Deposits of 20-30% and no further payments until build completion sounds too good to be true, doesn’t it? Welcome to the world of buying property off plan in Bangkok, Thailand.
What is Buying ‘Off Plan’ Property?
For those of you unfamiliar with the term buying ‘off plan’ it refers to buying a property off the plans themselves – detailed CAD drawings and specifications, rather than when the build has been completed. Buying off plan can start before a single piece of concrete has been mixed or part way through the build process. Speculating early can lead to handsome returns.
Sounds crazy, huh? Not when you consider the big developers have considerable influence and knowledge on the areas surrounding their development plots – they know where to build. Several recent developments have been known to appreciate in value considerably while they are still being built! You guarantee the purchase price and your property at the point of deposit and have the chance to witness an increase in value without having to pay any further money until build completion. Of course, there are risks attached to buying off plan, just like any other purchase of property anywhere in the world. However, plans are usually very detailed, and by teaming up with an experienced Real Estate agent in Thailand you can be reassured that you are making a calculated investment. The big property developers in Bangkok don’t speculate by developing land in the middle of nowhere – they know where infrastructure is at its peak or likely to be improved considerably in the coming years. Their aim is to purchase / develop the land that provides the best return for them, and this has a knock-on effect of rewarding buyers of such property.
Big Developers Dominating Thailand Property
The big PLC property developers are dominating Bangkok’s Real Estate industry. They have the backing of the banks and their own cash for developing land in Bangkok’s most desirable and up and coming areas. Unlike in some other parts of Thailand, where smaller developers are prone to asking for large up front payments from buyers, the developers in Bangkok have access to the cash to fund the projects and don’t need your money to make it happen. They ask for a nominal figure to confirm your intentions and reserve your property for you, but there are deals available where the remainder isn’t paid over until the unit has finished being built. This can prove lucrative if you buy in the right area, as the price agreed at the beginning is the price you pay. In desirable areas there is a strong likelihood that the price of the property will actually increase while it is being completed.
Typical Off Plan Payment Plan
When you have decided to purchase a property off plan, you will be asked to make a booking payment (usually $1,000 – $2,000) to reinforce your intentions. In Thailand this is generally a non-refundable booking, so please be aware of that. The seller will reserve the property for you and within one month you will be required to pay the contract deposit (usually 20% – 30%). The developer activates the drafting up contracts once this contract deposit has been received. In Bangkok, usually no other payments are required until the completion of the build, giving you time to raise the remainder of the capital if you are short of the full amount.
Common Terms & Conditions
Be aware that according to standard developer contracts they state that the buyer must complete the final payment within 30 days of written notice by the developer of project completion. This means that sometimes developments are completed in advance of their stated dates and buyers must be ready to pay the balance whenever the developer gives this 30 days notice. On the other hand, there are standard delay clauses in the contract, which must be included by Thai law to protect the developer for up to 6 or 12 months delay – this is due to the climate in Thailand and 6 month rainy season. In our experience, investors worry far more about delays in projects being built but a project being completed slightly in advance is much more common.
Check Out These Two Pre-Launch Sales!
Find Thai Property
Tailored Service For Overseas Buyers