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Off-plan real estate in Thailand. Tips to pay attention to not to end up with nothing

Due to the favorable climate and pristine nature, Thailand welcomes thousands of tourists annually. Visited the country at least once, most of them return with the desire to buy real estate and stay permanently. It attracts foreign investors as well, who prefer to put money in off-plan projects in Thailand. They choose apartments or villas off-plan due to high liquidity and bigger opportunities. The purchase is not difficult to do, but there are legal nuances that you need to know and comply with. 

Off-plan real estate 

Incomplete construction is also known as the “primary market” or “off-plan” and means that the property is either about to be built or is under construction. The apartments in projects under construction are being bought directly from the developer. Investing in off-plan property has gained its popularity a long time ago and appears highly beneficial now. 

Reasons to invest in off-plan real estate 

The main advantage of buying properties under construction is the opportunity to save money and increase the capital of the asset. Besides, the multiple buyers choose real estate under construction due to several important reasons:

  •     Year-round tourist flow.
  •     Stable national currency: Thailand has the lowest inflation rate in the world.
  •     Property prices increase by 5% per year, and even more for resort properties.
  •     No Property Tax.
  •     Full ownership for foreigners.
  •     Low entry threshold – from $80,000 for an apartment by the sea under construction.
  •     Thailand is not interested in the origin of the money and does not give the names of the owners.
  •     A high rental income of at least 5-7% per annum. This is 4 times more than a bank foreign currency deposit.
  •     New buyers can choose materials and finishes to their liking, and also make some layout changes.
  •     A buyer gets a shiny new product when construction is complete.
  •     Payments are deferred during the construction schedule, which means a buyer doesn’t have to pay 100% of the equity.
  •     For the “right” project, buying off-plan has more potential for capital appreciation if you invest early in the sales cycle.
  •     A diverse supply of available sizes, views and layouts.

Types of real estate ownership in Thailand 

There are two types of ownership in Thailand. 

      Freehold is essentially private property. Freehold property can be bought, sold, inherited, donated, rented out and receive income from it. When buying, a foreigner receives a stamped certificate “Chanot”.

      Leasehold is a time-limited possession. Typically, the contract is signed for 30 years with the right to double renewal (up to 90 years). Despite the fact that it is a multi-year lease, leasehold allows you to dispose of real estate in the same way as a freehold (sell, inherit, give, etc.). At the conclusion of the transaction a contract is issued, registered and certified by the Land Office.

A foreigner can buy a condominium apartment in his own name in a freehold. It is a residential complex in which each unit has its own owner, but the common area is jointly owned. However, the developer can sell to foreigners in full ownership of not more than 49% of the living space. The rest can only be registered to non-residents in the leasehold.

With houses, townhouses and villas, the situation is as follows: the building itself can be registered as a freehold or in a leasehold. But the territory under it and around it can be taken only in a leasehold.

Important tips to know about real estate purchase in Thailand 

  1.     The selection of an object 

This is probably the most important question and the ultimate success of the purchase of housing depends on its correct solution. When choosing an apartment you need to bring together such factors as price, quality, location, infrastructure, reliability of the developer and optimize all these factors for the available budget.

It is also highly profitable to purchase a housing unit at the presale stage. This is the beginning of the sale when the developers offer the lowest prices. By the time the project is finished, the price of the apartment will go up by 25-35%! Nevertheless, sometimes it is possible to buy a house quite profitable by special short-term promotions, which many developers periodically hold.

  1.     The booking of a housing unit and signing a contract 

First you need to book the apartment, that is, pay the developer a non-refundable deposit, so he withdrew it from the sale. The size of such a deposit is on average from 20 to 50 thousand baht and is determined by each developer independently. Once the developer has received your deposit, he must draw up and sign a contract with the buyer. Then, the buyer makes the first payment to the bank account of the company-developer and the contract comes into force. Pay attention to the fact that the name of the company in the contract and in the invoice should be the same. All further payments should also be made only to the bank account of the company-developer.

  1.     The process of payment

All the payments are performed to the bank account of the company-developer. Since all contracts in Thailand are concluded only in Thai baht, it is important to make sure that the sum in invoice is reflected in one of the convertible currencies. All currency receipts in Thailand are automatically converted to Thai Baht at the current exchange rate. Because of the floating exchange rate against the dollar/euro, you may be in a situation where you have not paid or overpaid the amount on the invoice. There is nothing wrong with this – all receipts from you are counted by the developer in baht cumulative total, so any underpayment or overpayment will be taken into account in the next invoice. 

The outcomes

Buying real estate in Dubai is a reliable way not only to save money in an unstable economy and inflation, but also to generate income. If you rent out the bought apartments or villas, they will pay off quickly enough. With decent dedication, it is possible to perform the deal successfully and without any unpleasant issues. Visit the website Thailand-Real.Estate and select a profitable housing unit to your taste and budget.