The Top 5 Things To Avoid When Buying Property in Thailand
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
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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