Most of us have owned a property at one point or another. Purchasing a property in the home country is one thing, but making that leap into overseas property investment is another. To be honest, purchasing a property in a developing country is generally a more streamlined affair, albeit a fairly intimidating one if you don’t know the lay of the land.
One of the first attributes one must adopt when buying property overseas is humility. It allows us to really listen and allows us to let others with more experience guide us through the unknown.
The opposite of this is an assumption. Most of us assume we know what the real deal is through our own possible vast experience in our home countries – but to assume that things basically operate the same when overseas can be fatal.
Chances are you’ll be able to find a property in Thailand that’s right for you. If you’ve come this far, there’s a 99% chance you’ve already done a bit of homework as to what’s available and if it fits into your budget. Now comes the task of asking the right questions to filter out the deadwood and get yourself a proper short-list. Below are some really critical questions one must seek the answers to while enduring this process:
1. How is the local infrastructure?
Thailand’s Eastern Seaboard offers a variety of road conditions and access to decent utilities. Is the property easily accessible? Do you see potential for future roadworks that may drag on for years? Is the area known to flood? How are the electrical lines in the area (very subjective, of course)? How far are you from local area hospitals? Are you in an area that is frequently shut down for parades or demonstrations?
2. How is the infrastructure within the compound?
Whether you’re in a condominium or in a housing compound, check the water pressure, water pumps, back-up generators, elevators, parking facilities, common grounds, etc. for any faults or areas of concern that may require attention in the foreseeable future.
3. How does the community “feel”?
The general feel of a housing estate generally depends greatly not only upon the cost of the properties in the estate but also with how many houses there are. If you’re in a compound with hundreds of houses, expect a more detached feeling from your neighbours and little more anonymity. Typically there will be factions within the estate trying to take the maintenance in one direction or another at the annual juristic meetings. Smaller estates generally have more of a ‘community’ feeling to them where neighbours are more open and annual meetings are typically more informal affairs where decisions are made on more of a familial level.
The same can generally be said for condominiums. Large-scale projects with upwards of 1,000 or more condos will also have factions of co-owners who act as a group to move things in certain directions. Smaller condos generally have more intimate meetings and juristic committees.
4. What kind of construction standards are in place?
In years past, certain aspects of Thai construction were well known for their shortcomings. Electrical and plumbing are the first that spring to mind. Non-existent grounds, nothing to regulate spikes or drops in current, lack of U-joints in waste drains, leaky pipes and difficulty of access are just a few of the common problems experienced here in the past. Fortunately, for the most part, construction standards seem to have improved greatly in the past 15 years or so, both in house and condominium construction.
Checking the basic structure for leaks or areas for concern, fuse boxes for current regulators as well as ample fuses, septic systems where applicable and if it’s a new project, make sure you check out the developer’s previous projects.
5. Buying Off-Plan?
Anyone even somewhat familiar with the local property market can see that the big ‘push’ here is for ‘off-plan’ developments. Needless to say, this is definitely a case where you need to do as much due diligence as possible. Finding a local area broker who can offer you unbiased advice in this area is paramount.
When possible, meet the principal in the development company, or at least the sales director. Who are the people on his team? What experience to they have? Does the developer have a proven track record or is their first experiment in property development? If it’s the latter, you better have a good reason for taking the risk.
Check out their previous projects for quality, general upkeep, and maintenance. Try and find out what the original sales prices were and how today’s resale prices compare. How do these prices compare to what you’re being offered?
How are they financing the project? Have you seen a proper land title for the proposed project? What penalties are in place for late delivery?
If you’re being offered a guaranteed rental return, how are they guaranteeing this? Is this a net return to you? If not, what obligations do you have to maintain/repair during the rental period? How will the juristic committee be set up? What maintenance fees are there? What management company are they proposing?
There are a lot of questions that should be addressed when buying off-plan. Be sure your agent is working in your best interest.
Purchasing property anywhere in the world requires a ‘buyer beware’ attitude, but you can certainly do some damage control and go into the decision well informed. If you’re interested in purchasing a property in the Pattaya/Jomtien area, please don’t hesitate to give me a call.
By Stu Sutton
Stu Sutton is managing director of Jomtien Property and has worked exclusively in the Pattaya/Jomtien real estate market for 16 years.
Please feel free to contact him with any queries, compliments or good jokes at
086 108 6575, [email protected]rty.com
or visit Jomtien Property’s website at www.jomtien-property.com