Villa or condominium? What to choose for investment?

When buying real estate in Thailand, especially in Phuket, for investment purposes, investors often have the question of which type of property to choose, a villa or an apartment in a condominium.

Let's consider the pros and cons of each type from an investment point of view.

Let's start with the numbers:

Entry barrier

Condominiums - approximately from 3 million Thai baht.
Villas - from 20 million baht and up to infinity.
Thus, in terms of price, for the price of a villa in Phuket, you can purchase 6-7 units in a condominium.

Profitability

Investment apartments in condominiums usually participate in developer profitability programs, based on which the annual return is formed. There are two main investment programs in Phuket:

Guaranteed rental income

It is usually applied in the first 3-5 years after the property is put into operation and amounts to 5-7% per annum.

Rental pool

Under this program, all rental income from a pool of similar apartments is evenly divided among them and distributed between the management company and the property owner at a ratio of 50/50, 40/60, 30/70.

Living in your own property

Owners of investment apartments in condominiums are usually limited by contract in terms of staying in their apartments. Usually, they have the opportunity to live there for about 30 days a year, plus there may be restrictions depending on the season.
Living in your own villa generally has no restrictions. The owner usually hires a management company on their own terms. But it is worth considering that living in the villa during the season means losing a significant portion of the income.

The procedure for purchasing

The procedure for purchasing a condominium in Phuket is much simpler than buying a villa. A condominium can be registered to an individual as full ownership (freehold) or as a long-term lease (leasehold). To buy a villa in full ownership, you need to have your own company, which adds costs and imposes certain obligations and difficulties. This is because land cannot be registered to an individual in Thailand.

When purchasing a condominium in Phuket, one of the conditions for participating in investment programs is the purchase of a furniture package. Thus, the owner does not have the opportunity to furnish the apartment to their liking. With villas, there is usually no such restriction. But there are exceptions where investment programs from the developer are also offered for villas, and there is a need to purchase a furniture package.

An investment apartment in a condominium allows you to receive passive income to your bank account. The management company takes care of all responsibilities for maintenance, rental management, etc.
And a villa is more about business. Here, the owner will have to solve management, rental, repair issues themselves, or hire a management company or trusted individuals to rely on.

In the end, it's up to you to decide what to choose for real estate investment in Phuket. And we are ready to help you choose the right investment strategy and buy real estate according to your wishes, criteria, and possibilities.