Choosing a Rental Income Property
My wife and I attended the recent Phuket property exhibition in Hong Kong and saw many attractive properties. Our intention is to buy a rentable holiday residence, preferably new, although we are not sure where and which we may later come to retire in. Can you advise on how we should proceed in our search?
Your goals are common to a large numbers of those seeking to buy property in Phuket. A point to note is that such properties largely by nature within developments and not stand alone properties.
A good first step would be to spend time on the island traveling around
getting a feel for the different areas and how these appeal or best
suit your personal lifestyles. This in itself will greatly focus your
attention on those parts of the island that are most appealing to you
and therefore highlight certain developments. For example those favoring
boating may have a preference for the south and east, those who play
golf daily may wish to be in the centre or north. Those with children
may wish to be close by a school. Those to whom the beach is paramount
may likely be focusing on the resort towns on the west coast. Locational
considerations may be more important if your retirement is imminent
and you will spend significant periods of the year in your new property.
If however, short term holidays are likely to be a factor for several years to come and rental income is a major factor in your plans, then you may choose a location based upon more material concerns. Bear in mind what attracts you and most tourists to Phuket.
A great majority come for the beaches, food and nightlife. If you want to maximise rental returns year round, a choice which will attract this type of tourist will be important.
Pricing and rental return guarantees will be important in calculating rental returns. Pay attention to see if guaranteed returns are simply factored by a developer into higher asking prices. Many recent developments of medium scale are better at providing flexible rental solutions so that one is entitled to stay for as long or as short as desired and still put a property into or take out of a rental pool at short notice.
One increasingly important factor to add to those above, especially in light of the very many new projects being promoted is the quality of estate operations and how sophisticated it's management will be. Often the best rental performers are those where the developers have an ongoing operational relationship with a development. In such cases they have often given greater care to this factor is in the planning of the development and it's facilities as well as being very focused on the maximisation of revenues to the benefit of both themselves and owners.
Considering each of these aspects and seeking to blend each of the together to the fullest extent should enable you to have a basis for judging how successful a project is likely to be.