Buyers Guide Koh Phangan
06
May

Buyers Guide Koh Phangan

Koh Phangan is one of the most  famous islands in Thailand. Most people choose Koh Phangan because of the exotic surrounding and the beauty which is still not spoilt by the pollution. From the investment point of view, this Island is a perfect choice for investors who are seeking higher returns. 

  • The island has 12,000 inhabitants.

  • Travel time Total 35-40 minutes drive from coast to coast..

  • The nearest airport is a Koh Samui.

  • The island holds 5 main areas: North / West / Central / South /  East. Each area has its own character and charm.

Buyers Guide Koh Phangan

Koh Phangan Map

north

Families / beaches

 

 

West

Families / Yoga / Restaurants / Vegetarian

Center

Island Ferries Center, markets

South

Parties / Paul Moon / International School

East

5 star hotels / beaches


Koh Phangan Investment 

If you are looking to invest in Koh Phangan, the options are wide. Do  you want a villa directly on the beach or one that has an amazing sea view?  Property prices are depending on the location and its specifications.

How to choose land:

The land types can be classified into three types:

  • Jungle Lands

  • Sea View lands

  • BeachFront Lands

Generally, the price of land is directly related to the quality of the landscape and the comfort for construction and access to the property. It is obligatory to check with every land the following information:

  1. “Land paper” type (explained on the next page).

  2. Access ways – whether access to land is by a government road or private road, is the road paved.

  3. The angle of the slope where the land is and its topography (rocks, water channels, flooding) will all affect the land development process and of course the final costs.

  4. Water – Is there a government water connection? Is it necessary to dig a water well?

  5. Electricity – Where is the closest connection to the electricity company?

  6. Sea level – building regulations may vary according to property sea level and the distance from the sea

.Buyers Guide Koh Phangan

Koh Phangan building regulation map

Every color represents a set of building rules. 


Land paper

When approaching to purchase land or property, make sure that the type of the land ownership document is one of the following:

  1. Chanote

  2. Nor Sor 3

  3. Nor Sor 3 Gor

  •  The land papers are issued by the government of Thailand and constitute a legal document.

  • Every prospective buyer must verify through the paper and through a local attorney that the seller is indeed the legal owner of the requested property and that the property is free of liens and mortgages.

  • The actual purchase transaction is done directly with the members of the local land office, who verify the details of the transaction and only then make the exchange.

  • A Chanot document with a red stamp at the top of the document is the highest level of land in Thailand – meaning that some parts have known and final boundaries, and no parts of them will be expropriated in the future.

  • In every sale of land there is a sales tax which is evenly divided between the buyer and the seller.

  • Buyers Guide Koh Phangan

In Thailand, the size of the land is calculated by a local unit of measure, called: rai. 

Follow the chart for below area size calculations:

1 Rai=

1 Ngan=

1 Square Wa =

1600 sq. M

400 sqm

4 sqm


Types of Real Estate Transactions

In Thailand, the procedure for acquiring and leasing property by foreign nationals is perfectly legal and straightforward when operating in an orderly fashion and arranging the necessary paperwork with the help of a local attorney.

Koh Phangan Real estate deals can be considered into two types: Buy (Freehold) or long-term lease(Leasehold).

Buy (Freehold)

  • In order to make a primary property purchase, a Thai company must be established and a bank account opened, to which the money intended for purchase must be transferred. This is a simple procedure that takes about 2 to 4 weeks and is performed with the help of a local attorney.

  • After transferring the payment to the seller, the property passes ownership and at the end of the process, the buyer receives a ownership document with the company name on the paper.

important points:

  • A foreigner can own up to 49% of the land or alternatively be a partner in a company that owns the land at the same percentage of ownership.

  • If you can’t invent Thai partners to start a company, the lawyer can provide it at an additional cost.

Long Term Rental (Leasehold)

  • Another way to invest in real estate in Thailand is through a long-term lease.

  • Land can be leased for 30 years with two additional extensions of 30 years at a time and a total lease for a period of 90 years.

  • Such a transaction price will usually be slightly cheaper than a Freehold deal, but not significantly.

important points:

  • In such a lease, the contract must be made official in the Land Department – by paying a fee of 1.1% of the value of the contract

  • The benefit of a lease is the savings in the Thai company mechanism and its associated costs (construction, annual reports), as well as a reduced tax rate on the profits from the property.


Plan & Permit your property

In all construction works, the plan and permit stage is essential than the building itself. Thailand requires that all your architectural drawings be completed by a licensed Thai architect and engineer. Furthermore, the Thailand measurement system and language must be used in the drawings. The drawings will have to comply with Thai regulations as well as the juristic authority. It takes 2-4 months to complete the plan and permit. Steps to be taken:

  • Topographical survey

The survey is a drawing of the land used in identification and mapping of contours of the ground and those features that exist below or slightly above the earth’s surface e.g. trees, rivers etc.

  • Architectural planning

It is recommended to choose an architect who understands and follows building regulations and zoning laws of the island, knows the local building materials, and can provide service including a building permit. 

        3.Building permit

You will need permission to build your property which you apply for at the local government. The architect will prepare the house plans and submit them for a building permit. There is a government fee for a building permit.


About Construction 

Choosing the right contractor can make all the difference between a successful project and a failure, so it is important to choose an experienced contractor who builds and builds on the island. A “construction list” of professionals, contractors and a price list will be given as a gift on every property planning order with Siem Design!

 Construction costs

construction price can rise over time due to market forces. But to provide you an estimate, the construction price for homes in Thailand is somewhere between 15,000 baht to 30,000 baht per square meter. It can be higher if you want to construct a luxury, high-spec project. Similarly, the construction price can also be less if you want a small, low-spec house.

Construction time

Duration of average villa – size 150 sqm – 6-8 months of work.

Main construction building phase:

  1. Foundations

  2. Ground floor

  3. Roofs

  4. Exterior walls

  5. Delivery 

Construction supervision/Project management

After choosing a land and planning the dream property , it’s time to find a supervisor who will be your eyes and ears during the construction itself. The Supervisor shall ensure that construction proceeds in accordance with the plan, the quality of the selected products and schedules, from planning through construction to finalization and delivery.

 important points:

  • It is recommended that you sign a contract with the contractor – clearly define project details, schedules, material types and payment stages.

  • You can get 2-3 bids and make a comparison


Return on Investment 

Calculating the return on the property depends on the nature of the rentals you make. The are short-term rentals- daily rentals or long-term rentals – monthly rentals.

Rentals Type

Short Term – Daily Rentals:

  • Higher investment per square meter of construction / buying

  • Intensive advertising of the property

  • Multi-tenant, (multiple receipts and departures,accelerated wear and tear, greater engagement)

  • Higher yield

  • Calculation according to 6 months of occupancy

  • Management costs (Asset Management fees range from 15% to 25%)

Long Term – Monthly Rentals:

  • Lower investment per square meter of construction / buying

  • Less frequent advertising

  • Minority of renters

  • Lower yield

  •  Calculation according to 8 months of occupancy


Invest in Thailand, and enjoy a holiday home in the most beautiful place in the world.

For further questions and details, contact Siam Design now

                                               +66 – 0910 275 441

                                             www.siam-design.com

                                            hello@siam-design.com