Generally, there are three types of properties for Thais and foreigners to buy or invest in: condominiums, villas or houses, and land. Today, we'll focus on Thailand condos and villas - explaining in-depth the pros and cons of each to help you make the right decision.
| 1. Buying in a Condo in Thailand
Undoubtedly the most popular property type in larger cities or on more developed islands, condos are frequently purchased by foreign investors planning a move to Thailand. Whether searching in Bangkok, Phuket, Chiang Mai or beyond, condos not only provide a contemporary space to live in, the acquisition process is relatively simple too.
The regulation stipulates that any development must remain under majority Thai ownership, but that still means that up to 49% of the units in any condominium is available for purchase by non-nationals. Provided you buy the condo under your own name - and this threshold has not been hit - then there should be few complications in purchasing an apartment.
Foreigners can purchase in freehold a condominium (or apartment) as classified in accordance with 3 rules:
The government stated that they are in the process to change the law to convince more foreigners to invest in Thailand by purchasing property: both condominiums and houses. The law that will be changed is Land Code, Condominium Act, Civil and Commercial Code to expand they quota to buy the condominium and allowing them to buy the house as well.
Currently, the quota that allowed the foreigner to buy is 49% of the total area of the condominium project might be allowing them to own 80% of the total area of the project.
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1. Condos are one of the few pieces of Real Estate Foreigners Can Buy
Land ownership is restricted to Thai nationals, meaning that a foreigner must go through a Thai (example: your partner) to purchase land, which often lands them in difficult situations when things go sour. Condos, on the other hand, are open to complete ownership by foreigners.
2. Bangkok and other Thai cities are growing
The construction boom doesn’t seem to be stopping anytime soon. As infrastructure like the BTS and MRT systems expand, new areas of the city become accessible and property values rise. Using forecasting trends to choose the smartest locations for purchase could mean a big pay-off in terms of resale.
3. Endless Choices
Condos are everywhere in Thailand. Cities like Bangkok and Pattaya might just be the richest per-capita in condo developments in the world. All that competition can mean an advantage in the negotiating process for a seller.
4. Comparatively low maintenance cost
Taking care of a large building is obviously expensive, but with a few hundred condominium owners all “chipping in” the costs become considerably more affordable. Every condo requires owners to pay a Common Area Maintenance fee (CAM). The CAM covers all the costs associated with running the resort.
The fee is usually paid monthly, and covers all ordinary expenses such as salaries for staff, cleaning, etc., but will also cover the cost of keeping everything well-maintained compared to a complete villa or house.
5. Better security and being blithe in Pool or Garden work
Apartment buildings always have modern security systems with CCTV and all these along with security staff. So buying a Condo means availing all sorts of modern security facilities. Moreover, pools and gardens need tending. But in a condo, your management company will take care of everything on your behalf.
Condos aren't all about a relaxing swim and some tennis in the sun. There are drawbacks as well. Let's look at a few of the downsides to purchasing a condo that should not be overlooked when weighing your options.
1. Homeowners Association’s (HOA) Regulations
Abiding by the rules and regulations of the homeowners association (HOA) can be a potential roadblock and should be given serious consideration. Don’t like to be told what to do when it comes to your home? A condo might not be the best choice.
2. HOA Fees
While you’ll be saving money on the cost of the condo and on insurance, there are HOA fees to consider. These fees do provide value by covering things like maintenance, pool and lawn care, but they can range from a couple of hundred dollars to a thousand dollars a month. Review the value proposition before making the investment in a condo.
3. Hard To Sell
Reselling a condo can sometimes be more of an issue than reselling a traditional house. For example, they can be less attractive to potential buyers due to certain HOA regulations, and they can affect the type of loan a buyer can qualify for. Work with your real estate agent to understand the challenges of selling the specific condo you’re considering buying so you can have a solid game plan for the future.
4. Future Forecasting
Bangkok’s real estate market is unique – rules that may apply to foreign markets might not necessarily translate to the Land of Smiles. Unfortunately, many investors have experienced the pitfalls of Thai property investment firsthand, with the values of their condos plummeting after they purchase.
5. High Cost
Real estate is at a premium in Thailand, especially in Bangkok. Anyone who has lived or worked in Bangkok is familiar with the construction boom that seems to never end. Some experts recommend caution in purchasing condos for this reason.
6. Changing Visa Laws
Requirements for various visas often change without notice. For example, the Thai government recently increased the amount of money that foreigners on a retirement visa must keep in the bank.
In another example, the immigration department has introduced a new draconian measure called TM30 which requires foreign residents to keep their address on file and consistently notify authorities of their whereabouts, even for travels inside the country for a day. Many find these arbitrarily enforced regulations burdensome enough to consider abandoning their Thai residency altogether.
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Villas are a more exclusive type of house and will often have a private pool and they tend to be located within gated complexes. All types can be found in ‘villages’, or ‘Moo-baans’, these tend to be popular, partly because these villages have guarded secure entrances.
Owning a villa offers the benefits of space, privacy and complete control over maintenance. However, there is additional regulation to consider when acquiring a free-standing development.
Given restrictions on land ownership, foreigners cannot own a villa outright, rather they must purchase a leasehold agreement. In general, this process is straightforward and you should expect an offer of a 30-year lease on any villa or home, which is the maximum duration for any leasehold in Thailand.
The government introduced this restriction to control direct foreign ownership but there are rarely issues in extending the lease for a subsequent 30-years once the initial period is up. Equally, if you wish to sell the property during this time, then that process should be just as simple. Take a look at some of the pros and cons of buying a villa in Thailand –
Villas are usually specified as exclusive homes that are titled as "private" located within specific boundaries designed by the developer inside a gated complex. There are many villas located in these specific areas that usually have a general common theme.
A big advantage to buying a house is that you have total control over the property to remodel or make changes without the consent of others. Another house advantage is that it allows for extra indoor and outdoor space, which is more conducive to accommodating families, children and pets.
Villas also feature more storage space in closets, attics or basements. Villa offers more privacy because neighbours don't live as close by as they do in condo buildings which is always a great advantage of buying a villa. Let’s have a look at why some people prefer to buy a villa over a condominium/apartment:
1. Having some land
Technically speaking, owning real estate entails land. Condos don’t have it, by definition. Detached villas do. It’s one of the primary advantages of owning a villa. Yes, the property needs to be maintained. But you can build a private pool in your backyard, create a garden, host backyard parties, or even play any other outdoor games. And that’s to say nothing of the advantage of having a private, fenced-in backyard where your kids can play safely.
2. Greater self-determination and self-expression
One of the inherent disadvantages of a condo is uniformity. Since you don’t own the exterior of the home, there’s absolutely nothing you can do with it. A villa is a different story entirely. You can paint it any color you like, build a playhouse in the backyard for your kids, or put flowerbeds all over the property. A villa can easily be customized in a way a condo never can.
3. Room to grow
This is closely related to the land factor. As a family grows, you can also grow your house. You can knock down walls, and add an addition. You can build a deck in the backyard. In some less suburban areas, you can even build a guest house on the property. You can’t do any of that with a condo, and certainly not an apartment.
4. A house better accommodates life changes
Among all the aspects of a life controlled by an HOA, they can even control what you do for a living and who you live with. For example, if you want to start a plumbing business, you can often do it out of a house. You can never do it out of a condo or apartment.
The same is true with living arrangements. Condos have specific limits on who and how many people can live in a unit. If your sister and brother-in-law, and their two kids, need a place to live for a while, you can have them live in your house. A condo or apartment is likely to have restrictions that would prevent that arrangement.
5. A house is generally easier to sell than a condo
A condo can be a tough sell in a bad housing market. That’s because, for the most part, a condo is a substitute house. They’re the kind of property people buy only in the most robust markets. But detached villas or houses on privately owned lots tend to be more liquid in all kinds of markets. There’s also the individuality factor.
Each villa is unique, particularly after it’s been customized by its owners. There’s a greater likelihood it will appeal to specific buyers. Condos, on the other hand, are uniform. They’re so similar that one unit doesn’t necessarily stand out from the rest. If there are a lot of units for sale in a condo neighbourhood, it could take a year or more to sell your unit. This is a major reason why condos are often converted to rentals.
There are some inbuilt disadvantages of buying a villa, let’s take a look at some of those
1. Villas are highly expensive
Villas are priced higher as compared to apartments. They are even costlier than apartments that fall within the high-end luxury category.
2. Private security required
In a villa, you would definitely need to recruit private security staff and separate security equipment, which are quite expensive compared to an Apartment house or condominium complex.
3. A villa is not always located in city centres
As we know a villa always requires sufficient space and that’s why usually villas are not located in city hearts, rather it prefers to be located at the Suburbs or outskirts of a town, where urban facilitates might be limited. In metropolitan areas, land space is very precious or sometimes very limited. So, villas are usually not located in city centres.
In a nutshell, buying in a condo and villa in Thailand offers:
|1. Condos are one of the few pieces of Real Estate Foreigners Can Buy||1. Homeowners Association’s (HOA) Regulations|
|2. Bangkok and other Thai cities are growing||2. HOA Fees|
|3. Endless Choices||3. Hard To Sell|
|4. Comparatively low maintenance cost||4. Future Forecasting|
|5. Better security and being blithe in Pool or Garden work||5. High Cost|
|6. Changing Visa Laws|
|1. Having some land||1. Villas are highly expensive|
|2. Greater self-determination and self-expression||2. Private security required|
|3. Room to grow||3. A villa is not always located in city centres|
|4. A house better accommodates life changes|
|5. A house is generally easier to sell than a condo|
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