To ensure maximum reliability and profitability of investments, experienced investors usually distribute the so-called investment portfolio into several parts.

This allows you to receive income immediately, have long-term profitability programs, increase profitability through long-term projects, using installments and credit funds, increasing the liquidity and maneuverability of asset management.

We divide investments into 3 parts. In different objects. On different beaches. For example, let’s invest 500,000 dollars:

1. • 150 thousand in a finished project, which provides a guaranteed income from the developer of 7% per annum
   • 200 thousand in a project under construction, where, according to our estimates, there will be maximum price growth and high occupancy and profitability due to the quality of the project, location and level of the hotel operator
   • 150 thousand in a promising pit. Better in different locations.

There are no escrow accounts in Thailand, the market is just forming, there are many new players, sometimes developers have difficulties with paperwork, so we prefer to invest most of the funds in finished and under construction projects. It is more reliable.

In addition, in these cases, you start receiving income immediately, you do not need to wait 2-3 years for the foundation pit (3 years, because they start selling it on the pre-sale at the lowest possible prices a year before the start of construction and receiving the necessary documents). Here, the benefit often lies in the fact that you do not need to invest all the funds at once, the first payment is 20-30% and staged payment as the object is built, which allows you to receive a higher income on the invested funds.

You also need to understand that in the first and second cases, you do not need to worry about how to receive income, a professional hotel operator does this for you if you have chosen a property in which it is available. We select only such ones for ourselves.

In the case of a pit, you will need to sell it yourself. You need to know this, in this case you will have to spend time and money on advertising or pay a commission to an agent. However, in the best projects on the pit there is also an opportunity to join a shared income program. You just need to make sure that it is there and find out who and how will do it. And how much you can trust it. We select the best.

The level of income directly depends not even on the developer, but on the hotel operator and its capabilities. Therefore, we give preference for investment to projects with large, well-known professional hotel operators. They have greater opportunities to fill the facility with lower advertising costs than service agencies.

Our life hacks:

• If funds allow, we try to take 2 adjacent units with a door in the wall (or on the balcony) – this gives the opportunity to rent them out in season at a higher price as a large apartment.
• During the high season in Phuket, there is an acute shortage of large apartments. There are many studios, but not enough large apartments. This also increases the opportunity to earn money on the growing demand. You put one apartment up for sale at a high price, the other allows you to continue generating income.
• When you invest in 3 different properties, you have the opportunity to sell where prices have risen the most, getting the maximum profit, and in other projects calmly wait for prices to rise and the most convenient moment to lock in profits.
• Another life hack – if possible, we try to take apartments with Pool access. This is direct access to the pool directly from your room. These are the most liquid properties in Phuket now. They are the first to be bought and provide an additional income of up to 40% higher than regular units. There are few of them and they are being chased. They are a real hot cake – they fly away first. In The one there are 4 left.

Apartments reach their maximum profitability in 5-8 years, experienced investors try to sell them at the peak in 7-8 years and invest in a new property. Then aging and renovation begin, new attractive properties appear, pulling demand. Although, given the fact that there is no more land for development by the sea in Phuket, the growth in value in the best properties by the sea can be greater and longer.

I emphasize – in the best. Not all pits are successful and equally good, so it is so important to choose the right one.

Here, too, not everything is so simple. Not all objects are the same and are capable of bringing good profit. It greatly depends on the quality of the location – the popularity of the resort and the level of solvency of tourists. For example, Karon is a mass resort and here the occupancy rate is high during the season, but the occupancy rate drops sharply in the low season, because of this the profitability is on average lower than in Bang Tao – this is a more prestigious resort, wealthier people come here, they come all year round, prices and income are higher here.

The quality and distance of the object from the beach also greatly affect the occupancy rate and profitability. Tourists choose objects on the first line 50-300 meters first. 500-700 meters in the second, objects at a distance of a kilometer and more are much less popular and less promising in terms of income, if they do not have other advantages.

Now they have started building many properties in Bang Tao, located 2.5 – 3 km from the sea, and the developers assure that everything will be fine, enticing us with a low price. We do not buy such properties for ourselves, while there is an opportunity to buy closer. It is generally considered that a popular property should be within walking distance – up to 700 -1000 m from the sea. There are exceptions, for example, near nature reserves, where construction near the sea is prohibited and nothing is built closer than 1 km, and the beach is in the top 5 in Asia. For example, The one.

Sometimes developers are cunning and indicate 900 meters in a straight line on Google Map, be careful. Check if it is really a walking distance – it happens that the stated 900 m can turn into 1.5 and 2 km due to the winding roads between the Laguna lakes and the buildings of Karon, the lack of a direct road with access to the sea, and this is a completely different story. Tourists always look at reviews on websites and listen to the recommendations of tour operators and prefer the sea nearby, since they came to the sea.
 

Tourists quickly learn about this and such objects are ultimately less popular. It is also important to have shops, restaurants and massage parlors within walking distance. This is not available everywhere.

That is why we do not take for ourselves objects that do not have a hotel license and a good 5* hotel operator. In them, too, you can get income, but it will be noticeably lower.

Note the key here Guaranteed.

Developers, trying to lure you to themselves, often quote 10%, 12%, 15%. This is not a guaranteed, but an estimated yield – this is something completely different, it can also be and is in the best properties. But without guarantees. And not for everyone.

They often modestly write “from 6%”. The preposition “from” indicates that the developer does not plan to pay you a guaranteed income on their behalf. This is like the average in a hospital.

Guaranteed – what does this mean?

In my memorandum to the Sole Mio agreement, a specific amount of payments per year is specified, calculated as 7% of the purchase amount, which the developer undertakes to pay regardless of the circumstances. The second most important part is what will happen to your property after this period?

As a rule, almost everywhere there is a program for obtaining a shared income. It is called a rental pool – more often 60/40, less often 70/30, very rarely 80/20 from the profit, after deducting expenses, sometimes 40/60 immediately from the income, this happens rarely. For example, in Mont Azure. But the most important thing is that until this happens, no one knows what the real profitability will be and it strongly depends on what general expenses the operator will show. Therefore, you need to understand the quality and capabilities of the hotel operator.

There are operators in Laguna who include their huge expenses for advertising and infrastructure maintenance, and even with a normal distribution of shares, the income is very small. We try not to offer such for investment.

Today, we have selected for ourselves and recommend you to work on this strategy:

• Sole Mio – Bang Tao, 200 meters from the sea – ready, commissioned, accepting clients since November 1
• Sea Heaven – Nai Thon – 50 meters from the sea – 20 apartments left in phase 1. Completion in November
• WyndHam La Vita – Rawai 400 meters from the sea, ready, 80%/20% income sharing
• Layan Green Park – Layan, 700 meters from the sea, a few apartments left in phase 1
• Wanda Vista Laya Resort – Layan, Laguna – 400 meters from the sea, delivery 1-3 months, 80/20

Here we select properties under construction that, according to our estimates, will provide the highest estimated yield after the completion of the guaranteed income program.

In other words, these are the best and most reliable investment projects capable of generating maximum profit in the future due to their unique advantages in the most popular locations. It is not always possible to buy a good finished property, they are often completely sold out at the construction stage, sometimes even at the excavation stage. For example, I invested in the last 2-storey residence MontAzure, they were sold out six months before the start of construction and now they are not available for purchase, although there are studios available in the hotel program. But this is completely different.

Investment properties in Phuket come in two main types and their combination:

These objects are attractive primarily because the period of freezing of funds until income is received is reduced. At the foundation pit, while you are waiting for the construction to be completed, you do not receive any income. We can say that your money is frozen for the construction period. But this is not entirely true. Firstly, you fix the minimum price and during the construction period it grows. Secondly, usually at the foundation pit stage you can get an installment plan and in this case only part of the money is frozen. In each case, this is a complex calculation of the parameters that are most convenient for you for your purposes.

In the case of the second investment strategy, you can start receiving income much earlier.

For example, in Wanda Vista Laya Resort in 3-4 months, and you can earn on the growth of prices from the sale of a finished object by entering the project at the construction stage. This is called “working with short leverage.” There are buyers who buy only finished goods and you can get additional profit here due to this. The prices here for almost finished housing are the same as in the nearby Green Park phase 2 on the pit, which you will have to wait almost 2 years. 184,000 baht and 170,000 baht per square meter, respectively.

In other words, the second strategy is to carefully select specific best investment properties for generating long-term income, which are more reliable than a pit and more profitable than a guaranteed income.

The best properties that we have selected for ourselves and recommend you consider:

• The One – Nai Harn, Beach No. 5 in Asia, 5* project, 5* operator, 16.3% financial model
• Sea Heaven 1 phase – Nai Thon, 20 meters to the beach, 5* operator, almost at the prices of the pit
• Wanda Vista Laya Resort – Layan, 400 meters from the sea, almost ready, 5* operator, 80/20
• Layan Green Park phase 1 – Layan, 700 meters, almost at pit prices

There is an opinion that everything is simple here – you bought a pit and – “you’re in the bag!” In fact, everything is not so. There are successful projects that take off, and there are unsuccessful ones. The pit rule works in Moscow, where it is easy to evaluate and calculate profitability based on distance from the metro, comparison of secondary prices and fairly accurately predict profitability. In Phuket, it is not so. Profitability depends primarily on the quality of the property itself and not on the stage of entry.

The Phuket real estate market is not yet fully formed, so it is impossible to accurately calculate the potential profitability of a property. There is simply nothing to compare with – each property is unique in terms of region, beach, distance from the sea, surrounding views, nearby infrastructure and the infrastructure of the property itself.

Properties differ in the number and size of swimming pools, restaurants, shops, quality of materials and implemented technologies, unique advantages and the very concept of development. By the scale of advertising support, its promotion in the agency network, star rating – 5* or 4*, quality and reputation of the hotel operator, if there is one. And the competitive environment – what other facilities are planned in this area and at what price.

Therefore, a thoughtful choice at the foundation pit stage is even more difficult.

Usually in Phuket during the construction period the developer raises prices in stages by an average of 40%. Then everything depends on the specific object – in some everything flies away at a higher price and there is a queue of people wanting to buy, for example, Mont Azure, Sunshine, Beachside, and there are other objects in which there is no such excitement.

It often happens that the prices at the excavation pit are almost the same as at the finished object. For example, in phase 2 and phase 1 of Sea Heaven and Green Park phase 1 and phase 2 the prices are almost the same. Why is that?

Because at the excavation pit you get a payment plan for the construction period, you do not need to invest the entire amount at once, but only part of it. And you expect that the developer will raise the price by another 40% and earn this amount during the construction period. In the best properties, this is what happens and even more, there was 50% or more growth last season. But here you have to wait 2 years without receiving a profit.

In the case of buying a finished property, you pay the entire amount at once and start receiving income immediately.

As a rule, the lowest price implies 100% payment. But often you can choose a more lenient option – 30% prepayment, the rest with installments for 1-2 years with staged payment as the construction and delivery of the phases of the object. The difficulty of working on pre-sales is that they are short and sudden and you need to quickly pull money out of somewhere in order to have time to enter at the minimum price before the start of sales.

Secondly, they are usually arranged when “the horse has not yet rolled around” in an open field – without documents (often when a building permit has not yet been received) and you need to have a fair amount of excitement or greed to buy this while nothing and wait for manna from heaven without receiving anything until the end of construction for 3 years. With a soft entry into the pit with a deferred payment, it can be interesting as part of an investment portfolio.

But the maximum profit is created not by the pit, but by a set of unique characteristics of the object that create increased interest and demand for it. This is first of all

1. The resort itself – The most prestigious elite and popular – Bang Tao, Layan, Kamala, Nai Harn, Surin, Nai Thon, Mai Khao, mass Kata, Karon

2. The first line of the sea, then 300-500 meters, 500 -700, 700-1000 m. Every extra 300 meters will significantly reduce the attractiveness and income

3. Star rating and quality 5 or 4 stars of the complex itself and the star rating and fame of the hotel operator

4. Internal infrastructure of the complex – the number and area of ​​​​pools, restaurants, fitness club, walking areas, green spaces

5. External infrastructure nearby – shopping streets, restaurants, massage parlors, large shopping centers

6. Competitive environment – large complexes under construction nearby and likely in the future if there is free land nearby

7. The unique concept of the hotel, its individual advantages, agency network, scale of advertising investments, professional team

The best objects in the pit, which we have chosen for ourselves and recommend you to consider:

• Sea Heaven 2 phase – Nai Thon, 20 meters to the beach, 5* operator Wyndham
• Layan Green Park phase 2 – Layan, 700 meters, large sports infrastructure
• Wanda Vista Laya Resort – Layan, 400 meters from the sea, under construction, 5* operator
• Layan Verde – Layan, Laguna – New mega project, mini city, foundation pit

Of course, the pits will remain, and perhaps even new offers will appear. But in November-December, most developers raise prices by 10%. Vip Venus Karon has already reduced the discount from 30% to 20%, Layan Verde 11/17 raises prices by 10%, The One announced a 10% price increase from 11/20. Other developers are doing the same.

There are too few of them left, and the flow of tourists in December increases sharply. The best in the ones under construction, for example, in The One will most likely also be gone before the new year. 75% have already been sold and sales are ongoing every day.

To get maximum profitability, you need to choose not only the most beautiful pit, but also make a purchase in a timely manner. This way you will earn at least 10% more in 1 month by buying before the price increase, where it is still possible.

Sincerely, Yuri. We prepare documents for the bank | help open an account | make a payment | receive confirmation.