Phuket Villas – Buying, Renting and Selling

There is a type of villa rental plan that makes buying villas in Phuket appealing to overseas investors, whether they spend holidays there frequently or not. While you can find villas for sale that allow the buyer to stay for an unlimited number of days per year, most of the more recent villa developments have been constructed with investment returns in mind. Buyers of these Phuket villas can generally stay 30, 60 or 90 days per year, although you should beware of properties that restrict which time of year the owner can stay.

The rest of the year is turned over to a villa management programme and rented out to holidaymakers. Any days not used by the owner can also be given up for rental. This works well for those who holiday on Phuket but do not plan to stay long term and would like to see a return on their investment.

Having a villa with this kind of arrangement can ensure you have a relaxing holiday every year, as you are treated as a guest and entitled to all the same amenities as someone renting the villa. However, instead of paying to stay, you’ll be making money when you’re away. Some of these villas and developments even guarantee a specific percentage rental return for a number of years when first purchased.

 

It is important for foreigners thinking of buying villas in Phuket to look into the structure of the development they want to buy. Almost all villa developments in Phuket cater to foreign investors, and representatives can thoroughly explain the legal aspects of a purchase, which you should also have checked independently by a lawyer familiar with Thai law. Foreigners can purchase structures in Thailand but (except in the case of some condos) not the land.

In many cases where villas are set on individual land plots, the developer, for legal reasons, retains the title to all the land and you will most likely be restricted to a 30-year leasehold (with two extensions of 30 years each). Most developers set up a Thai company to hold the land and then give buyers shares in the company.

When buying a villa in Phuket, you should examine the background and track record of the developer, architect and construction company carefully. Some developers come to Phuket to make quick cash and may cut corners, and many have no development experience before coming here. Also, be wary of ‘off-plan’ developments, especially if the developer has no record of having previously completed projects. That said, since the global financial crisis, off-plan developments have pretty much disappeared as buyers are too wary to invest in such developments.

Thailand has somewhat of a reputation for a lack of transparency and honesty among certain business people, as well as a patchy enforcement of the rules by the authorities. The law is, in any case, rather loose, and offenders can buy their way out of trouble. Invariably, as a newcomer and a foreigner you will be at a disadvantage and many have been cheated in the past without fair support from the local courts. It’s very much a ‘buyer beware’ place.

You should examine carefully the rental management programme and facilities. Will they ensure your property remains kept up and desirable? What will they do to keep your villa regularly rented? If the management programme is not professional, you may wind up with more headaches than rental returns.

Location is another key factor when looking at buying villas in Phuket. For instance, while you may want something on the east coast because you value a quiet holiday; consider whether that is more important than the likelihood that renters want to be near to facilities and west coast beaches.

If there is a chance that you may want to stay longer than the allotted time, it might be better to buy an apartment or house, or look for a Phuket villa that allows year-round occupation by the owner. Some villa developments are charging very high prices for a place that can only be resided in for part of the year, and it is important to determine if you will see a return on investment. Remember, you can always give an agent the responsibility for renting out your villa while you are away.

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