Good rental yields are what attract most investors in Phuket. These yields can further have improvements when you work with a professional management company, especially since there are legal restrictions on short-term rentals owned by private individuals. Rental programs that allow owners to maximise short-term holiday rentals while earning capital appreciation for freehold ownership is even more attractive for investors.
Condotel and Hotel-Licensed Condominiums
A condotel is a residential concept that combines the features of a condominium and a hotel. This concept allows each unit for private purchase, which can be rented out as hotel accommodations. Condotels are built for the sole purpose of investments, making them unsuitable if you’re looking to own a holiday home. Since the unit is an investment property, its rental income is steady. Developers will often give investors guaranteed returns before transitioning into a rental pool. A rental pool will first be collected together before distributing the profits to all owners.
Since the developments tare privately owned, a hotel management company is necessary to manage the daily activities of the resort. Investors can benefit from these management companies that use their international reputation with their rental programs. Additionally, these properties can be legally rented out on varying lengths – weekly, monthly, or daily because of their hotel licensing. Since they are also condominium-licensed, they can be sold as a freehold to international buyers in Thailand. The great thing about it is that owners can freely use their units for a number of days yearly. If you want to capitalise on Thailand’s buoyant real estate market while taking advantage of the thriving tourism industry of Phuket, then it’s best to enter this market. Just imagine, you can earn on short-term rentals and still enjoy free accommodation while you go on a holiday in Phuket. It’s a win-win situation, really.
In the Phuket luxury market, one of the fastest-growing markets are the branded residences. While these properties are often regarded as luxury condotels, they offer more than just that. They are similar to condotels in the sense that they are hybrids of a condominium and a hotel. Foreigners can have freehold ownership, as well. The main difference is that the management is under luxury hotel brands, making them highly attractive to high-net-worth individuals.
Branded Residences are way above condotels, wherein owners can benefit from high-demands brought about by their affiliation with luxury hotel brands. Since the properties are synonymous with quality standards, these units can demand higher rental properties. While these schemes are pretty new, many wealthy Thai investors are catching on and investing rapidly.
Condotels and branded residences are a great way for foreigners to gain freehold ownership of property investments in Phuket. The hotel licenses give a steady income stream from Phuket short-term rentals – a scheme not available for condominium projects. Investors can also take advantage of professional management teams to reach out to the international market, so each home comes with the year-round occupancy.