Self-management or Property Management Company?
The Phuket real estate market has seen significant changes over the past eight years. Previously, small property management companies and private owners dominated the market, renting out apartments through personal connections, social networks, or aggregators.
Today, major international hotel chains like Best Western, Wyndham Group, and Sheraton have entered the rental market. These companies sign agreements with local developers to build properties according to hotel standards, then take over the management of these complexes. Thanks to their vast resources and expertise, these chains ensure high occupancy rates in both high and low seasons, making them ideal partners for investors.
While hotel operators take a portion of the profits, they also assume most of the risks. This results in a stable passive income, often guaranteed, making it an attractive option for those who prefer not to manage properties themselves and want to minimize risks. Although self-management can theoretically bring in more profit, the risks and expenses are much higher. For instance, during the pandemic, many private apartments were left vacant, while hotel apartment owners continued receiving stable income.
Thus, we highlight beachfront complexes with professional management as the most reliable and potentially profitable option for investors. Although self-rental may yield more income, the associated risks and costs can undermine such a small business. For example, during the pandemic, most private apartments went unrented, while hotel apartment owners kept receiving stable returns.
New or Resale Property?
Investing in new builds at early stages offers the advantage of purchasing at a lower price, increasing profitability. The resale market rarely has the most profitable properties—modern apartments in professionally managed complexes in Phuket's best resort areas.
International hotel chains started operating on the island relatively recently, and most investors in these complexes opted for five-year guaranteed income programs. Selling during this period may be disadvantageous, as new buyers won't benefit from the original guaranteed income terms.
The best time to sell is after five to seven years, when prices will have risen. If you plan to resell earlier, it's better not to sign a guaranteed income contract. While top locations still have available properties, it's wise to invest now.
Apartment or Villa: Which is More Profitable?
Apartments generally generate higher returns than villas, as villa ownership involves higher costs for maintenance and repairs. Rental demand for villas is also lower, as they are usually located further from the beach. Tourists prefer beachfront properties, and staying in a villa often requires renting a car, which may not be convenient for all.
Villas are rarely managed by professional hotel operators and often lack hotel licenses, making short-term rentals illegal. Long-term rental income is typically lower. However, exceptions exist—beachfront villas in professionally managed complexes with hotel licenses can bring in guaranteed income, but such properties cost at least $2-3 million.