How to Earn 8-11% Yield from Real Estate in Phuket Thailand
Summary
TLDRThis video explores high-yield real estate investment opportunities in Phuket, Thailand, focusing on the condo hotel model. It discusses the economic development of Phuket, tourism revenue, and the potential for investors to earn 8-11% annual returns by leasing studio apartments in hotel condo projects, managed by reputable hotel brands.
Takeaways
- 🏖 Investing in a hotel condo project in Phuket, Thailand, can yield 8-11% annually, with property value appreciation on top of rental income.
- 💰 Purchasing a studio apartment for 55 million baht (around $153,000) and leasing it back to the hotel group for a 70-30 profit split is a suggested investment strategy.
- 📈 The script assumes an occupancy rate of 67% and a daily rate of 2,600 to 6,000 baht, resulting in an annual income of around $13,600, which is an 88.8% yield at 67% occupancy.
- 🌐 Phuket is ranked 11th in US News's world's best places to visit for 2023 and is the second city in Thailand for tourism revenue.
- 📊 Post-pandemic, Phuket welcomed 4.8 million tourists in the previous year, generating 168 billion baht in revenue, with a significant increase in hotel occupancy and average daily rates.
- 🏨 The island has a growing number of luxury and first-class hotel keys, indicating a shift towards attracting more upmarket tourists.
- 🛣️ Phuket is investing in infrastructure with plans for a major tunnel expressway and an airport rail link to improve connectivity.
- 🏘️ The real estate market in Phuket saw a 37.2% increase in the number of residential units sold and a 45% increase in total value compared to the same period last year.
- 🚫 Foreigners cannot own land in Thailand but can buy condos outright, which can be rented out long-term or managed for daily rentals through condo hotel models.
- 🏢 Andaman City is a multiphase development project offering various types of accommodations, including condo hotels managed by reputable hotel brands.
- 📈 Andaman Riviera, part of Andaman City, offers units with a profitability calculation that suggests an 8-11% yield on investment, separate from potential property appreciation.
Q & A
What is the estimated annual yield on investment for buying a studio apartment in a hotel condo project in Phuket, Thailand?
-The estimated annual yield on investment ranges from 8% to 11%, depending on the occupancy rate of the property.
How much does it cost to buy a studio apartment in the hotel condo project mentioned in the script?
-The cost to buy a studio apartment in the hotel condo project is 55 million baht, which is approximately $153,000.
What is the profit split arrangement between the investor and the hotel group managing the property?
-The profit split arrangement is 70% to 30% in favor of the investor.
What is the range of rental income that can be expected from the studio apartment depending on the season?
-The rental income can range between 2,600 to 6,000 baht per day, depending on the season.
What was the occupancy rate assumed in the initial investment calculation presented in the script?
-The initial investment calculation assumed an occupancy rate of 67% for the year.
How many tourists did Phuket welcome in the year following the devastating pandemic in 2022?
-Phuket welcomed 4.8 million tourists in the year following the devastating pandemic in 2022.
What is the current hotel occupancy rate in Phuket according to the CBRE report mentioned in the script?
-The current hotel occupancy rate in Phuket has improved to 70%, as per the CBRE report.
What is the total number of hotel keys in Phuket, and how are they distributed among different grades?
-Phuket has a total of 44,069 hotel keys, with 5% in the luxury grade, 42% in the first-class grade, and 53% in the mid-range.
How has the real estate market in Phuket performed in terms of residential units sold and total value in the first half of the year?
-In the first half of the year, Phuket sold 4,076 residential units, which is a 37.2% increase year-over-year, and the total value of residential units sold was 14.6 billion baht, a 45% increase compared to the same period.
What is the Andaman City project, and what does it offer to investors?
-The Andaman City project is a multiphase development near Patong Beach in Phuket, offering its own hotels, residences, restaurants, bars, spas, and various activities. It includes condo hotels managed by hotel groups, boutique residences with private pools, and condominium complexes for long-term living.
What are the potential challenges for foreigners looking to invest in real estate in Phuket for daily rentals?
-Foreigners face challenges such as the requirement of a Thai partner owning at least 51% of the shares for starting a business, the need for a hotel license for daily rentals, and restrictions on owning land in Thailand.
Outlines
🏖 Real Estate Investment in Phuket: High Annual Yields
The video script introduces a real estate investment opportunity in Phuket, Thailand, promising an annual yield of 8 to 11%. Investors can purchase a studio apartment in a hotel condo project for approximately $153,000 and lease it back to the managing hotel group on a 70-30 profit split basis. The script provides a detailed financial calculation, assuming different occupancy rates and rental income, which could result in an annual yield of up to 11%. The presenter, Jets, offers to help find property deals in Thailand and invites viewers to contact through provided links. The economic development of Phuket is highlighted, showcasing its tourism revenue, hotel occupancy rates, and infrastructure projects, which support the feasibility of the investment opportunity.
🏘 Opportunities and Challenges for Foreign Investors in Phuket
This paragraph delves into the challenges and opportunities for non-Thai citizens looking to invest in Phuket. It discusses the high tourist-to-resident ratio and the potential for businesses catering to tourists, such as bars or restaurants, while noting the legal requirements for foreign business ownership. The paragraph also touches on the difficulties of running a resort or Airbnb without a hotel license and the restrictions on foreign land ownership in Thailand. It introduces the condo hotel model as a solution, where investors can legally own units with daily rental potential, managed by reputable hotel brands, and highlights the Andaman City project as an example of such an opportunity, providing a detailed yield calculation for potential investors.
📈 Anaman City: High-Yield Real Estate Investment in Phuket
The final paragraph focuses on the Anaman City project, a multiphase development offering high-yield real estate investment opportunities in Phuket. It outlines the project's phases, including Andaman Riviera, a condo hotel managed by Rison Hotel Group, Anamon Boutique Residences with luxurious amenities, and a condominium complex for long-term living. The paragraph provides a profitability calculation for a 33.7 square meter room, projecting an 8-11% annual return based on different occupancy rates and rental income. It also mentions the second phase of the project, Anaman Boutique Residences, offering exclusive apartments with private pools and a profitability calculation for a 218 square meter unit. The video concludes by inviting viewers to learn more about the investment opportunity through provided links.
Mindmap
Keywords
💡Real Estate Investment
💡Yield
💡Occupancy Rate
💡Hotel Condo Project
💡Economic Development
💡Tourism Revenue
💡Condo Hotel
💡Asset Appreciation
💡Developer
💡Investor
💡Andaman City
Highlights
Investing in real estate in Phuket, Thailand, can yield 8 to 11% annually.
Buy a studio apartment in a hotel condo project for 55 million baht (around $153,000).
Lease the apartment back to the hotel group for a 70-30 profit split.
The hotel group manages and rents the property, generating income between 2,600 to 6,000 baht per day.
An occupancy rate of 67% yields an annual income of $13,600, resulting in an 88.8% annual return on investment.
Phuket is ranked 11 in US News's world's best places to visit for 2023.
Phuket welcomed 4.8 million tourists in 2023, generating 168 billion baht in revenue.
Hotel occupancy in Phuket has improved to 70%, with an average daily rate of 5,250 baht.
Phuket's real estate market saw a 37.2% increase in residential units sold in the first half of 2023.
The total value of residential units sold in Phuket increased by 45% year-over-year.
Phuket has a total of 44,069 hotel keys, with 5% in the luxury grade and 42% in the first class grade.
Infrastructure projects include a major tunnel expressway and an airport rail link.
Foreigners can buy condos outright and rent them out on a long-term basis.
Running a resort or Airbnb in Phuket requires a hotel license and a Thai partner.
The condo hotel model allows foreign investors to legally own and rent out properties daily.
Andaman City is a multiphase development project near Bang Tao Beach offering high yield investment opportunities.
Andaman Riviera offers units ranging from 33 sqm studios to 250 sqm executive suites with a potential 8-11% yield.
Anaman Boutique Residences offers exclusive apartments with private pools, targeting an 8-11% annual return.
Transcripts
let's talk about how to earn 8 to 11%
per year by investing in real estate and
puket in Thailand in addition to the
property increasing in value so what you
do is you buy a studio apartment at a
hotel condo project for 55 million bot
which is around
$153,000 you then lease it back to the
hotel group that's managing it for a 70
to 30 profit split they then manage it
and rent it out for you for between
2,600 to 6,000 bot depending on the
season assuming an occupancy rate of 67%
for the year less maintenance costs less
30% for the hotel group and you're left
with
$491,000 bot of income per year which is
around
$13,600 that's an 88.8% annual yield on
your investment if the occupancy rate
turns out to be 75% you'll have a 10%
yield if the rate is 80% you'll have an
11% yield and so on so in the rest of
this video I'm going to paint a bigger
picture of the economic development of
puket and dive deeper into the real
estate project that offers this return
calculation so you can see how feasible
these numbers are if you're new to this
channel my name is Jets and my team
helps you find great property deals in
Thailand whether to live in yourself or
rent out to others you can get in touch
by seeing the link in the video
description or you can go to Jet
gunther. all right let's get started at
a high level puket is now ranked 11 in
US news's world's best places to visit
for
2023 and is the number two City in
Thailand after banock in terms of
Tourism Revenue after having a
devastating pandemic in 2022 last year
the island welcomed back 4.8 million
tourists that brought in around 168
billion bots in Revenue a report by CB
shows that as of the first half of this
year the island has already seen a total
of 3.4 million tourist arrivals and so
puket is very optimistic that it will be
able to resume and eventually exceed its
preco numbers as soon as next year 2024
that same CBRE report showed that hotel
occupancy in puket has improved to 70%
compared to just
34.6% in the same period last year the
average daily rate has also increase
year-over-year by 33% to
5,250 bots compare this to the first
half of 2019 before the pandemic where
the occupancy was
73.6% and the average daily rate was
4,061 bot Now quickly referring back to
the calculation in the beginning of the
video it assumed an occupancy rate of
67% and a daily rate of between 2600 to
6,000 bot so all that sounds sensible
compared to Market data so we now have
an occupancy rate that's just just about
return to prepandemic levels while the
daily rate on average has already far
exceeded it that's because the island
isn't just going back to how things were
it's been raising the bar with many
hotels rebranding themselves into higher
grades as the island aims to attract
more upmarket crowds right now the
island has a total of 44,000 and 69
Hotel Keys 5% of which are in the luxury
grade 42% in the first class grade and
53% in the mid-range in terms of
infrastructure projects the island is
planning a major tunnel Expressway that
will connect the east side of the island
with the West to drastically reduce
commute times and puket is also planning
an airport Rail Link that will run from
the airport south to chalong
intersection and also North to tanun in
panga as for the real estate market if
you look at the number of residential
units sold in puket in the first half of
this year the island sold a total of
4,076 units which is a
37.2% increase year-over-year while the
total value of residential units sold
was 14.6 billion bot a whopping 45%
increase compared to the same period
compare this to the top 10 real estate
provinces in Thailand this 45% increase
in value is way ahead of the rest with
the number two province of chonburi
increasing by 22% and number three
changmai increasing by 16% and this
surge in real estate prices is obviously
due to many factors but one of them is
the fact that about 60% of the land in
puket belongs to parks and protected
land and land by the beach that can be
developed is now almost entirely taken
up not only that highrise projects are
not allowed on the Island so it's not
easy or straightforward to Simply build
more to meet demand like it or not puket
is now one of the most over touristed
cities in the world in terms of its
tourist to local resident ratio of 118
tourists to one resident and if this
fact disturbs you as someone wanting to
enjoy peaceful Island life know that the
island is large enough that there are
areas in beaches that are still mostly
frequented by locals but if you see this
as an opportunity to try to capitalize
on one of the world's top tourist
destinations in the world there are a
few options for non- Tha citizens one
idea is to start some sort of business
that caters to tourists like opening a
bar or a restaurant but starting a
business in Thailand as a foreigner
requires you to have a Thai partner who
owns at least 51% of the shares and as
of current laws you need to employ at
least four taii citizens in order to
give yourself one work permit the other
potentially lucrative idea is to run
some sort of Resort or Airbnb the
problem with this though is technically
any daily rental operation requires you
to obtain a hotel license and to own a
hotel business you're back to the
requirement of needing a majority tie
shareholder on the other hand foreigners
can outright buy condos and you can own
and rent it out on a long-term basis but
if you buy a condo for the purpose of
daily rentals such as doing an Airbnb
you can bet that your neighbors are
going to complain about your noisy
vacationers because even I complain to
management whenever I see tourists in my
condo however you can get away with it
if you rent out your own home in your
own private property and that's what
many Thai people have been doing even
though you technically don't have a
hotel license it's very hard to crack
down on something someone's doing on
their own private property but as a
foreigner though you're not allowed to
own land in Thailand so that's a problem
but even if you somehow manage to
secretly turn your condo into an Airbnb
or lease a villa to then subase it out
as an Airbnb you now have to deal with
the hassle of having to Market your
property and then meeting with the guest
to give them your key card and then
cleaning the room after so investors
have been looking for a way to own a
high value property that they can
legally do daily rentals on while having
someone else manage it for them on the
other hand developers have been looking
for well more investors this has
therefore given rise to the condo hotel
model a developer creates a real estate
project that is in compliance with
Thailand's Condominium Act which means
they're able to legally sell units to
buyers and then they go to the lanes of
also obtaining a hotel license so that
daily rentals are allowed and then they
have a major hotel brand manage it so
it's not a time share because as an
investor you own the official title deed
of the unit you bought which means you
can resell it whenever you want but you
buy it under the agreement that you
would then lease it back to the hotel
brand to manage and rent it out to
visitors on your behalf so you outright
own the property the property has a
hotel license so you can generate income
from daily rentals and you have a
reputable hotel brand that's managing it
for you for a profit split that's
typically
7030 and if you ever want to stay in the
unit you own you can inform the hotel
and they'll just block out the dates for
you and this finally brings us back to
the calculation at the very beginning of
this video Andaman city is a multiphase
development project near the pictures
bangau Beach on the west side of the
island the area is not too far from the
airport and is home to worldclass beach
clubs Golf Resorts five-star hotels and
great restaurants within the adaman city
complex will consist of its own hotels
and Residences restaurants bars spas and
various fun activities there's currently
three development phases within the
project consisting of Andaman Riviera
which is a condo hotel that's managed by
Rison Hotel Group there's also anamon
Boutique residences that offers spacious
three bedroom apartments with their own
swimming pools and within walking
distance to the Sea and the third phase
will consist of a condominium complex
for longer term living anaman Riviera
offers units ranging from 33 M to
Studios to 250 met executive suites
revisiting their yield calculation sheet
you'll see it's based on a
33.7 met room that was bought with the
furniture package for 52 million Bots
feel free to pause the video so you can
look closer at the numbers but basically
they've made calculations based on
different daily rates and occupancy
rates for different tourist seasons and
then assuming various occupancy rates
essentially they're advertising between
8 8 to 11% yield on your investment and
the economic overview of puket that I
had just went through helps to verify
that these numbers are grounded and
reasonable also remember that this yield
is separate from the overall
appreciation of the asset itself this
first phase of anaman city is pretty
much near completion meanwhile their
second phase of anaman Boutique
residences that slated for completion in
20126 UPS the game with only 24
exclusive apartments for sale ranging
from 218 to 302 squ M that includes
three bedrooms large living room spaces
a Terrace and a private pool for all and
again the project has also included a
profitability calculation sheet for a
218 square meter room that was purchased
all fees included for 29.1 million Bots
which is around $ 820,000
us with a daily rental rate of between
10,000 bot to 30,000 bot depending on
the tourist season season and an average
occupancy rate year round of
65% and after subtracting 30% for rtis
group for their management you're left
with an 8% annual return on your money
10% if the occupancy rate is 75% and 11%
if the occupancy is 80% so I hope this
video proves to you that a high yield
real estate investment opportunity is
not only feasible in puket it's
currently available with anaman City if
you like to learn more about this
opportunity you can get in touch via the
link in the video description or you can
go to Jet gun.com thank you so much for
watching and I wish you all the best in
your real estate Journey
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