Europe or Phuket real estate: what is more profitable
Phuket real estate market promotes a new trend. Today developers offer projects with a guaranteed rental income. How does it work? The developer building apartment complexes, then set up a management company or hires a famous a hotel chain, for example, Sheraton or Movenpick, which attracts tourists.
The average rate of guaranteed income in Thailand and particularly in Phuket come to 6-8% of the purchase price yearly. But as usual not everything is so simple. Before you invest in a project, it is necessary to examine all details and calculate the real profit, which depends on dozens of factors.
Management company will pay you the negotiated annual amount but you keep in mind that you are in charge for all additional costs: taxes, maintenance and repair expenses, different funds. Even your decision to include a package of furniture and accessories to the selling price or not will affect your final profit.
It is mandatory to examine the contract with the management company properly, pay attention to its duration, payment terms and conditions, possibility of extension. Do not forget to estimate liquidity of the selected object, in other words, if you can quickly and profitably sell it if it is necessary.
If you make an effort, you will be able to find very reliable and profitable offers in the current Phuket real estate market. For instance, some management agencies assume responsibility for all financial matters and owners do not need to pay anything to keep the unit in a proper living condition. Moreover, in Thailand there is no annual property ownership tax and as a result, the net income of the investor turns to 7% per year in the Thai currency. To be honest, you will never get such a high profit renting out a property in Europe.
