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Phuket Property Guide: Is off-plan the right plan?

Phuket Property Guide: Is off-plan the right plan?

As with any financial decision, there are pros and cons to getting in on the ground floor. This is certainly true when buying a Phuket condominium.

propertyconstruction
By Thai Residential

Sunday 19 January 2020, 11:00AM


Buying a house, villa or condo ‘off-plan’ does bring a host of advantages. Photo: Sergey Zolkin / Unsplash

Buying a house, villa or condo ‘off-plan’ does bring a host of advantages. Photo: Sergey Zolkin / Unsplash

If you are buying a new build condo, the first time you see your actual unit may be months or years after signing the agreement. While you will get to see a showroom detailing how the unit will be configured and furnished, you are otherwise reliant on marketing materials and blueprints to make your decision.

Buying at this preliminary stage is therefore referred to as buying “Off-Plan”.

But what is it that makes off-plan purchases so popular?

The Early Bird

As the old saying goes, the early bird catches the worm. In the case of an off-plan condo investment, this means getting the prime choice of units.

The sea views and the high floors are generally the first to be sold, as are any units looking out over the swimming pool. If you are a foreigner being an early bird is even more important because only 49% of the unit area is available for foreign freehold ownership.

Getting your hands on these highly desirable units makes future resale easier because the best views will always be in demand.

Off-Plan Discounts

If the best choice of units is the “worm” for early birds, then the lower prices you pay is at least a tasty snack.

The prices offered during these early stages of planning/construction are sometimes too good to pass up. Sometimes there are extra incentives such as free furniture packages or an upgrade to freehold at no extra charge.

If you see your condo as an investment, rather than merely a home, you are also likely to see more immediate capital appreciation with an off-plan purchase because of these initial discounts.

Guaranteed Returns

Kvik Phuket

New builds often have attractive guaranteed return offers, which some developers will enhance for off-plan buyers. This may take the form of a higher annual yield, or a slightly longer time period on the guaranteed return (e.g. an extra year or two).

Staggered Payments

When you buy off-plan it is not always necessary to pay the full purchase price upfront. There will be a reservation deposit, followed by a larger payment a few months later, but generally speaking the payments are staggered for different stages of completion.

In fact, it is possible that you will have up to 24 months before the final payment is due. So not only is the price lower to begin with, but you are not required to part with the full purchase price upfront.

Customise Your Condo

When you buy off-plan, you are often given the latitude to change certain features of your unit before construction.

A choice of furniture packages is common to allow you to personalise the interior, but you may also be allowed to change the fixtures and finishings in the bathrooms or the kitchen to better suit your tastes.

Summary

A little vision and foresight is sometimes needed when buying off-plan, especially if the location is still a bare field or hillside.

But the discounts, ability to choose from the best units, and options to personalise the unit are key drivers for off-plan investors.

We will address the risks associated with off-plan Phuket condominiums in a future article, but for now let us just caution that the best legal guidance should always be sought when buying any property – especially one which has not been built yet.


This article is taken from the 2018/2019 Phuket Property Guide. To view the complete 2019/2020 Thai Residential Phuket Property Guide online, visit thairesidential.com/phuket-property-guide . You can also contact Thai Residential directly at Email: phuket@thairesidential.com or Tel: +66 9484 11918.

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ematt | 20 January 2020 - 19:10:29

Kurt - Step away from the keyboard!

Papa paul | 20 January 2020 - 18:14:55

Papa paul

DeKaaskopp | 20 January 2020 - 14:55:53

Wow,6 comments already.You should work in the "Real Estate Business".With all your knowledge you could easily take over the whole market here.

Kurt | 20 January 2020 - 10:29:27

And try to secure yourself about water supply guarantee. The future selling price of your property when you sell it will be also depend on water supply. Water becomes 'priceless' the coming years in Thailand as long 'private' water owners can shameless ask what they want to fill up your water storage tank by tanker.

Kurt | 20 January 2020 - 10:19:40

There should be a Thai off-plan guarantee fund in a Government Bank. The off-plan buyer deposit money in that bank, the developer/builder borrows money from that bank for building. After the building has been hand-over to buyer as agreed in contract, the developer doesn't need to pay back the loan to the. bank. Any failure means: Money back to the buyer.

peter rawai | 20 January 2020 - 08:46:14

Best way to lose your money is to buy off-plan, projects never completed or not even started once they collect your deposits
Ace condo's in Patong is a typically example of this type of scam

Kurt | 19 January 2020 - 17:07:14

One thing foreigners who intend to buy property off plan on Phuket is: If you get in trouble with buying off plan, sure the thai laws are not there in fever to help/protect you. You are just a foreigner who can off plan taken for a ride. No law protection. Years of empty court fun will be ahead of you. Be smart, not buy off plan. Check out Ace One plan in Patong.

Kurt | 19 January 2020 - 16:58:47

Good advice to foreigners who like to settle down in Thailand: Rent property first 1-2 years. Experience what is going on with your overcharged electric and water bill, etc ( Do you have water?) Learn about quality of construction on Phuket.

Kurt | 19 January 2020 - 16:50:53

Buying off-plan in Thailand is a gamble! For thai and foreign buyers, both. They have no protection in this buying schedule. Thai lawyers get rich of the disappointing off-plan buying happenings.  that are often turning out in simple thai scams.  Like to read how that Patong Ace project has been solved to satisfaction of the  off-plan buyers.

Kurt | 19 January 2020 - 16:42:44

This off plan add article is complete overdue in time.
Don't we all know about off-plan Ace project opposite Patong hospital /Buying off plan is a no go here!. Developers/sellers can in Thailand easily disappear.Nothing to fear from the 'thai law'. Seen over and over. Buyers have no protection.. Buy built property. Check or the house key fits, the toilet flushes, the lights, airco are...

Sir Burr | 19 January 2020 - 11:52:56

The "guaranteed return" offer is just tacked on to the original price. No way is a developer going to gamble with money from their own pocket. This is common knowledge.

 

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