What are the reasons why one should invest in real estate? One common reason is that it gives them a roof over their heads. That’s why people always make it a point to invest in residential real estate. They can live on that house, or condo unit, so they can have a home that they can call their own.
Another motivation to investing in real estate is to make money. Hence, people invest in commercial real estate. They can earn money from such properties through various ways. Well, people can also earn from residential properties but the income margin is significantly more narrow as compared to earning money through commercial properties.
As a foreigner in Thailand, your only option to own real estate property in your name without marrying a local or establishing a business is to buy a condominium. Of course, we all know that a condo unit is more than just a place to live. You can earn money from it the way you would if it is a commercial property.
That’s what makes a condominium unique!
Leasing is the way to go
Leasing is actually an option for foreigners to pick, if there are no units available in a condominium project that they are interested in. This happens when all the units that are allocated to foreigners in a project have been bought up. You see, Thai law only allows developers to sell 40% of their projects to foreign owners. The rest must be owned by local Thais.
With leasing, foreigners can become de facto owners of a condominium unit. A long-term lease agreement will allow expatriates to use and develop the condo unit at will, provided that it is stipulated in the lease agreement signed with the original owner of the condominium. You cannot sell it, of course, because it’s not yours under the law.
Because you’re the de facto “owner” of the condominium, you can take measures to ensure that you earn money from that investment as well. How do you do that? You sub-lease the unit to your friends or other interested third parties!
Is that legal?
It is totally legal! All you need to make sure of is to put that clause into your leasing agreement with the original owner. This is a legal confirmation that the owner agrees that you lease the condominium to third parties.
That’s why you need to have a legal advisor on your side when negotiating lease agreements. He can advise you on what clauses or stipulations should be in the fine print, depending on your intentions and goals for the unit.
Lease versus Rent
Lease is more advantageous than renting, because it is a long-term agreement. Renting, on the other hand, is generally long term and does not afford much powers to the renter as to what to do with the unit. Leasing, on the other hand, transfers some authority over the unit to the lessee, with the exception of the authority to sell.
See, a condominium is more than just a place to live. It can also be an avenue for you to earn money from.
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