Phuket Property What is The Secret to Successful Rentals?

But there are some other things for you to consider….

Villa or Apartment?

This is simple supply and demand. So if you buy an apartment you’ll have more competition. Well, almost. There are a lot more apartments for rent in Phuket than villas. This affects what you can charge – especially out of season.

There is a large demand for villas – especially during high season. So you will have less competition on price. But there are a few other things you should think about. In fact – at the high-end – I’d even say there was a shortage of rental villas during high-season.

Maintenance costs are usually lower for apartments. Remember, a villa comes with extra costs for gardening, pool cleaning and exterior maintenance. And the management company will look after the common areas and buildings. These are on-top of your management and common area fees.

So check out ALL the costs so you know what your bottom line will be. And obviously – consider your personal preference if you will be staying there. Are guaranteed returns a good thing?

As you probably know, some developers in Phuket now offer ‘guaranteed’ returns from 6% to 8%. You’ll get 30 to 60 days a year to use your property. There have been a few cases of developers not paying the rental guarantee at all. But make sure you buy from a reputable developer. And the management company will take care of your rentals for you.

The downside?

There are often blackout periods when you can’t use your property. And ask the developer for a discount equal to the rental guarantee. These are usually at peak periods like Christmas, New Year and Chinese New Year. If this doesn’t suit you – you may prefer to rent your apartment using local agents.

Branded vs. Non-branded

These days, you can buy property at several branded hotels and resorts in Phuket. They’ll also make sure you are paid on time. On the plus side – you are likely to get higher occupancy due to the brand. The hotel staff will take care of all your marketing, check-in, check-out, maintenance, pool cleaning and maid service.

Branded properties usually offer a rental program and sometimes a guaranteed return. And there are often lots of facilities for you and your guests – sometimes even a golf course.

Drawbacks?

You may have to give a minimum of 60 days’ notice before you can use your property. So you can’t just turn up – even if your property is empty.

And you will often pay much higher common area and management fees.

In fact, sometimes the fees are so high they will wipe-out any rental income you make.

Again – make sure you know what your bottom line is. If there is no rental guarantee – ask to see occupancy rates, average rental rates and average fees. With a property on a non-branded estate – your costs are likely to be far lower. How much did owners of similar properties make in rental income over the past few years? But your rentals will be more hit and miss.

And you’ll need to hire a local management company to take care of arrivals, departures, maid service, pool cleaning, gardening and maintenance.

Short term or long term?

Short-term rentals generally mean you can charge higher rates. But you need to be constantly marketing. And you will have times when your property is empty.

There is often much more wear and tear on properties which are used for holiday lets. And you will also have more competition. If you rent long term – your income may be less each week but it will be stable.

Your guests are also more likely to take good care of your property. So your maintenance costs will usually be lower. If you want to know more about renting your Phuket property…