Rental property investment in Thailand : A safe real estate option & a short guide for potential buyers

Home Blog Rental property investment in Thailand : A safe real estate option Short guide for potential buyers.


Posted on September 9, 2015

In Europe, the lack of interesting opportunities and the economic crisis make potential investors very cautious. It is time to consider investing in property on other continents, in particular in Asian countries. 

There are many good reasons you should consider a rental property investment in Thailand:

- There is no property tax and no inheritance tax. There are no confiscatory taxes of your assets!

- The real estate prices in Thailand are very attractive and owners can expect better rental yields compared to other foreign countries.

A net return on investment (R.O.I) of 6 to 8% and a property appreciation of between 5 and 10% per year depending on the location.

- Buying a property in Thailand is a straightforward and hassle free procedure if you choose a professional real estate agent and legal firm to represent you.

- The beauty of its landscapes, the mild climate and the friendliness of its people are good indicators of Thailand’s high quality of life for those who wish to live or invest.

All you need is having some basic knowledge and receiving the right answers to your questions and Thailand will open up to you!

How can a foreign national own property freehold in Thailand? 

A foreigner is only able to own condominiums outright in their name (100% freehold). No other type of property can be owned this way. This is possible under the Condominium act which stipulates that a development with a Thai Condominium Licence may sell 49% of the saleable area of a given building to non-Thai nationals under a Freehold title, the remaining 51% of the given building may only be leased for a term of 30 years or sold to Thai nationals as Freehold. 

If a foreign national has set up a Thai Limited company he/she could purchase a condominium in Thailand in the company name as a Thai freehold title. It is also worth noting that even if the development is a condominium block, unless the developers have applied for and obtained a Condominium license they cannot sell any units freehold to non-Thai nationals. Some villa developments in Thailand may advertise freehold ownership but as this is not possible under Thai law it is recommended to read the small print as to what they actually mean by this and have it verified by a lawyer.

As a foreigner, can I buy land i Thailand in my own name? 

As a foreigner you cannot own land in your name. You can purchase land in Thailand through a Thai limited company or you can lease the land for 30 years usually with a further two 30 year periods. 

I do not have a bank account in Thailand so how can I make payments to purchase a property? 

Usually when you purchase a new property in Thailand especially a Freehold Condominium, it is advisable you pay directly from your bank account in your home country directly to the developers’ bank account. 

In order to obtain a Freehold title you will need to show the local Land Office that the funds used to purchase the property have been transferred from abroad. This is provided by the Foreign Exchange Certificate (FEC) which is issued by the developers/Thai bank once the funds hit Thailand for transfers over 20,000 USD. These FECs need to be kept and presented at the land office upon transfer of the title deed. It is very easy to open a bank account in Thailand and it is possible to pay for a property, even a Freehold property, from a Thai bank account after transferring money from abroad to your Thai bank account.

A few tips for the purchase of an off-plan property: 

- Enquire about the credibility of the developer, his solvability, his background and his experience.

- Verify whether the developer has been granted the "condominium license", essential for a condominium development.

- Ask about the price of the condominium maintenance fees. They are often low in the first year but the amount of charges can quickly grow if the residence is not well managed.

-Some developers who find it difficult to sell their project offer extremely high rental guarantees! Beware of unrealistic guarantees!

As everywhere in the world, nobody can predict in advance what will happen in 2 or 3 years in Thailand in real estate. A good indicator is that despite the political problems and changes of government, the return on investment and property appreciation rates have never diminished.

As you know, real estate is all about location. An apartment on the islands in a high end and modern residence with sea views or a very nice apartment in Bangkok close to the BTS will always rent out and sell easily!