Thinking of buying a rental property in Phuket? Read this first!
If you are interested in becoming a landlord, you would do worse than finding a condo for rent. Phuket is an exciting location in the world of Real Estate, with ample opportunities available to the discerning buyer. Despite this wonderful opportunity, there are a handful of points that you need to keep in mind if you want to be a successful landlord.
Buying a rental property in Phuket ought to be a profit-filled experience…but you have to make sure that you’re doing things right! To this end, we put together an overview of the 7 things to keep in mind, before you splurge on an investment property.
Let’s start by examining the costs. Just how much profit does a house for rent, Phuket, actually make you?
7 Hot Tips for Buying Rental Property in Phuket
Whether you are looking at condos, houses, or even a commercial property, here are our hot tips on maximising profits when buying Phuket investment property.
1. Budget your Costs Accordingly
It sounds simple, but lots of people buying a rental property in Phuket underestimate the costs involved. The best way to work out the costs is to start at the end and work your way backwards. So, this means working out what ROI you would want, should you buy a house for rent. Phuket is an up-and-coming area, so using the 50% rule to work out your potential net income is one of our hottest tips.
What’s the 50% Rule?
It’s easy, honest! Calculate the total running costs; taxes, maintenance or repairs, property management service fees, insurance, and any other costs per month. When calculated, does the amount spent on on-going costs of any potential Phuket investment property exceed 50% of the rent? If so, let it go and look at alternative Phuket properties.
2. Research, Research, Research!
When establishing a condo for rent Phuket, or finding some buy-to-let property, you need to research all aspects of your purchase. Read up on the area, find out what other landlords charge. Look at taxes for your property, do you want to employ a property management service? What are the rates for this when you buy a house for rent in Phuket? Only when you can answer any question about the area, or your proposed property, should you commit to buying.
3. Get Professional Help
Never be afraid to seek out an expert property agent from the area you are buying in. For example, if you are buying a rental property in Phuket, an estate agent will be in possession of all the knowledge you could ever need about the city. They will be able to inform you which areas are friendliest, which have the highest ROI for landlords, and can keep you abreast of any hidden fees or taxes. When you work hand-in-hand with a professional agency, you are never left second-guessing yourself.
4. Choosing your Phuket Rental Property
Choosing the correct condo for rent or house for rent in the city is a must. If you get it wrong, you will end up with an ongoing property that drains your finances with limited return. Do it the right way, and you could be making passive income, forever. There are technically two types of Phuket investment property rentals. You can choose to manage your property yourself, or you can be a part of a managed condominium.
Buying the right Rental Property in Phuket
First and foremost remember that you are not buying to live in it and instead will make the condo for rent. Phuket is filled with properties whose landlords personally loved the property they bought but may not have been the best investment rental property. If buying into a managed estate or building check it is being professionally managed and has good facilities nearby, and if the location is good, you can do well for yourself. Another hot tip here is to ask your agent about any distressed sales currently on the market or due to come on the market which will further help improve your ROI.
Buying a Managed Condominium in Phuket
This second type of investment property allows you to buy into a new development, where you will either receive a fixed percentage return based on the property purchase price or receive a percentage of the rental income after deduction of all running costs. This guarantees rent for you on an annual basis but gives you a lot less control over your building. This method works for condotels too, as they operate by similar means.
5. Who Will Manage Your Property?
If you choose to buy into a managed condominium, then this choice is taken out of your hands. However, if you have your own Phuket investment property, you could manage it for yourself. Extensive experience in the Phuket property management sector has taught us that you can achieve better return for your money if you engage with an estate agency to manage your Phuket investment property. This is especially true of the many landlords in this region that reside overseas themselves. Hiring a firm to manage your property on your behalf is sensible in most cases.
6. Get Rental Ready
Don’t expect to buy a property and start renting straight away. You will need to account for any work required to take the property up to the standards expected of the neighbourhood you have bought your house for rent in. Having curb-side appeal, a good range of amenities, and a polished interior, will all work in your favour when it comes to finding tenants. So don’t ignore this after purchasing your investment. You don’t have to spend a fortune, just make sure the property has all the basics and presents well. This article, from House Beautiful, has some great ideas on how to decorate as a landlord.
7. Watch your Hard Work Pay Off!
If you have managed to follow our hot tips for buying a rental property in Phuket, then you should be able to start raking in the profits, momentarily. Keep in mind that it does take a lot of hard work if you aim to do all of this yourself. That’s why we advise you to find an expert rental management company to help lessen your load. Renting houses and condos in Phuket is a great way to make excess income if you can get the balance right. The good thing about calling in the pros is that they already know how to make you the most money.
Need a Phuket Based Real Estate Service?
We have years of experience in providing excellent property management services, as well as excelling in estate sales. You can come to us for everything from buying your property, to full-time management of said property. We provide an end-to-end service that aims to make you the most profit possible. Interested? Contact us now for buying, selling, renting, or property management and we will be pleased to help. Phuket investment property could be making you money in as little as a few short weeks. Can you afford to pass the chance by?