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Phuket is one of the favorite destinations for many foreign property buyers, thanks to its proximity to other countries in Southeast- and East Asia.
You’ve probably not gone unnoticed that it offers a great quality and attracts many tourists.
Nowadays, more and more foreigners have opened up their eyes to the opportunities to earn some extra money on rental incomes in Phuket.
Today, I have Mike Lundin from phuketcondo.net with me. He’s the Online Marketing Manager and the Head of their newly launched Phuket Rental Management Service.
Phuketcondo.net is a reputable company that caters many foreigners who want to buy or rent out property in Phuket.
Let’s see what Mike has to say and how they help foreigners to rent out property.
Mike, can you please tell us a little bit about yourself and what you do at phuketcondo.net?
I came to Phuket, Thailand on holiday about 10 years ago, and I knew almost right away I wanted to live here full time. Who wouldn’t with the laid back lifestyle and beautiful beaches?
I joined the team at phuketcondo.net, one of the most successful and fastest growing property agencies in Phuket, at the beginning of 2015.
We specialize in the sales and rentals of condominiums or apartments on Phuket but we also have a rather large inventory of villas and land for sale.
Currently I’m head of our rental management service as well as manager of the online marketing team.
How does your team help foreigners to rent out property in Phuket?
Basically, our Phuket Rental Management Service helps foreigners (and Thais) rent out their property by taking over the whole whole rental process in return for a small commission of each booking.
We handle all the marketing of the property through various online travel agents and local agents, we handle the account management and all dealings with bookings and reservations plus all on-site work including check-ins/check outs etc.
Of course, all while making sure the property stays in tip-top condition.
Are there any restrictions or regulations that foreigners should be aware of, before renting out their property in Thailand? Are the regulations same for local Thai people and foreigners?
Some condos have regulations that only allow residential use of the units by the owners and prohibit you to rent out your condo. Since those regulations of the condo are basically made and amended by the owners of the units, you could try to change the regulations and put this on the agenda of the general meeting of the condo
You are responsible for paying land and housing tax each year, and the rental income is also subject to personal income tax under the Thailand Revenue Code.
Owners are free to rent out their property in Thailand as long as it’s not considered a business.
If you intend to rent it out as a business the requirements under the Foreign Business Act and Foreign Employment Act must be complied with.
You can get around this by hiring a company to rent out the property for you. We also have several condo units where the developer itself can guarantee up to 10% return per annum in rental returns as well.
Can foreigners rent out their properties during the peak seasons mainly/only (November – May), or is there a demand all year around? How does it differ between the months?
There is definitely a demand for holiday rentals all year round, and not only during peak season. Keep in mind that the target clients are not only western tourists and people looking to escape the winter. Thailand, and Phuket in particular, is a tourist hot spot for other Asian countries as well.
An experienced rental manager will know how to play around with the rates in order to maximize occupancy rate and the daily rate, something that can be hard to figure out how to do on your own.
How high are the rental yields in Phuket, compared to Bangkok or Pattaya for example?
No matter if we’re talking about renting or buying property, it’s all about location, location, location. You’re basically never more than 30 mins away from a beach no matter where you’re staying in Phuket, making the rental yields here very competitive.
Which areas in Phuket would you recommend to persons who are interested in buying a unit in a condo to rent it out?
The most popular tourist areas are still on the south west coast such as Patong and Kata/Karon, but the price per square meter at those locations is rather high.
The north part of Phuket, such as Bang Tao and Surin, is where you can find real bargains, and the area has developed a lot only over the last couple of years and is expected to boom even further.
As an added bonus, properties in the north is also much much closer to the airport compared to the southern beaches, something that’s likely to attract short-term rentals who don’t want to spend an hour plus in a taxi just to get to the villa/condo.
How often do I need to visit Phuket if I let you rent out my property? Do I need to visit your office or meet the tenants in person?
Usually it’s better for both parties to do an initial meeting and sign all the contracts when starting out a rental management relationship, but once that’s done you can visit as little or as often as you would like. We handle all guest relations and property maintenance.
The owner can of course still “reserve” the property for himself to stay there when visiting Phuket, as long as it doesn’t clash with current reservations.
Is there anything of importance that foreigners should be aware of before renting out property? For example, how to file rental income taxes? Any common pitfalls?
There are obviously plenty of foreigners owning property in Thailand hassle free already. Even though the process of owning a property and renting it out is pretty straight forward, Thai legal system can be quite complex at times. But there are good legal companies in Thailand to provide good consultation and legal services to property owners.
Thanks Mike. Finally, do you have any last words you want to tell our readers?
Condo prices in Phuket continue to rise steadily at 5 – 10% per annum and Phuket property prices in general have risen by 410% on average across the island since the December 2004 tsunami. There’s however still good investments to be made, no matter if you intend to purchase for residential purposes or to rent out.
We recommend everyone to contact us at phuketcondo.net if you intend to buy a condo or purchase property in Thailand, we’re happy to give you a free consultation and answering all your questions.