It is as same as any other country, involving purchasing or renting of property in Thailand. That could be a residential premise, purchase of land for farming or a development for residential purposes. But then when it comes to ownership of a foreigner, of course, there are legal limitations. Why?
- The scarcity of information to guide purchasing decisions and;
- Difficulty experienced by the individuals who are looking to dispose of their investments.
A few other features of Thai real estate investment can be found below;
|
Initial financial commitment required |
Moderate/high |
|
Specialist knowledge needed |
Moderate/high |
|
Ongoing commitment of time |
Moderate/high |
|
Level of risk |
Moderate/high |
|
Liquidity |
Low/moderate |
|
Likely ROI |
Low/moderate |
|
Time frame |
Usually medium to long term |
|
Buying costs |
Legal fees; transfer fees is paid by buyer or seller, or split |
|
Selling costs |
Legal fees, commission payment for introducing buyer to seller, advertising costs |
|
Feasibility of establishing or managing investment from outside Thailand |
For purchasing the potential owner needs to be present in Thailand |
|
Holding costs |
Mortgage, insurance, agent’s commission, maintenance/management fees, property tax |
Apart from being a holder of a physical property, there are two other avenues of getting exposure in the Thai property sector, which are buying shares in more than one listed property development company, and investing in a listed or unlisted property fund. This way you can ease the liquidation of the investment when compared with holding the actual real estate.
If we see the traditions, Thais would usually buy and sell properties by simply word of mouth. And the process involves giving a commission of at least 3% to those who introduce the buyer to the vendor. It is a few years back Thailand has witnessed the advent of a real estate agency that was familiar in the West. Initially, it was limited to those areas wherein there are huge numbers of foreigners buying property. However, the scenario today is a bit different as you will see them almost everywhere in Thailand.
There’s yet another avenue through which foreigners can think of investing that is by buying court-seized and bank-foreclosed properties. Often, the creditor is the bank that holds a mortgage over a property. And then the court will attempt selling the property at an auction in order to discharge the debt. However, there are sometimes when the property cannot be sold at auction. The court will thereafter reduce the reserve price to sell the property.
When you are purchasing a foreclosed property, be aware as you may not be granted vacant possession, which means you could be held responsible for conducting the eviction of the prior owner.
