How to Earn 8-11% Yield from Real Estate in Phuket Thailand

Summary

This 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

00:00

🏖 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.

05:01

🏘 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.

10:03

📈 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.

Keywords

💡Real Estate Investment

Real estate investment refers to the act of purchasing, owning, managing, or renting out real estate for profit. In the video, it is the core theme as the speaker discusses how to earn an annual return by investing in a hotel condo project in Phuket, Thailand. The script mentions buying a studio apartment and leasing it back to a hotel group for a profit split, illustrating the concept of real estate investment.

💡Yield

Yield in the context of investing refers to the return on investment, typically expressed as a percentage. The video script discusses different yield scenarios based on occupancy rates, such as 'an 8.8% annual yield on your investment' and '10% yield if the occupancy rate is 75%', highlighting the potential profitability of the real estate investment.

💡Occupancy Rate

Occupancy rate is the percentage of available rooms that are occupied by guests in a hotel or similar establishment. The script uses this term to calculate potential earnings from the real estate investment, with different scenarios like '67% for the year' and 'if the rate is 80%', indicating how occupancy levels can affect the profitability of the investment.

💡Hotel Condo Project

A hotel condo project is a type of real estate development where units are designed to function both as residential properties and hotel rooms. The script describes an investment opportunity involving buying a studio apartment in such a project, managed by a hotel group, which exemplifies the concept of a hotel condo project.

💡Economic Development

Economic development refers to the process of improving the economic well-being of a region, often through tourism, infrastructure, and real estate growth. The video script provides an overview of Phuket's economic development, mentioning its ranking, tourism revenue, and infrastructure projects, to establish the context for the real estate investment opportunity.

💡Tourism Revenue

Tourism revenue is the income generated from the activities of tourists in a region. The script cites '168 billion bots in Revenue' from 4.8 million tourists, demonstrating the significant impact of tourism on Phuket's economy and the potential for real estate investments related to the tourism sector.

💡Condo Hotel

A condo hotel is a hybrid of a condominium and a hotel, where owners have the right to use their unit for personal stays and also lease it out for hotel operations. The script explains the 'condo hotel model', where investors can own a unit and lease it back to a hotel brand for daily rentals, providing an example of how this model works in the Andaman City project.

💡Asset Appreciation

Asset appreciation refers to the increase in value of an asset over time. The video mentions that the yield calculation is separate from 'the overall appreciation of the asset itself', indicating that in addition to the rental income, investors can also benefit from the potential increase in property value.

💡Developer

In real estate, a developer is an individual or company that creates and builds properties for sale or rent. The script discusses how developers are looking for investors to participate in their projects, such as the Andaman City project, which is a multiphase development near Bang Tao Beach.

💡Investor

An investor is a person or entity that commits money to an asset or venture with the expectation of obtaining a profit. The video script addresses the audience as potential investors, explaining how they can earn a return by investing in the condo hotel project and how the economic conditions in Phuket make it a viable opportunity.

💡Andaman City

Andaman City is the name of the multiphase development project discussed in the video. It is used as a specific example to illustrate the real estate investment opportunity in Phuket, with details on the different phases of the project, such as Andaman Riviera and Anamon Boutique Residences, and their respective investment yields.

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