Some Basic Knowledge To Property Investment
Over the many years I have been in this business here in Phuket, I have met with hundreds of property investors. All of them have their specific requirements and taste. And all have their own specific reason for investing in property in Phuket. Still, although everyone is different, has different taste and different requirements, there are still some basics that all need to keep in mind when selecting the property you find the most suitable to invest in.
These are some insights I gathered over the years dealing with these investors that I want to share with you:
Good Location
I know it will sound like a cliché, and I have to admit, it is. But when it comes to making your choice when buying a property, especially when you are buying for investment purpose, be it here in Phuket or anywhere else around the world, it is all about location, location, location. When you are buying a property to live in it yourself, location may be a less significant factor as one may have different preferences in where to live. Some like to live in a quieter location, away from the resort areas and tourists. These people are probably more interested to buy a Villa in Rawai, or an apartment/condominium in Nai Harn. Others will choose to be close to the action with easy access to shopping, nightlife… These people are very likely to be more interested in a property on the west coast of Phuket, be it a house in Patong or a luxury ocean view apartment in Kamala or any other resort area close to the island’s beaches. Proximity and accessibility to schools, airports and hospitals are some other important factors to consider for some. Even when buying to live in the property yourself, it is important to also consider how other people will view the location and even to try to think ahead about how the area might develop and will look like in the years to come. After all, you may one day decide to sell the property. So it is advised to try to be as objective as possible when it comes to deciding on the location.
Is the property located in a good development? Is the area around it already built-up or what could be built there in the future? How about the drain or power cables? Is it close to the main road? How far is it situated from the beach? When choosing the location of the property, these are some of the points to consider when thinking about what will appeal to your potential buyers in the future.
Good Property layout
If you are buying an existing property (i.e. a property that is already 100% completed or a resale), it is important to consider if you are satisfied with the layout of the property. Many of our many clients over the years like to have an open plan living area as this makes the room look and feel more spacious. As we are living in Asia and many of these buyers have spent a significant part of their live in the region, many of them are also taking the ‘Fengshui’ into consideration. If there are many angles and corners in the house, that property will not suite them. But in any case, a good layout will save you time, effort and money in having to redesign the property layout to suite your needs and taste the most. If you are buying a property ‘off plan’ or while it is still under construction, most of the times the developer will be flexible enough to make the necessary changes to the layout to fit with your taste and requirements, as long as that is structurally possible.
Good History
If you are buying a resale property, it might be good to know the history/background of it. Why are the current owners looking to sell? Is the current owner living in the property or is it rented out? These things are important in the making of personal and economic decisions.
Profitable Investment
If the property is for investment, with the intention to generate a good rental return, the potential buyer should also get the information about the expected rental returns or, if it has a history of lettings, the proof of the returns. Does this match with what other properties in the area are generating in rental returns? Then you need to consider if this is acceptable for you.
Another point that needs to be considered when the purpose of the purchase is mainly investment is the expected capital appreciation. What is the average price for similar properties in the same area and how are these prices compared to what they were about 5-10 years ago?
Sometimes it will not be easy to get a straight answer to this as in many areas of the island, 5-10 years ago, there was almost no development of the scale and quality we now have.