Phuket Property

[Ducati]

I am thinking of investing in a townhouse or villa in Phuket - 3 bedrooms ideal. Have considered The Residence at Surin/Bangtao in the 16m to 23m range. Purpose would be to buy either for rental or as a permanent residence should we decide to relocate there from Bangkok - if that is the case then we would need to be in reasonable proximity to BIS school.

Couple of q's:

- Any views on The Residence? They have a 8% guaranteed income deal (commitment for 5 years) if I decide to rent it out, which seems good.

- Should i be concerned it's in a low laying area only 700m from the beach?

- What other alternative developments would people recommend that fits the bill above - both price and proximity to school....based on our kids commute to school currently in BKK, up to 30 mins each way is acceptable.

- For resale eventually, where would you recommend?....

[taxin]

I am thinking of investing in a townhouse or villa in Phuket - 3 bedrooms ideal. Have considered The Residence at Surin/Bangtao in the 16m to 23m range. Purpose would be to buy either for rental or as a permanent residence should we decide to relocate there from Bangkok - if that is the case then we would need to be in reasonable proximity to BIS school.

Couple of q's:

- Any views on The Residence? They have a 8% guaranteed income deal (commitment for 5 years) if I decide to rent it out, which seems good.

- Should i be concerned it's in a low laying area only 700m from the beach?

- What other alternative developments would people recommend that fits the bill above - both price and proximity to school....based on our kids commute to school currently in BKK, up to 30 mins each way is acceptable.

- For resale eventually, where would you recommend?....

My advice is run a mile from any of these guaranteed rental returns, at the end of the day NOTHING is guaranteed when it comes to the volatile industry which is tourism. The real estate guys out there will hate me for saying this but they know its a fact.

The 8% (or whatever percentage they are offering) is loaded on the price of the property, YOU are paying for your own return upfront !! How else would they be so confident of being able to guarantee such a return ?

What they also dont tell you is that the 8% is "gross" before the usual deductions, 30% rental management fee, income tax, VAT, withholding tax, and so on... What happens is your 8% soon becomes more like 3%, not so good then is it ? The crazy thing in all of this is that YOU paid for the return in the 1st place !

Then there is the small catch that you are only allowed to stay for 6 to 8 weeks a year in YOUR own villa that YOU paid for. While these crooks go about there business renting it out, knowing that they only need to give you 8%, the 8% you have already given them !!

Dont do it, there are plenty of other developments in the area that are not pulling this scam. I have even seen some developments offering commission free rental returns.

As for resale there can only be 1 route, and thats buy freehold.

[ray08]

have to agree with Taxin, if you see a retn gurantee run away very fast , the person paying for it will be you , and by saying 8% return they are in turn jusifying the higher price ,as it shows a good return , if you really like the property and there is a rent gurantee , better to negotiate price down by informing owner that you do not require any rent gurantee ,just best price

[PadThaiGuy]

Renting it?

How will you control the situation from afar? Sure, they will rent it... but tell you it's vacant..,.... tell you its rented for way less than they are getting.....

They will screw you royally on half assed repairs, maintenence... and then act like your best friend when you come visit...

This is Thailand.. use your head.

I've done business here for years. Deception, lack of integrity/morals is shocking.

Edited March 7, 2008 by PadThaiGuy

[Ducati]

Let me clarify...

The rental deal is an option. First stage is I buy the property, and yes i will use my head to determine if the price is right or not.

Independently of that, I can then decide to have a managed service by the developers to rent it out at a guaranteed income of 8% a year (and yes, I get 28 days a year vacation myself). Wether the property is rented or not, whatever the price the developers rent it out (and sure, of course they will try to rent it out at a higher value, they are running a business, right!), I will still get 8%.

I have checked the contract and it seems ok. Charges are ok. I have a friend who has purchased in the same place is is renting, and is happy with the return, of course the main gamble is appreciation in property price...which is were my question remains...

what is the view of property appreciation in in Phuket...will oversupply spoil that?....will Phuket remain as one of the main island destinations etc.

And is the Bangtao area a good place to choose in Phuket?

[PadThaiGuy]

That island is getting trashed with rampant crass development, environment destruction, noise pollution, overpricing, gigantic billboards, bad attitude toward farang, aggressive touts, horrible ground transport service, zoning laws that let all-nite LOUD discos open next to hotels.

I would not invest there.

[kdbkk]

Too late. I already did and very happy when go and relax there every other month. Not really for investment but more of a get away home from hectic Bangkok. Bangtao is still very green and private, as well as in many other areas on the Island. Mine is in Kata Noi which is very green and peaceful and the beach is excellent. Never crowded. Patong forget it....

[lingnoi34]

The company that grants the rental guarantee will just go bankrupt and that's the end of it...

Rental guarantee are always a scam to get people to buy a substandard or overpriced porperty!

You wouldn't need a guarantee in the first place if the property could rent on its own merits.

LN

[jonniebkk]

You wouldn't need a guarantee in the first place if the property could rent on its own merits.

Very good point. Also, have to agree with PadThaiGuy...Phuket is like most things in Thailand...nice on the surface but grimy and sleazy underneath.

Like he sez, the island itself is getting trashed by rampant over development (like everyplace in Thailand) with everyone out to make a quick buck. There are mounting problems with all essential services and utilities, including water, sewerage/water treatment, trash, and even electricity. Not to mention the traffic and transportation issues. The island itself is also very mediocre as tropical islands go. A few decent beaches but not much more in the way of dramatic scenery or cultural attractions.

I would just find a nice hotel/resort you like and visit there for a few days to a week when you need a break but not invest in Phuket. If you want true island beauty and hospitality (along with just about all water sports activities and real eco-tours)...Bali kicks Phuket's arse big time.

[maori]

Yeah.I've been in Bali a week ago.What a SHIT PLACE!!!Beaches are ok but waves are so big.

Many developments,prices are cheaper...and no public infrastructure at all.

To invest to Phuket is still good idea.Especially to Richmond Group which has developed "The Residence" on Bang-Tao Beach.

[jonniebkk]

Yeah.I've been in Bali a week ago.What a SHIT PLACE!!!Beaches are ok but waves are so big.

Many developments,prices are cheaper...and no public infrastructure at all.

I wouldn't want to INVEST in or live full-time in either Phuket or Bali...both have serious infrustructure issues.

I am mainly speaking as a place to relax and have a great holiday. Bali has great sunning AND surfing beaches (my guess is you ended up at Kuta beach, which is the surfing beach (where large waves are a necessity). Sanur beach nearby is much calmer. Also, many nice beaches around the rest of the island. World class scuba diving which beats anything Phuket has to offer (including the Sims). Great restaurants and nitelife (not just tacky beer bars that infest most of the towns on the west of Phuket.

Dramatic 4000 meter volcanoes and eco trecks around them and true native Hindu/Balinese culture and crafts (not made-up "Thai" cultural shows like Phuket Fantasiea. Beautiful real rice terraces up amongst the volcanoes...not the rampant destruction of the hillsides you see all around Phuket. Plus size...Bali is a large island...takes a whole day to drive around it. Phuket you can circumvent in 2-3 hours!

For my money, I enjoy Bali much more than anywhere in Thailand...and I live in Thailand!

[maori]

Yeah.I've been in Bali a week ago.What a SHIT PLACE!!!Beaches are ok but waves are so big.

Many developments,prices are cheaper...and no public infrastructure at all.

For my money, I enjoy Bali much more than anywhere in Thailand...and I live in Thailand!

Yeah.I live in Thailand(Phuket) too.

IMHO Phuket is more famous tourist destination comparing with Bali.And its keeping developing this way.

From this point and also because of coming improvements in foreign investment policy by the new government I am still positive to say that Phuket is good field for investment.

[RAZZELL]

Mine is in Kata Noi which is very green and peaceful and the beach is excellent. Never crowded. Patong forget it....

I was there on Saturday and it was chock-a-block with Scandinavians, Russians and Italians.

Was like the Med (but less stylish )

RAZZ

[PadThaiGuy]

Yeah.I've been in Bali a week ago.What a SHIT PLACE!!!Beaches are ok but waves are so big.

Many developments,prices are cheaper...and no public infrastructure at all.

For my money, I enjoy Bali much more than anywhere in Thailand...and I live in Thailand!

Yeah.I live in Thailand(Phuket) too.

IMHO Phuket is more famous tourist destination comparing with Bali.And its keeping developing this way.

From this point and also because of coming improvements in foreign investment policy by the new government I am still positive to say that Phuket is good field for investment.

Just like Bali, terrorists will come to Phuket (sooner than later) and destroy the economy.

My prediction. A bomber goes down Soi Bangla some Friday nite and sets it off near the kangaroo Bar.

[maori]

They might do the same in Nana Plaza....Also Friday night

[taxin]

Yeah.I've been in Bali a week ago.What a SHIT PLACE!!!Beaches are ok but waves are so big.

Many developments,prices are cheaper...and no public infrastructure at all.

For my money, I enjoy Bali much more than anywhere in Thailand...and I live in Thailand!

Yeah.I live in Thailand(Phuket) too.

IMHO Phuket is more famous tourist destination comparing with Bali.And its keeping developing this way.

From this point and also because of coming improvements in foreign investment policy by the new government I am still positive to say that Phuket is good field for investment.

Just like Bali, terrorists will come to Phuket (sooner than later) and destroy the economy.

My prediction. A bomber goes down Soi Bangla some Friday nite and sets it off near the kangaroo Bar.

Here we go again, another tree hugging Phuket basher who never ventured as far as Bangla Road. Probably got done over by a bar girl.... from the Kangaroo bar !

Anyone who is considering investing in Phuket go for your life, dont listen to these people. Phuket is by far the number 1 place in Asia ! And anyone who has already invested in Phuket (like I did) then well done to you !!

Yes infrustructure is a problem but thats only becauae the Thais do things the other way round compared to its Asian counterparts, which is put the buildings up 1st then build the infrustructure around it later. Thats Thailand and this will not change, its no big deal.

[Nang]

Yeah.I've been in Bali a week ago.What a SHIT PLACE!!!Beaches are ok but waves are so big.

Many developments,prices are cheaper...and no public infrastructure at all.

For my money, I enjoy Bali much more than anywhere in Thailand...and I live in Thailand!

Yeah.I live in Thailand(Phuket) too.

IMHO Phuket is more famous tourist destination comparing with Bali.And its keeping developing this way.

From this point and also because of coming improvements in foreign investment policy by the new government I am still positive to say that Phuket is good field for investment.

Just like Bali, terrorists will come to Phuket (sooner than later) and destroy the economy.

My prediction. A bomber goes down Soi Bangla some Friday nite and sets it off near the kangaroo Bar.

They've been saying that for years but it's never happened. And anyway Bali recovered quickly from their bombs so there's no reason why Phuket cannot also recover quickly if it did happen.

[Badbanker]

A couple of interesting points to ponder:

Bali has still not recovered from the bombing!

Abu Bakir Bashir (head of JI) only today has been preaching that Indonesia need to put up signs so the maggots that wear bikinis do not corrupt the good muslim men as they look at Balinese beaches! He is begging people to go out with a bang on Bali again

Yes there is going to be a big bang on Bangla or Nana in the not to far distant future. One of my friends is a police man in Phuket. He spends his days looking for bombs on Soi Bangla, cause he knows there is going to be one real soon!

Living in Bali is like living in a constantly agro lifestyle! Hindu and Muslims do not accept you and there is a LOT of latent animosity to all westerners!

Phuket is more accessable and less agressive but it is fast becoming a MAJOR tourist trap.

Lots of other places in Thailand that are safer cheaper and more fun!

BB

[huggybear]

Yeah.I've been in Bali a week ago.What a SHIT PLACE!!!Beaches are ok but waves are so big.

Many developments,prices are cheaper...and no public infrastructure at all.

I wouldn't want to INVEST in or live full-time in either Phuket or Bali...both have serious infrustructure issues.

I am mainly speaking as a place to relax and have a great holiday. Bali has great sunning AND surfing beaches (my guess is you ended up at Kuta beach, which is the surfing beach (where large waves are a necessity). Sanur beach nearby is much calmer. Also, many nice beaches around the rest of the island. World class scuba diving which beats anything Phuket has to offer (including the Sims). Great restaurants and nitelife (not just tacky beer bars that infest most of the towns on the west of Phuket.

Dramatic 4000 meter volcanoes and eco trecks around them and true native Hindu/Balinese culture and crafts (not made-up "Thai" cultural shows like Phuket Fantasiea. Beautiful real rice terraces up amongst the volcanoes...not the rampant destruction of the hillsides you see all around Phuket. Plus size...Bali is a large island...takes a whole day to drive around it. Phuket you can circumvent in 2-3 hours!

For my money, I enjoy Bali much more than anywhere in Thailand...and I live in Thailand!

Balinese food vs. Thai food? Had enough of nasi goreng for a lifetime, no, from experience, I'd say Thailand is a lot better than Bali.

[kdbkk]

I love Phuket and hope that the tourists number stays low. I still find many areas on the island very peaceful and quiet. My place in Kata Noi is very nice and peaceful. Patong and the night life is not for me.

[maori]

With no doubts Phuket is very nice place for living,working,investing...

[steelepulse]

With no doubts Phuket is very nice place for living,working,investing...

No thanks to living in Bali.

Westkit, exactly why are you spamming threads with that link drop? Are you there SEO expert trying to get them free on topic links?

[neetz]

I am thinking of investing in a townhouse or villa in Phuket - 3 bedrooms ideal. Have considered The Residence at Surin/Bangtao in the 16m to 23m range. Purpose would be to buy either for rental or as a permanent residence should we decide to relocate there from Bangkok - if that is the case then we would need to be in reasonable proximity to BIS school.

Couple of q's:

- Any views on The Residence? They have a 8% guaranteed income deal (commitment for 5 years) if I decide to rent it out, which seems good.

- Should i be concerned it's in a low laying area only 700m from the beach?

- What other alternative developments would people recommend that fits the bill above - both price and proximity to school....based on our kids commute to school currently in BKK, up to 30 mins each way is acceptable.

- For resale eventually, where would you recommend?....

As a representative of the Richmond Group I would be happy to discuss your options further with you…

Firstly I have read the many responses throughout this thread and I have to agree yes Phuket is crowded with developers at the moment and that is why it's incredibly important to do your research before buying from ANY developer… Some questions you need to ask are:

- How long have you been in Phuket for?

- How many projects do you have?

- Do you provide your own internal property management?

The above to questions are vital in order to determine whether or not the developer is basically looking for a quick profit, or are committed in the long term to you, the owner. All too often you will find developers who will release one or two projects only and then contract a third party to arrange the property management for them after the construction in completed, basically washing their hands of you!

LOCATION Phuket is overcrowded with developers YES, however there are still many areas on the island which provide you with the privacy one would expect buying a property in paradise! If you look at the past records in an independent market research report (which I can provide to you if you like) for Phuket property sales in 2005 the area located between Kamala to Layan Beach was the most highly sought after… The Residence is right in the middle of this location so on a resale value you are very safe. Obviously ocean front villas are everyone's first choice, but with the capital growth set anywhere between 10% - 20% annually, over the years even these villas become unaffordable to most, which is why The Residence located 800 meters back from Bang Tao beach is perfect for investors and holiday makers… If buyers can't afford the beach front location the logical thing to do is look for the next best thing?

GUARANTEED RENTAL RETURN

I have read the responses such as

"The 8% (or whatever percentage they are offering) is loaded on the price of the property, YOU are paying for your own return upfront !! How else would they be so confident of being able to guarantee such a return ?"

My answer to this is simply again, if the developer has had a historical presence in Phuket this signifies that they have built up the brand with travel agents and/or holiday makers directly and by offering 8% they are in fact passing on their success to the owners themselves. Obviously as a resort we are looking to make some profit also however we also take the punches if the market plunges for unforeseen reasons… the owner has no risk here with the guaranteed return. YES your rental income will be subject to tax and we will tell you this up front, why would we lie about this if you are going to find out anyway? (Again… qualify your developer before you purchase with them)

The comments about the 8% justifying the higher price are true…… Richmond Group offer more services then a lot of other developments, for example The Residence is a fully operating first class Spa Resort, with Spa treatments rooms, Sauna's, Fitness center and on site café. We are also opening a Beach Club on Bang Tao Beach where owners and resort guests will receive privileged discounts. This all adds value when the time comes to resell your investment property…

Yes you can buy cheaper properties, but NO you will not receive the same rental return, and NO you will not receive the same capital growth.

Please let me know if you want to discuss this further

Cheers, Anita / Richmond Group