What is the risk of buying a property in Thailand?
This is a discussion that many people and experts have had over the years. For the many people who have enjoyed reaping significant financial rewards, there are as many who have also made substantial loses. There is always a risk of buying a property in Thailand, especially if you are a foreigner.
There are two types of property available here in Thailand. Off Plan and completed. We will list the risk of buying each type of property in Thailand below.
OFF PLAN CONDOMINIUM – HOUSES
Off Plan is exactly what it says, i.e. the building is yet to be completed. This means that you have to wait considerable time, years even before your purchase is completed.
What is the risk of buying property in Thailand – OFF PLAN
1) First, you need to consider the stability and financial track record of the company building the project. Do your homework and investigate their history. Have they completed other projects before successfully?
2) What payment plan is offered? Are you expected to invest a considerable sum before the ground is piled? What are the monthly repayments and at what increments do those payments increase? What will be the final payment due? Look at the level of investment over the period of time it will take to complete the building.
3) Progress Reports. You need to be sure of the construction time and what intervals you will receive reports from the Developer. A significant risk of buying property in Thailand is lack of communication, make sure you know exactly how your investment is doing.
4) A risk you face is that designs may change during the construction. This may affect how the final project looks. Be diligent in your investigation. Look online at any other completed projects the Developer has finished. Often there are always old images showcasing what the initial Plan was going to look like? See if there are any noticeable differences.
5) Flip your purchase. A widespread practice and one that is often used to convince you to invest is to flip your purchase. This is another risk you have to consider. Yes, right now when you are looking at your investment, the project looks fantastic. However, that is not always the case. Financial changes in the Exchange Rate may have a considerable impact. Other Developer projects may be more desirable, leaving your investment behind. Remember, if you do not flip your investment, you will either have to pay the full amount or face losing the unit.
What is the risk of buying property in Thailand – COMPLETED
Buying a house or a condominium that is completed also carries its own risks. There are several factors you need to consider to avoid any risk when buying your property.
1) if you purchase your property in a Thai name, your wife, girlfriend, then you are at risk of losing your home if your relationship breaks down. You should consider a Thai Company to protect yourself.
2) Purchasing your leasehold property cannot exceed 30 years. There are options to renew the lease and extend this for a further 60 or 90 years. However, this is not guaranteed, and you at risk if the answer is no!
3) Transferring a property. This is not as simple as it may seem and can cause considerable distress. Foreigners are always under constant scrutiny when it comes to owning property in Thailand. Check if the property has a Transfer Option included in the existing property contract before parting with money.
4) Why? A question people often forget to ask. This beautiful house is up for sale and is priced at an unbelievably low cost. Yes, there may be a story that the owner wants to return to their mother country or work commitments etc. However, pay a visit to the local council offices and check with the planning department that no roads or other significant developments are planned to happen. Once you have signed the dotted line, you are at risk of any future events or roadways affecting your property.
The above list details the risk of buying a property in Thailand.
These are the most commons risks associated with property investment. Be sure to take your time, don’t rush into any agreement no matter how attractive it may be. Visit local planning offices and verify there are no scheduled developments ahead that will affect you. Check the lease of the property not just once, but several times. Seek assistance from Legal companies and solicitors. Because of these factors many Agents will steer you towards buying a condo in Thailand as the restrictions and risks are far less.
When choosing a Real Estate agent to assist you, be sure that the agent knows the area and more essential knows about the property.