Off-plan properties are investments that promise some very alluring benefits, particularly the opportunity to invest in a property at a considerable discount. Despite this, however, such opportunities are not without risk.
We have created a basic guide for you with the pros and cons of getting involved.
An off-plan property is a property that has not yet been constructed. In many cases, the “property” will be little more than some land and plans, although it is also often possible to purchase off-plan properties at a later stage of their development.
Developers will often sell properties early during the development phase, to help raise funds in order to complete the project. The cheaper price when purchasing an off-plan property makes it a popular option in Thailand, and elsewhere in the world.
As you might expect, a ready to occupy property is one that has already been completed and is ready to move in to, and it could be a newly constructed property or an older one, but renovated.
This type of property will likely be more favorable to people who are looking for a home sooner. A lot of people will also prefer to invest in something that already exists as opposed to something that is not yet completed. While this method will be the preferred option for many people, it does have some disadvantages when compared to buying an off-plan property in Thailand.
Perhaps the main disadvantage of investing in an off-plan property in Thailand is that you are investing in something that does not yet physically exist and it means that there is a small possibility the building will not be constructed, leaving you with little or nothing left for your investment, that’s why it’s important to hire a real estate agent and lawyer to secure your investment.
Of course, laws in Thailand are in place to help protect potential investors against this to happen but investing goes with risks. You can also decrease your risk by taking precautions such as doing your due diligence on any developer you choose to deal with.
Another disadvantage is that it will often be some time before you get to use your investment. You will not yet have a property to live in and this will also likely mean that you will need to pay for another property in the meantime.
There is also the possibility of delays, leaving you having to pay rent for longer than you have anticipated.
Some people will be able to purchase an off-plan property and move in during the early stages of development. While this can answer the problem of having to pay for rent elsewhere, there are likely to be a lot of disturbances and inconveniences with workmen and equipment still operating.
The main advantage is that when buying an off-plan property in Thailand is that you will get to negotiate a considerable discount with the developers. This will be a considerable advantage for people that are looking for property at low prices.
Purchasing an off-plan property sometimes give you the opportunity to have a say in the fitting of your unit. This means you can have it created to your personal preferences, within reason of course. It is also more likely that you can get a good deal on furniture and other fittings.
A lot of people invest in off-plan property in Thailand to profit in the short to medium term. When making the investment they can do so at a considerable discount and, when the property is completed, it can be sold at the normal price.
This method is also not without risk because the property value can decrease, although rarely. It is also possible that the owner of the unit will struggle to find a buyer.
When investing in an off-plan property in Thailand you might notice that the contracts are somewhat less detailed than you would have experienced elsewhere. This does mean less security for the buyer, but problems are still rare.
However, Thai contracts are becoming more detailed after considerable exposure to investors from overseas but there are also some things that you should expect to see in your contract as a minimum requirement.
When investing in a pre-construction contract you should expect the following to be included:
The advantages of buying an off-plan property in Thailand can be very alluring, and many people do take advantage. It is also true that it is reasonably safe, but there is still a risk that something could do wrong.
With this in mind, we at Samui Exclusive advice you to purchase a property that has already been completed like a house, a villa or a condominium. You will still be able to find properties at great prices and your investment will be a lot more secure.
These articles might be of interest