What to do with 10 million baht?
The downturn has had a definite upside for anyone planning to relocate in Thailand. To woo foreign investors, the government has revived the investment visa, which was first introduced in the aftermath of the catastrophic Asian Crisis of 1997.
In common with many countries around the world, Thailand is keen to attract well-off retired and semi-retired foreigners who can appreciate its phenomenal quality of life and, in return, give the economy a boost.
Thailand made its killer move in the global scramble for high-quality residents by introducing an attractive new visa – albeit one with a price tag of 10 million baht.
The investment visa offers the right to live in Thailand to anyone bringing 10 million baht into the country and putting it into the property, government bonds or an account in a Thai bank – or any combination of those three that hits eight digits in baht.
Holders are prohibited from earning a wage in Thailand but should get an unlimited right to stay here – as long as they remember to renew their visa annually.
Expats who took up the earlier version of the investment visa – which required an investment of only 3 million baht – still have the right to live in Thailand even after their visa was abolished in 2006.
Another attraction is that the investment visa has no age restriction. The retirement visa – which requires a monthly income of 65,000 baht or an 800,000-baht bank deposit – is only open to foreigners who are at least 50 years old.
So, the problem is: where to put your 10 million baht?
Unsurprisingly, as a real estate agent, I am going to say your best bet is property. But it is, anyway. For a start, it saves on rent. The return is also way above what bonds and bank deposits are offering.
Your options with 10 million baht in Thailand’s current property market are also fairly broad. This is not a tremendous sum for many expats – it works out at about €245,000, $320,000 but it can get a desirable property in Bangkok or in Thailand’s resort destinations.
Bangkok residents with an eye on investment should consider that 80% of expats are looking to buy or rent freehold condominiums in Central Business District close to BTS or MRT. At the moment, 10,000,000THB allows purchasing a 1 bedroom luxury condominium, 2 bedroom high-end condominiums or 3 bedrooms in an older building with the ability to renovate at its taste.
Alternatively, 10 million baht could get you a spacious villa at the seaside, with a swimming pool and 800 square meters of ground (although your ownership rights are much less clear than with a condo).
But the best of both worlds could be to pick up a pair of condos: one in the city and another in a resort town. This can open up an income stream as well as cheap weekends at the beach.
Rental incomes of between 5% and 7% are quite feasible in Thailand – way above what most markets can offer.
If you opt to buy in a resort and are looking for a return, you should consider what the market wants – which is to be as near the beach as possible. A beach-front studio usually trumps a one-bedroom condo that is a kilometer away from the sea – although being near a golf course is another major draw.
In my view, Bangkok-based expats could definitively consider a weekend place in Pattaya, Phuket, Samui, Chiang Mai or Hua Hin. In their extremely different ways, they provide a comprehensive antidote to the city within a couple of hours’ drive or fly, and they also offer opportunities for renting out accommodation on a short-term basis, allowing to reach attractive yield in a short period of the year.
I would add here that, if you are the sort of person who reacts badly to Pattaya’s earthy sense of fun, you might be surprised how family-friendly Pattaya and Jomtien have become – much more about golfing than ping-pong, these days.
Still, if you appreciate the tranquility and traditional Thai culture, you could well find your spiritual home in the royal resort of Hua Hin, where Bangkok’s haute monde have been spending their weekends for almost a century now.
For the Island definitely, Phuket and Samui have the most sophisticated markets and will allow you to own a piece of these paradise places.
But wherever you choose to buy a second home, it can pay to find a development offering a guaranteed rental income. Many projects in Bangkok, as well as resort destinations, now deliver a guaranteed return. If you are happy to wait, you can also pick up great bargains by buying off-plan but with the payment scheme, you may not have the ability to get your investment visa unless you transfer all the money in a bank account in Thailand, by the way, this solution avoids you currency fluctuation.