How to invest
By Jan Nuyten
To invest or not to invest that is the question! Not really true in my opinion. The real question is how to invest. Here are some guidelines as there are many different ways to let your money work for you.
Purchasing pre-construction from developers with ‘proven track records’.
Investing in a new development project such as City Garden Tower (Third Rd.) can be very profitable. When you buy condominium units during the pre-construction and construction stages, even from a ‘major’ developer like Global Top Group, you will have the opportunity to purchase them at very competitive prices. The key factor here is to invest in projects from developers who are well known and respected, those that have ‘proven track records’.
A second key-factor for making good investment returns on your money is to buy units in the better locations, the more desirable living areas of the building. For example a corner unit with sea-view facing Jomtien Beach is sure to be a good investment.
When purchasing pre-construction you must do your research so as to be very sure of the developer. There have been developers in Bangkok and the Eastern Seaboard in the past that have not completed their projects on time…..choose your Real Estate Broker very careful and you will end up with a great deal!
2. New developments under construction or just completed.
The advantages when investing in new developments is that you will not have to wait a long time to sell or rent out your property. In other words, your investment return is much quicker then in the first category. The second advantage is that you can be much more confident that the project will be completed. In addition, you will also know exactly what the quality is of the materials used and the caliber of finishing work. This is most definitely a more secure path, especially for the new or short term investor.
You will pay for the convenience of security with a less profitable investment return as is found in the purchase of units during pre-construction.
3. Owners who need to sell their properties.
At this time the real estate market has some very attractive investment options with many in Pattaya declaring a ‘buyers market’. This is due to the impact of the financial crisis and the Russian market decline. These two ingredients have brought to light a good number of property owners lowering their selling prices and we have also seen a good deal of ‘owner financing’. Terms and conditions always enter the arena during markets such as we are now seeing here on the Eastern Seaboard. At least a few times a week we receive emails and/or calls from property owners that are lowering there selling prices. Not all of the properties are ‘investment winners’, but after doing your research, there are some real good deals on properties that come available. Also there are a good number of fire sales around!
These types of 'deals' tend to come up unexpectedly and usually sell pretty quickly as well. You must have quick and available cash to be able to take advantage of these types of property sales……and the ability to make that decision. Remember…..be prepared for opportunity!
4. Purchasing a home with a tenant and rental contract.
If you are the kind of investor that is looking for a real estate investment that will provide you with a reasonable and steady income right from the start, this is your kind of investment. The prices for detached houses compared to condos are much lower but the rent you get is the same. For example when you have an 17 Million Baht Royal Cliff condo you can get approximately 65,000 Baht Rent a month, but when you have say a 14 Million Baht house in a good secure expat village, like the Vineyard, you can get 85,000 Baht rent a month rent. You pick your deal as owning a house is different as owning a condo….again ask your realtor for advise!
One particularly important issue here is 'knowing' who is currently renting the property (pays rent on time, clean and neat, low maintenance to the premises, etc.) before you complete the purchase.
5. Purchasing land in areas which will be 'positive growth' areas in the future. (long term investments).
This category is a bit more insecure then buying land in an area where your money is not ‘tied up’ for a longer time but at the same time you can make a lot more than with short term investments. Some very good examples would be as in plots in the Bangsaray area, Phoenix Golf Course and the Silverlake Vineyards/Buddha Mountain area.
You 'must' be ready, if necessary, to wait the necessary amount of time to realize your investment. People that have made long term property investments only to find they 'have to' sell early for some reason are sure to lose money.
Purchasing land as short term investments in up and coming areas of 'positive growth'.
There are a number of areas which already show good ‘short term’ investment possibilities. Examples are Naklua, Pratamnak Hill, Wongamat, Na-Jomtien and Soi Chaiyapruk, etc. Both commercial and residential plots of land in these areas have been going up steadily in price the last several years and will most likely keep on doing so in the coming years.
Make sure you know all the necessary information concerning building codes, zoning rights, utilities available, etc. The best plot of land in the best 'positive growth' area without any of the basic and necessary building codes, zoning rights and/or utilities available could make or break your investment returns.
7. Development of your own condominium or housing developing project.
If you are really looking for a solid, highly profitable and challenging investment return, this is the one that has shown to be reliable over and over here in Pattaya.
After organizing the proper design/architectural team, construction team and marketing team, there is no better way to make as much as 50% to 85% profit and more on your investment.
Location, design and materials are absolutely critical for success in developing your own project. You must know what you are doing and have the right 'development team'. Know what you are doing and the profits are extremely high, but when investing in large development projects.....mistakes can be very costly as well. Know what you are doing and know who you are working with and you can make the ‘Big Money’ too!
Geschreven door Jan Nuyten
Managing Director Pattaya Prestige Properties