Phuket has been an investment hub for foreigners from all around the world. Both professional investors and working individuals seek risk-free and easy ways to keep and increase their savings. Some opt for fixed bank deposits, others gamble or save money in piggy banks. Many others wisely invest in real estate.
Investments in real estate have proved to be the most secure and profitable way of making money. However trouble-free and unbelievable this may seem, there is a real opportunity to yield guaranteed profit through rental programs run by Phuket’s developers and management companies. These rental programs offer a hassle-free return on your investment. The return is guaranteed, real and absolutely legal.
How do these programs work to be able to actually guarantee a certain rental % to you?
When you buy an investment property you are offered to rent out your place within 1-5 years through a management company. In return you are paid a certain fixed percentage from the rental income, and given 15-60 days of personal use for the property. Therefore, the owner does not have to worry about finding tenants, singing rental agreements or maintaining the property. All issues and nuances related to the rentals are eliminated. What is left is the fixed rental return on the amount invested in the property. Nowadays, the average guaranteed return ranges from 5% to 8% depending on the projects and the locations.
What differentiates rental programs with a guaranteed yield from other rental options:
- the property owner has the right to occupy their property within a fixed period of time per year, excluding high and peak seasons in most cases. This personal use is limited to 15-60 days per year, and can be divided into a few shorter stays of 7-30 days each. Normally, a peak season lasts from December 25 to January 15, whereas the months from November to May are referred to as a high season;
- the peak and high seasons are blocked to maximise the rental yield to make sure the owner is paid the percentage guaranteed by the contract;
- if the property owner is willing to partake in the guaranteed rental program a standard turn-key furniture package must be purchased. The uniform furniture and accessories are required to make sure all rental units are identical;
- in the event the owner wishes to occupy their property during the blocked dates they are offered to pay a discounted rate and use the property. Generally, the rate is 50% of the established rack rate;
- the guaranteed rate is paid in the end of the year. There are some exceptions though. A few developers in Phuket are glad to pay the return within 1-2 months after the purchase;
- any buyer is free to sign out of the rental program any time they wish to do so. In the majority of cases the owner may ‘exit’ in the end of the year;
- the property participating in the program can be resold. The program terms and conditions will be binding upon the new owner;
- the property owner must accept the rental program terms and conditions contractually, just like it is done when a fixed bank account is opened;
- the rental program yield is credited onto a Thai bank account only. A standard sales and purchase agreement together with a passport is enough to open a savings bank account. A card associated with the account can be used both in Thailand and abroad. There is no need to transfer money home.
Rental programs with a guaranteed return is a unique way of making money on real estate without any hassle. You buy a property for your personal use, and the management company does all the work for you. Their first and foremost job is to honour the guaranteed income, contractually. The yield is paid in Thai Baht which has been stable and secure for the past 10 years.
Do not hesitate to contact us for more details and exact figures and project available for purchase.