How to purchase a paradise property in Thailand without going broke: secrets of saving and hidden cost
If you are looking for a new property in Thailand or want to buy it, you are most likely to have similar questions: “How to buy a property and not go broke? How to think everything through? How to account for all expenses?” Of course, there are a lot of doubts. Remember, you are to be considered armed and dangerous. Therefore, you need to know exactly what expenses you will have to deal with.
Let’s figure out what you first need to pay attention to when buying a home in Thailand and not go broke, and also find out in more detail what expenses you will have to face when buying Thai properties. Today we will look at what expenses are and how to calculate them correctly. There are one-time and annual costs. It is high time to have a closer look at each of them to be armed and dangerous.
One-time expenses
· Registration fees
These are several one-time taxes when registering real estate with the Land Department. They depend on the type of property and ownership, as well as how many years the seller owned the property. Some taxes are based on the contract value, and some taxes are based on the estimated value of the residence. A lawyer can learn about this value a few days before the transaction. Often, the total amount of taxes is divided between the buyer and the seller in different proportions. Approximately, the buyer pays 2-3% of the real estate value.
· Sinking fund (capital repair fund)
According to Thai law, the management company must have a separate fund from the owners’ funds, which can only be spent on unforeseen repairs in public areas. This is a one-time payment, and its size ranges from 400 to 800 baht per 1 sq. m. You pay it before you register your apartment with the Land Department. In some complexes, the developer charges you an annual repair fee instead of a one-time payment. This is 100 baht per 1 sq. m per year.
· Additional payment for Freehold
There are 2 types of ownership for foreigners in Thailand: freehold and leasehold. Both types have their pros and cons. Standard prices from developers refer to long-term apartments (average 90 years). If you plan to live longer and your freehold status is important to you, the surcharge for such an apartment is about 10%.
· Furniture and accessories
When buying a property on the primary market, you get an apartment or villa with finishes, plumbing, air conditioning, and built-in furniture. You can purchase the rest of the furniture
yourself. However, if you do not want to waste your time shopping or plan to rent an apartment in a cosy community, you should purchase a standard set of furniture from the developer.
· Water and electricity meters
There are some cases when the construction company makes you pay for water and electricity meters. However, government agencies install these meters and charge the developer a fee of 10 to 20,000 baht.
Annual expenses
· Common area (maintaining the adjacent territory)
In Thailand, almost every residential complex has a communal swimming pool, gym, and 24-hour security. These complexes built by hotel standards have their own social infrastructure such as spas, tennis courts, mini golf, water slides, children’s playrooms, and much more. Thai villa complexes also have their own infrastructure, but a little smaller – there are lawns, parking lots, and round-the-clock security. Owners are in charge of paying for the maintenance of common areas. The payment is based on the number of square meters. For example, the average price is 60 baht per 1 sq. m per month.
· Garden maintenance and pool cleaning
Maintaining a villa is more expensive than an apartment. It is necessary to take care of the garden and clean the pool at least 2 times a week. These services are provided by a management company. On average, the full maintenance of a small garden and swimming pool costs from $500 per month.
· Utility bills
Electricity and water are counted by the meter. The city’s electricity rate is about 40 Baht per kilowatt, and the water costs nothing.
· Hidden costs
There are hidden costs that you may not find out about. For example, your apartment is rented by a hotel. At the end of the year, it calculates the income. It is good if the hotel immediately shares this income with you. However, you need to keep in mind that some hotels first deduct marketing and management costs from total revenue, and then share with you what is left.
That is why, before purchasing an apartment in Thailand, you need to carefully study and calculate the actual costs. There are complexes that promised a guaranteed income of 7%, but actually gave out 3.5%. Moreover, there are complexes where the hotel operator managing your complex does not charge you any fees. You get a net income.
A few more recommendations on how to purchase a Thai home and save money
Thai property rights laws can seem very confusing and incomprehensible. Therefore, before buying your dream home, check with a competent lawyer on all issues so that the purchase of real estate in Thailand does not turn into a nightmare for you.
The real estate agency you work with can recommend a professional lawyer. However, purchasing a Thai property is much easier than it might seem at first glance.
Buying a residence in Thailand in one piece with an expert
Now you are aware of what pitfalls you will have to come across when buying a property in Thailand. This knowledge will be useful to you. Moreover, to be 200% sure of what you will have to deal with in the Thai real estate market, it is better to work with professionals not to get into trouble. Thailand-Real.Estate will provide you with full transaction support from a reliable manager who will select the right property for you at the best price in the best place, collect all the necessary documents, and help at every stage of the transaction and after it. Be sure that your deal is in good hands with Thailand-Real.Estate.
*This is a collaborative post
