Condominiums are some of the investments that you should ideally be making in Thailand. You do, however, have to do your due diligence and see if these residential units are really worth the money that you’ll be investing in.
Are condos the best forms of investment you can make in the Kingdom? Here are the three things that you should know about condominiums in Thailand, and what they can mean for you as a foreign investor in the country.
Consider this as investor education – a non-monetary but definitely important investment you should make, regardless of which country you’ll be waging your money in.
Previous discussions in this website have indicated that Thai law explicitly prohibits foreigners from owning land under their name, except in certain special circumstances. For instance, foreigners who are married to locals can purchase real estate under their spouse’s name.
Permanent residents can also purchase land, as they enjoy rights that almost equal that of being a citizen in the Kingdom. Businessmen also enjoy that distinction as a reward for investing significantly in the Kingdom’s economy.
Condominiums are another exception to that rule. This is because condominium units are not counted as land; instead, they are projects that are sitting on top of land owned by a Thai local developer. This makes it legal for foreigners to purchase condominiums in the Kingdom.
The only restriction imposed on foreigners is a 20% cap on the total number of condo units in a single project. The rest of the available units are sold exclusively to local investors.
If the project that you’re interested in has reached the 20% limit, do not fret. That is because you can still lease a unit if you really want to acquire a unit in that project. Leases are long-term contracts that confer several rights from the owner to you.
Basically, while the lease is in effect, you are the de-facto owner of that condominium unit. You essentially have the power to do what you want with the condo unit you’ve leased. You can develop it further for your own purposes, for instance.
The only right that you don’t have is to re-sell the unit. This right belongs solely to the legally recognized owner. However, that doesn’t mean you cannot earn money from the condo unit that you’ve leased from the owner.
If you’re looking to earn money from your investment in a long-term lease, then you can sub-lease it to another foreign expatriate. Sub-leasing lets you earn money from leasing it to another party, who will maintain and use the unit in your place in exchange for a monthly payment.
Sub-leasing is totally legal. However, you’ll have to make sure that you’ve negotiated that with the owner of the unit. There must be a clause in your leasing contract that specifically allows you to do just that, or else it becomes illegal.
So, it wouldn’t hurt to take the extra steps necessary to gain permission to sub-lease the condo unit when negotiating a lease contract.
Don’t discount condominiums from your list of possible investments in the Kingdom of Thailand. Learn more about them, and you’ll see how they can actually help you in your new path as an investor in this beautiful country.
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Photo credit : Not That Bob James