increase across Thailand, coupled with the demand for luxury properties, means investment in the region is considered a ‘safe-haven’ for investors. Putting aside the obvious, paradise-like charms of Koh Samui, it holds great potential in terms of rental yield, especially in the luxury sector.

Remember, these and other trends to watch out for are extremely important in maximizing your long-term gains when investing in Thai property.

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