Friday, August 6, 2010

Leasing Apartments In Phuket Almost As Good As Buying

Can leasing apartments in Phuket be as good as purchasing freehold? Many people believe so because there have been many apartments recently. Current Thailand law allows you to lease an Apartment for 30 years and have two extensions. This allows the purchaser to hold the property in their name for 90 years.

Freehold means that when you purchase you own the apartment in your own name. This is done by an apartment project in Phuket only selling up to 49% of the apartments to foreign owners. If a project is 50 units, the project developers would sell 24 as freehold and 26 as leasehold or to Thai owners. This sounds pretty complicated but setting this up is really very simple.

Leasing a piece of land is a very different story. In order to lease the land, it has to be registered at the local or-bor-tor office and it is a good idea to also register it at the land office. Some people like to lease land because they may not have to commit a lot of money. The terms can be to pay money every year. This can turn against the lease if he ever builds on the land and tries later to sell the property.

Leasing a property like an apartment is usually set up very different. If you lease through a real estate agent or broker they usually have a standard contract for a lease. Have a lawyer give you advise when signing a lease contract. This is to make sure your rights and interests are protected.

One big disadvantage of a lease is it might be hard to extent the lease after the first 30 years is expired. This is because the law reads that you must extend the lease every 30 years by the original land owner. It has even been know that original land owner may refuse the second 30 years lease even though they promised it in the first contract.

One option to leasing land was to set up a company and have the company own the land. In my opinion this option is no longer viable because the land offices are checking these shaky companies that have no purpose other than owning land. The door to owning houses or apartments in Thai companies is no longer open.

Apartments in Phuket can be bought freehold if you can find a property that is still freehold to buy into. Most properties like this are sold out under preconstruction and jonnie come lately has to pick at what units are left if any. If your plan is to purchase a unit that is 100% finished and ready to be moved it to you will find you will get the very worse units in the project. Even these units may not be available as freehold and leasing them may be the only option.

If the property investor is willing to take high risks, he can purchase a nice unit on preconstruction. The risk one takes if the project will ever start and more importantly, will it ever finish. If the project sells well and finishes within a year or two of planned completion date, the investor was lucky and has a nice unit to be proud of.

In closing, Apartments in Phuket can be a great investment if the owner is a careful shopper and weighs all factors when purchasing an apartment. Not only location, quality of construction and view are important. One must look at the ownership and the value that it will or may have 30 years down the road. Leasing in Phuket in lieu of owning an apartment unit freehold may be an option for the investor who is willing to take some calculated risk.
(ArticlesBase SC #422322)
Scott Riefler - About the Author:
Scott Riefler is an expert in Phuket Real Estate. He has written several informative articles. He regularly contributes articles on Phuket ApartmentsSign up for our free informative newsletter at: Phuket Apartments Newsletter