The Attraction of Rental Income

Investors in the Phuket property sector are also drawn to the potential of rental income.

You can read more about how Phuket’s rental market is one of the key drivers for real estate below: 

Demand for Rental Income on Phuket Property

Phuket’s tourist industry has grown exponentially over the last 45 years, and this influx of tourism continues to drive the rental market. But the market has not been without its challenges.

During the last two decades alone, Phuket has been through the Asian Crisis, the Indian Ocean Tsunami and the global financial crisis.   The resilience of the holiday industry in the face of these three catastrophic events is telling.

And what it tells you is that the property rental market in Phuket will continue to flourish.

In the current low interest rate environment, investors don’t know where to put their money.  Viewed purely from a Return on Investment (ROI) standpoint, the choice between a guaranteed rental return and leaving money in the bank to earn little or no interest isn’t a hard one to make.

Some countries, such as Switzerland, now have negative interest rates.  This means if you deposit too much money in the bank, the bank will actually charge you to keep it there.  (Some banks are taking the same action against large depositors in Euro accounts.)

For anyone faced with paying the bank to deposit money, an investment in Phuket real estate is a no-brainer.

How Does the Rental Potential Compare to Other Countries?

In other popular holiday destinations rental yields in the high seasons are similar. However, most of Europe has a protracted low season which attracts little or no rental business.  Phuket, on the other hand, offers year-round rental potential (with the only possible exceptions being the extremely rainy months of September and October.)

The ROI is therefore far superior in Phuket than in other countries, which can face 4 to 6-month lulls in rentals.

It should be pointed out that the short-term rental market faces the same challenges Airbnb properties have seen in other countries.  Current legislation states that condominium or villa owners may not rent a property for less than one month without a hotel license.

But new “Condotel” developments, which combine a hotel license with freehold ownership for foreigners, are able to overcome this.