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What Rental Income can I expect in Phuket?

Category : Buying | Posted On 2018-09-10 00:00:00

What Rental Income can I expect in Phuket?

In general, there are three ways to generate profit from your property: either through the exchange rate, capital appreciation or rental income.

The most common ratio used for rental income is "rental yield", which is the rental revenue received in one year divided by the purchase price of the property. Rental yield is a way to compare and analyze properties in Phuket. If the property has been a rental the seller usually can provide rental history. Most developers of new construction will have rental estimate figures ready for buyers.

Maximizing rental income requires some planning and fundamental decisions to be made prior to purchase. Location is always one of the key factors when choosing a rental property. The West side of Phuket has been proven to provide strong rental returns to investors. The beaches on the West side of Phuket are white sand with clear blue water. 

Properties within walking distance of a beach do very well in Phuket. Not only are they in high demand but command a higher nightly rental rate. Travelers looking for accommodations in Phuket are wanting to be close to the beach. Some properties offer a shuttle giving owners and their guests more flexibility. 

When evaluating rental properties, think of their rental potential and rental packaging. What are the distinguishing features or attributes that are valued by the rental market? For example, "great location with sunset views from the rooftop pool ... five-minute walk to the beach ... private location ... close to restaurants, bars, and nightlife."

Alternatively, properties can be distinguished by architectural design, facilities or being close to something like golf. A rental property needs to distinguish itself in some way that is valued by the rental community, which is a great way to maintain higher occupancy levels and achieve higher rates per night.

It is common now to see "guaranteed return" being offered for new condominium construction. These developers are offering anywhere between 5-10% guaranteed rental returns per year. The number of years and percent can vary from property to property. Many will offer the owner 1 month a year usage in addition to this rental return. Make sure that the rental guarantee is in the contract.

Phuket has many professional management companies to manage your property. CBRE, Knight/Frank and LLJ are all on the island and will professionally manage your rentals and property. Airbnb is also gaining in popularity in Phuket.

Investors are averaging between 6-10% annually for rental income in Phuket.

For more information about rental income, call us today at +66 93 606 0906

 

Phuket Realtor
David Henry
David Henry is known for his integrity, high energy and hard work which goes into every detail or your real estate transaction at Phuket Realtor. David grew up in the Boston area and started as a realtor in his 20's. With over 30 years of experience in real estate, he has now started one of the best independent real estate agencies in Thailand.

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