The Basics of Buying Property on Koh Samui

The Basics of Buying Property on Koh Samui

Buying a property on Koh Samui is not as simple as it may seem. Before you start on this path, you need to know all the facts and legal considerations implied by this decision. Below we will present a short and useful guide to buying real estate in Koh Samui. These advices and information will help you find and purchase the right type of property for your needs and investment goals.

The legal issues

The real estate laws in Thailand are very different compared to those from your home country so when you are planning on buying a property on Koh Samui, it is recommended that you study all the available legal options and conditions. Do not ignore this aspect as it is the main factor in ensuring the success of your purchase.

Choose the location wisely

Even though Koh Samui measures only 247 km², the land characteristics vary considerably from one part of the island to the other. When you buy a property here, it is advisable to consider all the particularities of the location. The most popular and crowded places on the island are Chaweng, Bo Phut and Choeng Mon. These are near all the major tourist spots, communication points, hospitals and commercial areas. The downside is that these are more expensive and difficult to find. If you want to invest your money wisely then you should consider a calmer and less populated part of the island where the prices are lower. After all, driving across the island takes only 45 minutes.

Choosing the real estate agent

Because a foreigner does not have enough understanding of the real estate market in Koh Samui, there is a huge need of hiring a real estate agent that will conduct the entire search and find the perfect property that meets the buyer’s requirements regarding price, location, and size.

The type of property

Foreigners who are interested in buying a house, apartment, condominium or townhouse in Koh Samui are subject to very strict Thai regulations. The most important Thai law that you should be aware of is that a foreigner cannot hold the freehold of land on his own name. The alternatives are to lease the land or buy it through a Thai limited company.

The Koh Samui rental market

If you plan on buying a property on Koh Samui so you can rent it to tourists who are looking to spend a holiday on the island then you need to have a better understanding of the rental market. You should start by researching the Internet to check out the rental prices for different types of properties on Koh Samui.

Your finance options

As a foreigner, it isn’t easy to get a loan from a Thai financial institution. Usually, the developer offers financing options for potential buyers, but if you aren’t offered this choice then you should consider a loan in your home country. Also, in almost every case the price of the property is negotiable as long as you have the funds ready. If you ask the seller to wait until you get a loan then he will no longer respect the negotiated price.

Building Guarantees

When you buy a real estate that has a condominium title you also get a 5 years structural guarantee and 2 years non-structural defects warranty. This is the basic guarantee period that is regulated by the Government. In some cases, the developer may offer an extended guarantee to attract even more customers.

The non-condominium projects guarantees aren’t regulated by the government so you need to negotiate it with the developer. Below you have a short list of the available guarantees.

Structural Guarantee

This is the most important guarantee and some of the best developers attract their customers with a 10 years structural guarantee. This type of guarantee includes- floor slabs, foundation beams, retaining walls, roof structures, load bearing walls and many other structural parts of the building.

Defects Guarantee

The parts of the building that aren’t covered by the Structural Guarantee are usually covered by the Defects Guarantee, such as bad tile work and chipped plaster board.

Manufacturer’s Guarantee

This guarantee applies to items that are added to the main structure of the building, such as pool pumps, air conditioning, and kitchen items.

Besides all the above-mentioned details, it is highly advisable to find out what is the developer’s policy regarding "snagging”. This is the stage where the developer corrects the small mistakes prior to the building’s completion. Usually, these defects are harder to fix after the building has been completed.