if your aim is to acquire a property with the objective of renting it out to make a profit, without being hindered by the constraints that rental management may represent (inventory of fixtures, relations with tenants, maintenance of the accommodation etc.), we advise you to buy in a residence with hotel management. It is the surest way to make a Thailand rental real property investment.
Profit sharing is the sharing of profits from the leasing of the property between the hotel management company and the investors. In order to determine it, it is necessary to know how the management company defines the rental income (before or after deduction of charges taken by reservation sites, before or after deduction of charges…).
“Individual” profit sharing refers to the sharing of rental income from the owner’s apartment with the manager. However, “individual” profit sharing does not allow equity between investors. Certain owners being on the spot, or often relaunching the managers on the performance of their apartment will have more chances to see their profitability assured than “silent” owners who may find it difficult to see their apartment rented because it is not a priority.
“Grouped” profit sharing refers to the distribution of all the profits generated by the building among all the investors owning an apartment in this building in an equitable manner. The overall profit is distributed in proportion to the investment made.
Contractual returns allows you to benefit from rental income on your property at a contractually fixed rate, whether it is occupied or not. This income is defined annually by the developer and can be paid quarterly or monthly depending on the development. This allows you to benefit from a secure rental profitability, with rental income which is backed up by a written contract.
This rental profitability is combined with hotel management in many investor programs : it is the hotel organization that takes care of the total management of the property : communication, rental (often nightly with tourist rentals), maintenance of your property and receipt of income.
Usually, when an investor buys a new development off-plan, he makes payments per phase according to the progress of the work, locking in large sums of money without a return on investment for several years.
Cashback is a system whereby the investor chooses to pay in full for his property before the end of the work – as soon as the contract is signed. In return, the developer immediately pays back the sums paid up to a given percentage, until the building is delivered. After delivery, the rental return period takes over.
This is a win-win system since the sums paid by the investor finance the work and avoid the developer having to borrow at high variable rates.
The buy back is the engagement from the developer to buy back your property after the period of rental returns defined by contract. This is an option that allows the repayment of the initial capital at the end of the investment since in most cases the developer buys back the property at the initial price. It can be noted that in certain cases, the capital gain of the repurchase price is fixed beforehand. Finally, if the investor wishes to redeem his property, he must notify the developer in advance, within a period specified in the contract.
DISCLAIMER : All the information contained in this FAQ is given for information purposes only and is not official information. It is a popularization of problems, some of which (property law and taxation in particular) require the opinion of experts and individual treatment on a case-by-case basis. Although TPG has produced this content in good faith, with the aim of providing information that is as accurate as possible, it cannot be held responsible if certain information proves to be inaccurate.