After seeing the same type of questions being asked by many of our customers, we decided it was time for Powerhouse Development Co,.Ltd to create an appropriate resource to answer these doubts. Here are some of the most common questions people looking to buy property in Pattaya tend to have:
What all do I have to pay when I’m buying a new condo versus a condo that was previously owned?
Buying a New Condo
- Taxes : Regularly 6.3%, however the Thai government in an effort to stimulate the economy has lowered the tax rate to 4.3% until the end of April 2016
- Maintenance Fees: this varies from building to building and is largely dependent on the facilities that must be maintained, ie. security, pool, garden, garbage, work on the building etc. The fees are typically paid yearly and calculated per square meter. Usually about 50 THB per SQM but can vary.
- Sinking Fund: This is a one time fee that is payable when one buys a brand new condo in Thailand. The sinking fund works like an endowment fund against disasters and other unforeseen major repairs in the future. It also supports the salaries of the juristic staff and other workers likely to be employed to keep the building maintained to optimum levels. The sinking fund is typically calculated on a per square meter basis and just like maintenance fees will vary depending on what the building offers as far as facilities.
- Installation of water and electric meters: This is a flat rate and ranges from 6,000 to 9000 baht for each to be installed.
Buying a Resale Condo
- Taxes– Regularly 6.3%, however the Thai government in an effort to stimulate the economy has lowered the tax rate to 4.3% until the end of April 2016
- Transfer Fees and taxes may be paid by the owner, the buyer, or they may be split 50/50 between both parties.
- Maintenance Fees:This varies from building to building and is largely dependent on the facilities that must be maintained, ie. security, pool, garden, garbage, work on the building etc. The fees are typically paid yearly and calculated per square meter. Usually about 50 THB per SQM but can vary.
Which is a better investment, a condo or a house?
Condos are easier to rent out, and usually will bring more steady rental income. This will increase the earnings on your investment combined with the land appreciation investing in a condo is a wise choice.
If you are able to get a condo while it is at presale price your investment opportunity can go way up. Presale prices are below market value and they are an incentive offered by the developer to enable them to build without going to the bank. You help the developer out with cash for building costs and they reward you with prices per square meter that can not be beat. This type of purchase requires diligent research on the part of the buyer, however a few calculated investments can make for some very healthy returns. In projects developed by Powerhouse Development Co. Ltd. we have seen units sell for 60,000 baht SQM only to be sold upon completion for upwards of 100,000 baht SQM. Not a bad return for one to three years by any measure.
Condo values tend to appreciate faster than house values. City centers build quickly especially when they pick up momentum and when cities begin rising into the sky so do their property values. The closer to the epicenter you are the more valuable. The golden rule of real estate investment, LOCATION, LOCATION, LOCATION. With condos you are more likely to get more sought after locations leveraging the almighty power of supply and demand in your favor.
How can I buy a house with a Thai Company?
There are three different ways to buy a house with a Thai company. Each way has it’s own advantages and disadvantages.
- Use a previous company and just change the director. This is the easiest and cheapest alternative, however not highly recommended. Prior to the directorship change the accounting must be checked as well as the balance. The total cost for this is usually under 15,000 THB.
- Set up a brand new company. This is usually a better option because you are not responsible for the previous directors accounting and balance which can lead to issues. Setting up a new company costs about 30,000 THB plus the name change. The taxes are at the discounted rate of 4.3% until April 2016 and the transfer fees are typically split 50/50 between the buyer and the seller.
- The last alternative is the least used and is only good for certain circumstances. A foreigner can rent the land for 49 years, commonly referred to as leasehold. They receive full power of attorney granting them rights to buy, sell or rent the land as if they owned it. This is easy and cheap but there are not many rights associated with this type of “ownership”
Why are the price of condos for sale less for Thai nationals than foreign nationals when it is the same unit in the same building?
We are right back to supply and demand. Foreign ownership is limited to 49% of any building making the supply limited, whereas Thai ownership must be a minimum of 51% and has no limit making the supply for Thais rich. To incent them to buy condos as investments the price must be cheaper for them.
What should I expect when I schedule a viewing for a condo I’m interested in buying?
Buying a condo is a bit more complex than buying a toaster oven, or a car. When you are buying things like cars and toasters or even furniture there is a showroom where you can go and look around and get an idea of price, and features, and what kinds of things will suit your wants, needs, and desires. You can browse for things without the help of a sales person and get a feel for things on your own. You can touch and feel the tangible product without the interference of a third party. This is quite a bit more difficult when would like to purchase real estate.
Yes of course you can do research online and you can gain knowledge about the market, however when you are making a purchase that could go into the millions you want to be able to touch it, and feel, it and see it, and make sure it is really exactly what you want. Whether you are investing in a property to yield rental returns, want a vacation home, or a full time residence it needs to suit your needs, wants and desires.
When you call, email or visit a property agent in Pattaya, let them know what you are looking for and how long you have been looking. Give them the information they need in order to really assist you in this investment decision. Be sure to find one that wants to ask you questions and be leary of anyone who has just to property in mind if they have not asked you a series of questions first. If they are too quick to show you something you should probably question their motivation, are they getting a bigger commission on this property or is this property really good for what you are looking for?
If you are in the beginning stages of looking and want to utter the phrase, “I’m just trying to see what’s out there” then be prepared for a lot of in depth questions from a good property agent. Yes they do want to sell you, but they also want to make sure they find a property that you will be happy with. Any good agent will want to take care of you because they will expect you to refer your friends to them after they worked so hard to find you the perfect property to invest in.
On day one expect the agent to gather as much information as possible because they are going to have some research to do for you. They should take your email address and email you 5-8 different properties that fit the criteria you have given them, price, location, size, amenities etc. You need to take a look at the properties and let your agent know which ones you are interested in viewing. Then your agent will contact the individual owners of each property to schedule a viewing for you to examine the condo.
This process usually takes 1 – 2 days. The inventory is out there, but there is a lot of coordination involved in setting up appointments in multiple locations, with multiple owners in the properties that will suit exactly what you are looking for.
A good property agent in Pattaya has to consider many things, where the condos are located, the traffic between condos at the given time of day, and the number of units the client wishes to view. The process for investing in property takes patience, and communication. Find a good agent that truly wants to learn what you are looking for and them team up with them to get the best deal on your next property investment in Pattaya.
Powerhouse Development Co. Ltd. has agents that speak many languages including Thai, English, Russian, Spanish, Dutch, and German and have many years of experience in international real estate sales.