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
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.