Investor tips

A potential property buyer must first of all answer the question: what exactly is he going to buy it for? Are you planning to buy basic housing, vacation housing or just invest? In each of these cases, your argument will be different when choosing an object.

If your goal is purely investment, when choosing it is important to put rationalism in the first place, not emotions. It is better not to buy what you like personally, but to concentrate only on calculations, since in many cases real estate objects, the acquisition of which is beneficial in terms of investment, may differ significantly from the objects that you would choose for yourself.

One of the fundamental points that play an important role in the selection of real estate, and therefore in need of careful analysis, is the “exit strategy” (capital withdrawal). An exit strategy for someone who plans to buy real estate for an indefinite period in order to earn a regular income will differ from the strategy of someone who wants to make a profit promptly, by means of a “quick turnover” (for example, buying a property at the development stage and then selling it or at a later stage of development, or shortly after the commissioning of the object).

You may have heard the usual phrase that there are three factors that need to be taken into account when buying a property – this is “location, location and again location”. No matter how trite it may sound, this is absolutely true, since it is the location of the object that will have a decisive influence on your investment income. Put yourself in the shoes of a person who would like to rent your apartment or buy it from you when you decide that it is time to sell it. What factors will be most important for him? When it comes to buying property in Bangkok, significant factors in choosing an object will be the degree of prestige of the area, ease of access to transport lines leading to the city center, proximity to shopping centers and other entertainment facilities, etc. If we are talking about Pattaya, the conditions under consideration will be proximity to the best beaches and at the same time to the city center, as well as the presence of a sea view.

Remember that the situation on the real estate market develops similarly to situations in other markets, i.e. obeys the elementary laws of supply and demand. If demand is high and supply is not enough, prices will rise. Conversely, if supply exceeds demand, prices will fall. Therefore, an effective investment strategy will be investing in real estate, the characteristics of which are rare or exceptional. In resort cities such as Pattaya, it will be complexes built right on the coast. In large cities, such as Bangkok, you should pay attention to objects located in the most prestigious areas close to the business and entertainment life of the city, where free land for new development projects has become a rarity.

Those wishing to optimize their profits should pay attention to the level of profitability from the lease of the acquired object, which is calculated by dividing the value of the projected annual income by the value of real estate. By and large, an investment in an object with an estimated rental yield of more than 5% would be an excellent investment.

The quality of construction and the level of service are two other aspects that should be paid attention to by an investor who counts on long-term growth in property values. A well-built and well-maintained facility will be more expensive for decades. Poorly constructed and poorly maintained buildings will soon look neglected, which will lead to a halt in price growth in the foreseeable future and even to their fall, since newly constructed facilities will be more attractive to buyers.