Tropical Villa on Koh Phangan – How to build your 2nd home in Thailand
Posted on May 29, 2013 in News and Blog: Real Estate
Thailand is well known for its rich diverse culture, delicious exotic food and picturesque beaches. So, what could be better than procuring your own piece of paradise in Thailand? Judging by the increasing number second homes being built in Thailand every year, it would appear not much!
Why is it, considering the current economic climate, that so many Westerners are deciding now is the opportune moment to build their second home in Thailand? Aside from the obvious personal satisfaction to be gained from owning a tropical villa, holidaymakers and investors alike are discovering the huge potential currently available on the Thai property market. With Thai real estate now a relatively simple process for Westerners to legally acquire, due to an amendment within Thai legislature, in conjunction with remarkable variety and excellent affordability, finding lucrative land or property is easily done.
Location is key to success in your investment
A wise decision regarding where to build your second home is paramount in order to safeguard and maximise your investment prospects. It is vital to scrutinise the pros and cons of each location carefully – bear in mind that your favoured holiday destination is not necessarily the ideal place to build your second home.
Don’t be reluctant to consider areas that you are unfamiliar with as you can quickly determine its suitability by speaking with local ex-pats and/or a reliable property agent. You may find it helpful to summarise your intended purpose or purposes for the property in a list ordered by relevance to abet a clear and concise approach in finding a secure investment with maximum potential.
Fortuitously, beautiful Phangan Island (Koh Phangan) encompasses something for everyone. Investors seeking to reap rewards by way of renting their second home to holidaymakers will be able to benefit immediately and almost effortlessly thanks to Phangan’s famous ‘full moon party’ which attracts in excess of 20,000 tourists per month. Conversely, if your primary intention is to invest in creating a tranquil villa as a family holiday home on Koh Phangan or as a retirement option, you will find yourself spoilt for choice. Phangan Island boasts numerous secluded white-sand beaches with natural coral reefs just offshore for snorkelling and world-class scuba-diving, traditional Thai markets and fishing villages, coconut farms, and rich natural forest containing breath taking waterfalls and meditative Buddhist temples.
With Phangan’s proximity to Samui Island in addition to the current developments underway to improve the sustainability, accessibility and entertainment choices, it is little wonder that Phangan is becoming an increasingly desirable location. Furthermore, investors can be reassured that Phangan will not become subject to overdevelopment, as so many islands before, thanks to 60% of the island being protected by the GNPT (Government National Park of Thailand).
Lucrative opportunities provided by the current economic climate
Thailand is already attracting the attention of leading economists, being labelled as the ‘Detroit of Asia’ (due to the rapid growth within the vehicle exportation industry) and ‘Brussels of the East’ (as Thailand has recently been designated to become the Asian Headquarters of Finance). When taking into consideration the expected financial power shift from West to East, combined with the aforementioned projections, it would appear as though Thailand’s economy is on the verge of flourishing into an influential power.
The current economic situation has led to Phangan’s property market becoming relatively cheap following a slump in sales. Smart investors are already jumping on these opportunities as it is anticipated that any purchase made now will double, triple or even quadruple in value by the end of Asia’s economic recovery. The increasing strength of the Thai Baht against the declining Dollar, Euro and Pound provide evident indicators of this.
Protect your assets through the right method of legal acquisition.
Wherever there is a genuine financial opportunity scams are always to be found. To protect your assets and future investment it is imperative to find legal representatives you can trust. You should familiarise yourself with the fundamental legalities of Thai real estate before approaching a reputable registered firm, agent or lawyer. Err on the side of caution if the land title deeds are not ‘Chanote’ or ‘Nor Sor Sam Gor’ or if an agent guarantees ownership of land or property in your name. Under current Thai Law a foreigner cannot legally purchase or own Thai real estate, legal acquisition is best formalised by one of the following methods:
- Purchase of a 90-year leasehold contract is by far the most straightforward and popular option. Although strictly speaking you do not own the land, you can sell the leasehold or upgrade to freehold at any time.
- Ownership can be ascertained by forming a company to purchase the land or property. You must then gain permission from the company to stay within the property.
- Entrust a Thai National to purchase the freehold on your behalf, they will gain ownership but you may draw-up a 90-year leasehold contract in your name.
In summary, provided all legalities are adhered to and documentation is in order, you’ll find that building yourself an affordable luxurious lifestyle with unbelievable investment potential is a straightforward, simple, surprisingly swift process.