Last updated May 30th, 2019.

 

A greater number of foreigners buy property in Thailand than anywhere else in Asia. There are several reasons why Thailand is now a top choice among real estate investors worldwide.

 

Located in the heart of Southeast Asia, Thailand has served a business hub for centuries. It was a buffer zone between 19th century colonial powers because of its highly strategic location. As a result, Thailand was the only place in the region that wasn’t colonized.

 

Thailand (and its property market) can still reap huge rewards from its strategic placement on the map today. Yet in different ways than before.

 

Its capital of Bangkok is barely an hour-long flight from four rapidly growing frontier markets. Namely Vietnam, Cambodia, Laos, and Myanmar.

 

These countries are among the world’s fastest growing and give Thailand easy access to cheap labor along with nearly 200 million consumers. Not even mentioning Thailand’s very own rising middle class and large population of 67 million.

 

Of course, the Thai economy isn’t just dependent on neighbors for growth. They have a rather solid economy too – at least compared to other emerging markets in the world.

 

You will find Thai exports at practically any supermarket in the world. While stores in Thailand stock themselves with products from Japan and the US, stores across Asia’s frontier markets fill their shelves with Thai exports.

 

Brands such as Red Bull (which as a little-known fact originates in Thailand) are sold globally as well.

 

If you open up your computer and read the label on your hard drive, it will almost surely have a sticker that says “Made in Thailand” on it. This is because Thailand is one of the world’s top makers of hard drives and memory.

 

Not only is Bangkok the most heavily tourist city on the planet (beating out Paris and London in Mastercard’s latest survey). It’s also one of the world’s biggest exporters of electronics and vehicles.

 

Besides manufacturing and exports, Thailand boasts a large services sector considering it’s an emerging market. The Thai startup community is also seeing rapid growth and great success in recent years..

 

These factors led to steady growth which has continued for about three decades, transforming Thailand into one of Asia’s most dynamic countries.

 

Naturally, this overall economic success extends to the Thailand property market too. A middle class which barely existed a few decades ago is now gaining prominence.

 

They’re capable of buying into the countless new condominium and housing projects that are under construction in Bangkok, Chiang Mai, Pattaya, and even Hua Hin.

 

Thailand’s capital of Bangkok is the most visited city in the world with over 20 million tourists annually.

Thailand’s capital of Bangkok is the most visited city in the entire world with more than 20 million annual tourist arrivals.

 

Thailand’s property market also ranks one of Asia’s most popular among foreign investors. In fact, it might be the most popular.

 

Buyers and lessors from all over the world are becoming a part of Thailand’s real estate sector whether they’re working as an expat or are one of the thousands of foreign retirees living here.

 

Like everywhere else, Thailand has its share of problems. A military coup seized power in 2014 and are effectively still in place after 2019 elections. Freedom of speech and freedom of press records are not the greatest, to say the least, and the Thai education system lags behind peers.

 

But there are also many bright spots. The country is rather friendly towards foreign investment and almost anyone, even tourists, can open a Thai bank account in under 20 minutes. Property buyers deal with less bureaucracy in Thailand than elsewhere in developing Asia.

 

Here’s an example: Thailand ranks 29th of 190 countries in the newest Ease of Doing Business ratings, gaining ground on competitors Singapore and Malaysia. 

 

In addition, the country claims a strong reputation of bouncing back from tough times. There’s actually a name for it among economists… “Teflon Thailand”.

 

Over the past hundred years, 18 coups occurred in Thailand along with many recessions. Yet things still ended up better here than in any of its five neighboring countries, except perhaps Malaysia.

 

Thailand is undergoing severe changes under the current government and with a new king. If history is any guide, the nation’s property sector will outperform far into the future though.

 

Can Foreigners Buy Thailand Real Estate?

The business environment in Thailand is not as open as some other countries in Southeast Asia. Foreigners may only own up to 49% of a company… unless you’re an American citizen.

 

Americans can own 100% of a firm under the Thailand-US Amity Treaty, making it one of the few situations where owning a foreign company as US citizen is actually helpful.

 

Nonetheless, the process of forming a company under the Amity Treaty is bureaucratic and requires approval from multiple government agencies.

 

On the side of real estate ownership, foreigners can only own (at least easily) a condominium unit above the ground floor in a building where no more than 49% of all units.

 

Technically, Thai law permits foreign ownership of landed property if you are investing at least 30 million Baht (about US$950,000 as of mid 2018). But it requires special approval and there aren’t many known cases where permission was ever granted in reality.

 

Some people will tell you that you can purchase land in Thailand through a nominee structure. However, unlike in Cambodia, this is illegal and the Thai constitution specifically forbids it. The government has recently cracked down harder on Thai nominee structures.

 

Buying and Selling Thai Condos Off Plan

Many condo units are sold by the developer before or during the construction period. Buyers enjoy steep discounts by doing that, and the developer gets easier access to loans along with the ability to say their project is “selling out”.

 

It usually takes between three to five years for a condo building to finish construction from the time sales first begin. Because of this, there’s a market in buying Thai condo units off-plan and selling them at a profit when the building is near completion.

 

You can purchase and transfer the right to buy a condo unit after construction is finished. It’s not necessary to wait until construction finishes before offloading your property. Or at least its sales agreement.

 

To reserve a unit and sign the contracts, you often only need to make a down payment of 10% along with another 10% gradually over the course of a few years. Installments are payable on a monthly basis.

 

Across a period of several years, property values can appreciate significantly. There have been cases of people buying Thai condominium units off-plan and selling the contracts years before completion at premiums above 100%.

 

But it also has inherent risks. The worst-case scenario is that you must abandon the contract, lose your down payment and any installments.

 

That could theoretically happen if, for example, Thai property values fall substantially or you don’t have enough liquid cash available to complete the transfer. While the second scenario would be ones’ own fault, the first one happened en masse during the Asian financial crisis.

 

How Much are Property Taxes in Thailand?

A condo in Thailand doesn’t have an annual property tax payable on them. With that said, any condominium will have an annual management fee for the building’s upkeep, electricity costs, staff and cleaning.

 

It’s not a tax. Yet that’s still money you must pay every single year when owning real estate in Thailand.

 

The precise cost of a management fee depends on your building’s size, density, and standards. If you’re buying a mid-range Thai condo, expect to pay about 500 baht per square meter every year.

 

When transferring property, there’s a 2% fee based on its government appraised value (which should be lower than the price you paid for it). Typically, half that fee is paid by the buyer and half by the seller.

 

A stamp duty of 0.5% must also be paid upon transferring any real estate in Thailand. Stamp duty is usually paid by the seller.

 

However, if a property is sold within 5 years of being acquired then a “Specific Business Tax” of 3.3% is instead payable. If a specific business tax is payable, then stamp duty does not need to be paid and you’ll instead pay that higher 3.3% fee.

 

If you choose to rent out your property in Thailand, rental income taxes are extremely low as there are many deductions. Your exact amount of tax payable will depend on any deductions allowed.

 

More often than not though, rental tax isn’t greater than 5% and sometimes far less. If you ask most local landlords, they will probably say they don’t calculate or pay the tax and no one ever bothers them.

 

Is Buying Property in Thailand Safe?

Thailand has rather strong property ownership laws (at least compared to most other places in the region) and a secure, computerized title system. So you shouldn’t have any issues with the government.

 

If a problem is going to come up at all, it’s going to be from the condo development company, real estate agent, or seller.

 

There are about two dozen large property developers in Thailand with a solid reputation and many completed projects under their belts. You likely won’t have major issues with developers of this type – at least not a problems that they won’t eventually fix.

 

But you’re in more dangerous territory if you’re dealing with smaller companies. Any developer should have at least a completed project or two that was built to good standards with satisfied customers.

 

I strongly recommend getting a third-party inspector after your property is built and ready to be transferred. It’s rare for a condo unit to be transferred in perfect condition with absolutely no problems at all.

 

Thai inspectors will know what to look for and can add value worth far more than what you’ll pay for their services. If the inspector finds defects, the condo developer will fix them free-of-charge.

 

Almost all condo developers give a warranty period of at least a year or two. Yet they are eager to fix problems if you mention them when money is still on the table, before transfer occurs.

 

Best Places to Invest in Thailand Real Estate

Thailand is a rather large nation of almost 70 million people. As such, there are hundreds of cities, towns, and resort areas that you can purchase real estate in.

 

Keep in mind that foreigners may only own condo units which leaves out smaller towns and villages for non-Thai property investors. However, you still have many options elsewhere.

 

Bangkok, a city of more than 16 million people, is the capital of Thailand and the largest city in Indochina. If anything happens or business, economic, or political importance, it goes through Bangkok.

 

Chiang Mai, Thailand’s second largest city, also isn’t a bad place to buy real estate. But while a lot of foreigners are scooping up condos in resort destinations like Pattaya and Phuket, I think  investors should completely avoid tourist areas for reasons discussed further below.

 

Bangkok Skyline

The ever-expanding skyline of Bangkok and its Sukhumvit/Siam/Ratchathewi districts, as seen from above Lumpini Park.

 

Bangkok

For centuries, Bangkok has served as a main entry point for foreign traders and businessmen into Southeast Asia. While the city has obviously changed since the 1700s, its current status as one of Asia’s most important cities is no different. 

 

Bangkok is so large that several of its neighborhoods have their own “sub-markets”, each with their own norms, occupancy rates, prices and outlook.

 

Centrality and access matter more than anything. So buying a property in Bangkok’s suburb of Bangna is completely different than buying one in the prime-city center area of Lumpini.

 

It’s not practical to cover every one of Bangkok’s neighborhoods in a single article. Thus, only a select few areas will be mentioned. General rules exist for buying property anyway in Bangkok though.

 

Real estate located closer to a BTS Skytrain station will be worth a premium as high as double or triple that of a similar property which isn’t. Condominiums located next to the MRT subway line also go for a premium, albeit not as much when compared to a BTS station.

 

A condo unit that’s located 100 meters from a central mass transit station is unlikely to be sold for below 200,000 baht per square meter.

 

When a condo building is located 500 meters away or above from a mass tranport station, the price premium is reduced by as much as half. It vanishes altogether for property more than a kilometer away.

 

Lumpini

As arguably Bangkok’s most exclusive area, Lumpini Park and its surrounding streets (Wireless Road, Soi Langsuan, etc.) are also some of the most expensive neighborhoods of the city.

 

New property developments on Wireless Road, for example, have been known to reach prices as expensive as 500,000 baht per square meter.

 

The reason for these high values is that Lumpini is incredibly central, yet also rather quiet and leafy. Streets are manicured while Lumpini Park – inner Bangkok’s largest green area – adds a sense of calm hard to find elsewhere in the CBD.

 

Wireless Road’s embassies help make the neighborhood safe, less noisy, and spacious too. The American, Vietnamese, and British embassies among others are all nearby.

 

But Lumpini is located between prime areas despite its relative serenity. Namely, the business districts of Silom and Sathorn, the commercial center of Siam, and the many dining options of Sukhumvit. You won’t ever have problems finding a BTS station in Lumpini, needless to say.

 

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Thailand Property

Mahanakorn, the tallest building in Thailand, is located in Bangrak district on Narathiwat-Rajanagarindra Road right between Silom and Sathorn.

 

Silom/Sathorn

Silom and Sathorn districts are where most of Bangkok’s finance institutions and multinational companies are based. As such, the areas are popular with both wealthy locals and expats who work in Bangkok.

 

Because it serves as Bangkok’s main central business district (CBD), prices are obviously high. Those who live in Silom and Sathorn enjoy easy access to the rest of the city center though. A variety of international restaurants and other amenities are always within walking distance.

 

Real estate values on the part of Silom that’s north of Narathiwat Road are among Bangkok’s most expensive. Yet prices become cheaper if you’re looking west or south of the Narathiwat intersection.

 

Sukhumvit

Sukhumvit is one of the longest roads in the world. It not only extends from Bangkok’s core to its outer suburbs, but eventually runs all the way to the Thai-Cambodian border.

 

However, Sukhumvit is more famous for its portion that lies in downtown Bangkok. Specifically from Nana up to Soi Ekkamai and its BTS station.

 

That strip of Sukhumvit is certainly Bangkok’s most popular expat area. Countless restaurants serving up everything international from Argentine to Japanese food helps Thonglor, Asok, and Ekkamai’s “hi-so” reputation.

 

Moving southeast along Sukhumvit towards On Nut, these Thai neighborhoods become much more local. You can own a condo located in outer Sukhumvit for under half the price of those  in its “downtown” section.

 

With all that said, suburban Bangkok is experiencing an oversupply of one-bedroom units. So you’ll probably do better buying a large condo downtown.

 

Victory Monument

Victory Monument is Bangkok’s transportation hub and center-most point.

 

Ratchathewi

Ratchathewi is arguably Bangkok’s most central district. They have three different BTS stations going through the neighborhood along with an airport rail near the corner of Sri Ayudhya and Phyathai Roads.

 

Furthermore, Ratchathewi district is directly north of the Bangkok’s commercial hub of Siam. It’s also directly west of Thailand’s political center of Dusit.

 

Despite these factors, prices here are lower than in other core locations. Occupancy rates in Ratchathewi are some of the city’s highest too.

 

The feel of Ratchathewi is a lot more local and you won’t find as many expats as you would in Sukhumvit or Silom. Yet the area is close to government offices like the United Nations and is just a stone’s throw from elsewhere in central Bangkok.

 

Victory Monument and the nearby Soi Rangnam in particular is Ratchathewi’s most desirable residential area. The King Power Complex, Bangkok’s biggest duty free mall, is on that street along with dozens of restaurants and stores.

 

Riverside

Some foreigners, retirees and second home owners in particular, choose to live on Bangkok’s Chao Phraya River. You can enjoy scenic views from luxury condos located on the riverside.

 

Generally, the west side of the Chao Phraya has lower prices. This is because of easier access to Bangkok’s central business district (CBD) from the east side.

 

Residents living on the river’s west side also must either drive across a crowded bridge or take a boat in order to get to Bangkok’s city center.

 

Bangkok’s river has malls, hotel branded residences, and some of the city’s soon-to-be tallest buildings being built on it right now. However, occupancy rates along the riverside are already low even without them.

 

In the meantime, both the public and private sectors are rejuvenating the area with countless developments of all types. Time will tell whether they can bring the river back to life.

 

Chiang Mai

Chiang Mai is Thailand’s second largest city, yet it’s significantly smaller than Bangkok with just around 2 million people.

 

As such, the sheer variety of condo projects you would find in Bangkok (remember: foreigners can only own condos in Thailand) don’t exist. Most local buyers in Chiang Mai live in houses or other low rise structures.

 

Nonetheless, Chiang Mai is one of Asia’s most popular small cities for retirees, entrepreneurs, and digital nomads in particular. Even though you’re unlikely to have well-paid tenants working for multinational companies.

 

Chiang Mai and its property market is arguably better for Airbnb and other short term rentals than Bangkok is. If you’re willing to put forth additional effort and don’t mind the hassles from essentially being in the accommodation industry, it could prove fruitful here.

 

Pattaya & Phuket

Our guides usually don’t include destinations we don’t recommend investing in. Yet due to the popularity of investing in Pattaya and Phuket, we’ll give an opinion on their real estate markets as a foreigner. Even if our opinion on these two resort cities isn’t a positive one.

 

People oftentimes come to Thailand as tourists, visit Pattaya and Phuket (among other places), and decide to buy a condo in one of these two cities.

 

There’s absolutely nothing wrong with buying real estate in Thailand most popular beach areas if you want to live here. Don’t be mistaken though: Real estate in Phuket and Pattaya is not the best way to invest in Thailand at all.

 

You may not lose money buying in Phuket – although that’s a distinct possibility as well. It’s just that tourist areas are too subject to “flavor of the month”.

 

Southeast Asia enjoys plenty of beaches. The sole factor distinguishing Pattaya from Kui Buri (a quiet beach 50km south of Hua Hin) is where people chose to live and vacation.

 

Pattaya/Phuket have off-seasons and are often plagued by low-occupancy rates. They lack the “staying power” of Bangkok which has multinational companies and a steady flow of well-paid expats.

 

Again, there’s nothing wrong with buying a condo in Phuket or Pattaya if you only want to live here. But the primary purpose of an investment is to make the most money possible with the least risk. Doing otherwise is a huge mistake.

 

Thai Condo

If a wealthy Thai who lives in Bangkok buys a weekend home, it’s most likely located in Hua Hin rather than Phuket or Pattaya.

 

Hua Hin

With everything said about Pattaya and Phuket above, most of those things don’t apply to Hua Hin. Perhaps you’re wondering why.

 

Hua Hin is much less built up than other Thai resort cities. It will probably stay that way due to the nearby Royal Palace. Most importantly, it’s also a lot better fed by local demand.

 

Take it from someone who got his business degree at Thailand’s best university and can speak Thai: the wealthy locals (there are more than you might think) love having weekend homes in Hua Hin.

 

Yet the locals are less likely to own real estate in Phuket which is too far away, or Pattaya which is too rambunctious.

 

Quite simply, if Chinese and Russians stopped vacationing in Pattaya then its property market would die. Hua Hin boasts a type of sustainability and domestic growth that other Thai beach destinations don’t.

 

Hiring Real Estate Agents in Thailand

Locals don’t always use real estate agents in Thailand. Instead, they often buy property either though developers directly or find resale units through mutual friends or online forums.

 

To a certain extent, real estate agents who sell Thailand property are a “western service”. They exist to make things easier for foreign buyers who don’t speak Thai while taking a percentage of the sales price as commission. 

 

That’s perfectly fine if you’re new to the market and need help. Just keep in mind that if you’re an investor, you’re immediately losing a few percentage points worth of profit when using Thai realtors.

 

Consider using a lawyer instead of a real estate agent if you need clarity regarding the transfer process. You can pay them a fixed fee instead of a fixed percentage of commission. 

 

If you’re buying directly from a condo developer, there’s no reason to find a realtor or lawyer if the company is reputable (specifically, if it’s listed on the Stock Exchange of Thailand).

 

Remember: it’s their job to sell you a condo unit in a country where realtors aren’t always used outside of major transactions. A developer will take care of the transfer process and everything else for you.

 

Thailand Property Investment Visa and Residence

It’s possible to get a one-year investment visa, renewable indefinitely, by investing at least ten million baht in a Thai condo.

 

You can also qualify though buying stocks in Thailand, bonds, mutual funds, or a combination of any of those assets. 

 

In fact, I’ve applied for and received a Thai property investment myself. Bangkok serves well as a regional base in order to travel to different frontier markets such as Cambodia, Vietnam, and Myanmar. Thus, I invested in Thailand and received a long-term visa.

 

With that said, Thailand’s investment visa is not the best residency program in Asia. Malaysia’s MM2H visa program is less expensive, simpler, and grants you more benefits. Meanwhile, you can live in Cambodia indefinitely and get a visa there for only $300 per year.

 

However, I didn’t go through the program solely for investment reasons. I bought property in Thailand because I enjoy spending time there. It’s a convenient hub considering what my job is, along with the amount of time I spend in frontier markets.

 

Is Buying Thailand Real Estate a Good Investment?

Thailand’s strategic location puts it an hour flight from four different high-growth economies. Specifically, those frontier markets are Cambodia, Laos, Vietnam and Myanmar.

 

Such a fact not only makes Thailand a great base for the Southeast Asia region,. It also benefits the Thai economy itself by letting them “piggyback” on less developed, fast-growing neighbors.

 

Property in Thailand might not have the best capital appreciation prospects in Asia (we believe this title belongs to Cambodia). With that said, the real estate market has proven very resilient over the past ten years or so.

 

Furthermore, Thailand’s Baht has been one of Asia’s top currencies. It has fluctuated even less than established currencies such as the Singapore dollar or Japanese yen in the past decade.

 

Property in Thailand, along with the nation’s currency and economy, has a rather low tendency to crash in a recession too. That makes it ideal for risk-averse investors who nonetheless seek exposure to emerging market assets.

 

Thai real estate values held their ground throughout the 2008 Financial Crisis. Prices have even doubled in certain areas of downtown Bangkok like Ratchathewi and Thong Lor since the coup back in 2013.

 

Interesting times lie ahead in Thailand’s future. Yet the nation’s economy boasts a long history of bouncing back and reinventing itself. This was true during times much more uncertain than now.

 

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About Reid Kirchenbauer

Reid Kirchenbauer is the Founder of InvestAsian. He's an international stock trader and property investor based in Thailand, Cambodia, and several other places. Reid manages the world's first and only frontier market real estate fund and has been featured in publications such as Forbes, Property Report, the South China Morning Post, and Seeking Alpha. You can download his free investment guide by clicking here.

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