What is the Average ROI for Property Investments in Phuket?
Phuket is one of the most exciting markets for property investments. It always has been, and not only because of its beautiful nature and landscape, but also because it’s one of the most visited holiday destinations in Southeast Asia. It’s always been popular amongst Australians, Europeans and Americans, and over the past 10 years the island has become very popular amongst Russian and Chinese tourists.
A large percentage of the visitors are interested in owning a holiday home in Phuket. That demand has brought a decent amount of supply of holiday homes over the past ten years, and more and more attractive properties are still being built. That supply has also increased the demand on the developers on the island to come up with attractive return on investment (ROI) opportunities through guaranteed rental returns in order to provide a handsome capital gain for the buyers.
Not too long ago, Phuket property developers came up with the great idea of having an agreement with international hotel chains to run their projects as a hotel when they’re completed. This increases the liability of the project as well as provides a good rental return guarantee to the investors.
Generally new Hotel Managed Developments offer 7% guaranteed yearly rental return to new buyers, commonly for no less than 3 years and some projects offer even up to 15 years of guaranteed income generated from renting out your property. Most developers also allocate around one month per year for the owners to use their property. The rest of the year it is being used as a hotel room, generating income for the owner.
Most projects have one condition on the owner in order for him to be able to join the rental pool, and that is that the owner has to go with the developers’ default furniture package and cannot change/personalize much in the unit.
That gives opportunity to the hotel management to rent the units out as advertised.
We’ve put a couple of good deals together here to give you an idea about the rental return possibilities through owning a property investments in Phuket.
Guaranteed 7% per year – 15 Years
This project is located in the hills of Patong beach. Consist of total 150 cottages. They guarantee 7% net yearly rental return for 15 years. There is no monthly fee, electricity, maintenance fee or sinking fund. After 5 years the developer offers a buyback option with the purchase price plus 10% interest rate. The first rental guarantee is to be paid by the developer one year from the final payment. This is clearly one of the best investment options on the island.
For more information: Patong Cottages
Guaranteed 7% per year – 15 Years
From the same developer as Patong Sea View Cottages, these cottages also offer the same rental guarantee of 7% per year for 15 years. The interior of the cottages are pretty much the same. These are slightly bigger which 60 square meter, and also these are in walking distance to the beach. Everything else and all the conditions are the same as the Patong Cottages.
For more information: Kamala Cottages
Guaranteed 10% per year – 5 years
This project is being built by Phuket’s one of the most popular developer who built numerous projects all over the island. They offer 10% yearly rental return guaranteed for first 5 years. Since it is located in Phuket’s most desired area Patong, it will not be so difficult to get all the investment back in 9-10 years time in total.
For more information: Patong Condo
Surin Beach Condo
Guaranteed 7% per year – 7 years
This is a fully completed condominium located in Surin beach, only couple of hundred meters away from the beach. They offer a great guaranteed return of 7% per year for 7 years. Since it is a completed project, the first payout will take place in March 2018. Surin is a developing area in Phuket. Now price per square meter is quite low. By the time the buyers collect their 49% rental return, the price per square meter will increase and it will provide a good capital gain at the end.
For more information: Surin Beach Condo
Maikhao Beach Condo:
Guaranteed 10% per year – 5 Years
This project is located on the Northern part of the island, and being developed by a local developer. They also offer 10% rental return guarantee for the first 5 years. It will be run by a 4.5 star hotel chain. Their prices make them one of the most affordable projects on the island. And of course to be able to get 50% of the investment back in 5 years is always make the deal sweeter.
For more information: Maikhao Beach Condo
Kata Noi Condominiums:
Guaranteed 6% per year – 3 years
This is a project that located in Kata Noi beach. All the units have sea view, and it is located only 500 meters from Phuket’s one of the most beautiful beaches Kata Noi. They offer 6% rental guarantee for 3 years. But more than what they offer, the possibility of maximizing the rental income is quite possible with this project just because of its location. The project is located in Phuket’s most desired area Kata Noi, which not too many accommodations available. Therefore this project actually is pretty unique when it comes to return on investment. Also it will be very easy to sell when needed just because of its location.
For more information: Kata Noi Condominium