THE POSITIVES AND NEGATIVES OF AN OFF-PLAN BUY
To start with, the best attribute of an off-plan buy is the reduced value at which it is purchased as compared to a project that is completed. Buying a property at the pre-construction stage is known as an off-plan buy. Once completed, such properties are worth much more than their off-plan cost, with off-plan Bangkok properties appreciating by up to 30% on completion.
While looking at what benefits you, like low buying cost and higher future returns, it is also vital to pay heed to what facets of the property may benefit its potential occupants. The big plus point that off-plan properties in Thailand have for tenants is that once they come on the market they are brand new and therefore are much more attractive than older properties tenants may be presently staying in.
An off-plan property in Thailand, being more modern and contemporary is usually equipped with stunning décor, high-end facilities and new/hardly used light and bathroom fixtures that help lure prospective tenants to it. The new/less-used nature of amenities render these properties less likely to fall prey to maintenance issues and therefore have the potential to keep its occupants happy for a considerably longer period of time when compared to older, more run-down units.
In addition to these favourable qualities of an off-plan property in Thailand, a higher re-sale value can also be attributed to such properties due to their first-hand nature i.e. properties owned and lived in by a single owner goes for a higher resale value owing to its relatively new/less used nature.
Close attention to detail is usually paid at the construction phase of an off-plan property in Thailand as investors usually take it upon themselves to make sure their money is being well spent. This and the fact that off-plan properties move with the times and are more aesthetically pleasing as they are packed with modern amenities, benefit the future tenant and investor alike.
Before signing a contract to purchase an off-plan property in Thailand, due diligence must be paid to the following (pit-falls):
- It is vital to study the different development phases of an off-plan property.
- You must know what you are purchasing and therefore must not succumb to the property developer’s sales pitch or be solely drawn to the aesthetics of the off-plan property.
- Doing a background check on the developer along with a title deed check is advisable.
- An environmental impact study and other such development licenses must be looked into before purchasing a pre-construction development as properties having such licenses give its owners protection under Thai law.
- Contracts usually favour the developers, much like foreign (managed) developments that offer western, comprehensive and attractive contracts that attract foreign investors the world over.
Keeping the above points in mind, buying an off-plan foreign or local development could turn into a great buy yielding consistent favourable returns for many years to come.
Key phrase: Off-plan property in Thailand