Alternative Property Investment

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Alternative Property Investment

 

Many of our buyers are buying strictly for investment – and why blame them – the Pattaya/Jomtien area can offer great returns from both appreciation and ROI from rental income. I have written about these topics over the years ad nauseam, so I’ll skip the usual rhetoric of why you should invest in property in Pattaya/Jomtien and write about a few other ways our clients are able to make money from the real estate market here.

 

Investment Pools

Let’s forget about buying a physical property for a minute. When you’re buying property, you’re essentially investing in something, same as you would a bond or stock, but with the additional assurance of having something tangible to show for it. At the end of the day, everyone has an idea of what returns they’d like to achieve and over what amount of time they’d like to invest for. We have recently become involved in what I can best describe as an investment pool. In essence, you invest a fixed amount of money – say 5 million THB – and the longer it is invested, the higher the annual return is, up to a maximum term of four years. For example: if you leave the 5 million THB in the pool for one year, you get a 6% return, for two years – an 8% return per annum, three years – a 10% return per annum and for four years – a 12% return per annum (that’s a 48% return over four years!). These amounts are paid out quarterly with the principal paid back after the agreed term. Sound good? It is – in fact, this is one of the best investment packages we’ve ever been able to offer and the principals supporting this pool are some of the area’s most reputable business people. Space is getting limited, so if you’re interested, please contact me immediately.

 

Guaranteed Rental Returns

Everyone wants guaranteed rental returns and, to be honest, getting guaranteed returns on rentals is usually very difficult to find – and if you do find it, chances are it’s on a new-build and you have to wait until it’s completed to start seeing any money. We have a selection of about 150 condos listed with us that are offering guaranteed rental returns of 8% per annum for two years, also paid quarterly. For example: purchase one of these condos for 2 million THB, simply give possession back for 2 years and collect an income of 160,000 THB per year, or 40,000 THB per quarter. After the initial two-year period, the condo is handed back to you or another term can be negotiated. Again, this is something that is not typically offered here in with resale properties, so this is a very good opportunity for someone looking to see great rental returns (guaranteed) without having to deal with looking for/looking after tenants.

 

Taking Over Financed Properties

This is a pretty interesting concept. Over the past couple of years we’ve begun to see private sellers offering financing to buyers. Typically this done with interest rates varying anywhere from 5 – 12%, but let’s say about 8% interest on average. What we are now able to offer is for someone to come in and buy the financed property and you collect the interest payments. For example: Someone has purchased a condo for 2 million THB. They’re paying 1 million THB downpayment with the additional 1 million THB to be paid over 3 years. You purchase this property from the seller and take over as the financier for the property. So you pay the seller 2 million THB, the buyer then gives you back the 1 million THB and you collect 8% per annum on the outstanding 1 million THB, with the 1 million THB owed paid back to you after 3 years. If the buyer defaults, you can negotiate terms for additional payments, or if you so choose, take back the property. Either way, you can’t lose – worst case scenario is you’re going to collect 8% return per year – best case you get a condo for half price!

 

I’ve spoken in very brief terms about the above opportunities for investment and I’m quite limited for space – so I’m forced to simplify – but hopefully I’ve spurred a bit of interest. Of course there are still great opportunities buying property in the traditional sense – just ask the thousands of investors who’ve made fortunes in Pattaya/Jomtien over the years – yet finding alternative ways to invest and make the most secure investments is always something that should be explored. If you would like to discuss any of the above further and in greater detail, please don’t hesitate to contact me, Stu Sutton, Managing Director of Jomtien Property, at 086 108 6575 or via email at [email protected]

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