How much can you earn from Phuket real estate?
Investing in professionally managed real estate in Phuket allows you to calculate profits decades in advance, based on offers from developers and hotel operators. This provides a significant advantage for investors.
The minimum entry amount in 2024 is around $100,000. For this amount, you can purchase a fully furnished studio of 30-35 square meters in popular tourist areas and high-quality residential complexes. Developers often offer several income program options.
Guaranteed Income
Typically, developers offer guaranteed income programs for 3-5 years from the completion of construction. This allows investors to receive a fixed income in the first years of operation, regardless of whether the property is rented out or not. The standard rate in Phuket is around 7% per year for a period of 3 to 5 years.
Rental Pool Program
The main income starts coming after the guaranteed income program ends through participation in the Rental Pool program. By this time, the hotel stabilizes occupancy and can offer high rental rates. The Rental Pool program means that the hotel collects income from all similar apartments, deducts its share, and distributes the remaining profit among the owners. It's important to carefully study the program terms to understand your share of the profit. On average, owners can earn 10% to 15% of the property's value annually.
Cashback
For those buying property under construction but wanting to start earning immediately, there is a cashback option. The investor receives a 7% return after full payment, even if construction is still ongoing. This allows you to start earning from the beginning without waiting for the project to be completed, and in the end, the income can increase by 15-20%.
Buyback Guarantee
Some developers offer the possibility of buying back the property after 10 years at a price 10-15% higher than the purchase price. However, it is often more profitable to sell at market value, as prices can rise much more over 10 years. We inform our clients about the increase in their property value and help select the most liquid properties with high capital growth potential.
Real estate generates income in two ways: through rental payments and appreciation. If you earn 7% rental income over 10 years and then sell the property for 50% more, your total income will be 120%. That’s why it’s essential to plan your sales strategy in advance.
How to increase income
To maximize income, it is recommended to buy real estate in the early stages of construction, as the most profitable offers are available at the start of the project. As construction progresses, prices rise, and early investors benefit the most.
Developers often offer special prices at the pre-sale stage when sales begin long before the official project launch. We notify clients in advance about upcoming pre-sales and help them choose the best options.
Investors also benefit from working with brokers, as developers often offer additional bonuses through them: discounts, gifts, furniture, and free services. The developer pays the broker’s fee, not the buyer.
Registering property through leasehold is another way to increase profitability, as leasehold properties are cheaper, and the ownership and usage rights remain fully intact.