Firstly before starting quick disclaimer, this article is not about some get rich quick schemes or exotic strategies. The property markets of South East Asia are full of exotic and thrilling strategies such as timeshares, impressive guaranteed yields and undiscovered up-and-coming areas about to boom; however this article will be a little more sober and focus on fundamentals of Bangkok property investment.
The simplicity of property investment can often come across as too easy and lacking in complexity. However the beauty of investment in property as an asset class is that you do not need to be a genius or financial whizz-kid to profit. Simplicity works in Property Investment and following some straight-forward rules will make you money!
There are two simple ways to makes money when buying a Bangkok Condo:
– Rent it out and generate “Rental Yields”
– Sell it and profit from “Capital Appreciation”
By ensuring your follow the 3 Factors in this article, your investment will achieve a certain level of stability and produce healthy returns!
So let’s dive in…
In most cases property investors aim to benefit from a combination of Capital Appreciation and Rental Yield. The easiest way to ensure returns on both fronts in Bangkok is by investing in areas within the Central Business District (CBD). The prime areas forming the CBD are:
-Sukhumvit Area (Nana- Ekamai)
-Wireless and Ploenchit Area
-Silom and Sathon Area
Restricting your property investments to areas within or in close proximity to the CBD will ensure a steady supply of potential buyers and tenants. It is important to note that expats form the majority of the rental market in central Bangkok.
However simply buying in a prime area is not enough and it is always important to consider the property’s proximity to the closest BTS or MRT station. The mass transit lines are a convenient way to get around Bangkok and are a vital factor for working professionals to commute around in the city. Therefore tenants and buyers always seek properties within walking distance of a BTS/MRT.
2. Property Specifications
Property Investors are often too narrowly focused on the financials of an investment; focusing on figures such as rental yield, price per sqm., discounts, etc..
Problem is ultimately the Condo is a home that will be lived in by a future tenant or even a home seeker. Therefore it is always important to consider details such as:
– Floor and View
– Size and Unit Layout
– Does the Unit benefit from natural light?
– Building Facilities
– Unit orientation
– Fixtures and Fittings
Always ensure the condo is as pleasant as possible on a residential perspective. This is for a simple practical reason, that the Bangkok property market is offering a large supply of condos (Both on the sales and rental side). This means that if your investment is not pleasant it will struggle to compete with competing condos on the market.
3. Condo Developer
Perhaps a peculiar Bangkok Factor that has substantial effects on the future value of a Condo is the Developer. Bangkok Condominiums built by certain developers tend to benefit from a certain prestige or branding thus making them easier to re-sell.
This prestige is usually because certain Developers have a strong track-record of successful projects. In many cases famous Developers’ design/building quality is of a higher-standard; this means that their projects tend to look better and are more popular. Finally established developers have solid after-sales care strategy and ensure that a strong management team is in place to maintain the building for the years to come.
To conclude …
The 3 Factors above may come across as dull common sense, applicable to most property markets around the world. However there has never been anything wrong with sticking to simple time-tested fundamentals!
The trend in the past few years is to seek exotic, fresh and exciting strategies that produce extraordinary returns. However it is important to remember that at its core property is the purchase of an asset that someone will call “home”. By focusing on the 3 Factors discussed, an investor refocuses on the “Lifestyle fundamentals” of a property and is thus bound to find success and make healthy returns!