This is a follow-up to our Silver Linings Part 1 article where we discussed some cost-effective ideas for sellers to improve and prepare their homes for listing on the sale market. As most people are aware, the Covid crisis is taking a huge toll on the economy worldwide. Once the pandemic is over, we expect the Thai (and global) real estate market to suffer the after effects for a period of time, perhaps for years to come. While this is, of course, bad news for sellers, there are some silver linings that could come out of this situation.
The first positive thing is that some buyers have turned into renters, at least for the time being. Either because their financial situation has changed or they want to wait and see how the market evolves after the Coronavirus, some buyers are putting off the purchase of a home for the immediate future. However, some of these clients are already in Thailand and have shifted their criteria to renting, either long or short term, which is good news. Rental income can be lucrative, and leasing out a property is a great way to earn money while waiting for the market to improve. Obviously, if you’re living in the house, this might not work, but if you’ve already moved out or if your property was a holiday home, your house and your pocketbook could both benefit from a tenant occupying it.
It’s never good for a house to stay empty, and this is especially true for properties in the tropics. Bugs, rodents and pigeons take up residence quickly, and things like plumbing and electrical lines need to be used. In order to offset maintenance/operational costs and to avoid repairs due to vacancy, it could be beneficial to consider renting your property. We have received inquiries over the past few weeks from both long term and short term rental clients. There are currently people looking to either relocate from Bangkok or other areas within Thailand, or even just change up their rental properties within Hua Hin. We are fortunate to have a lot of long term and repeat rental clients, many of whom have been working with us for several years. When clients find a good property that is well-maintained and a professional agency, they tend to stick with what they know and trust.
On a related note, this is the perfect opportunity for buyers to purchase a rental investment property. With prices cooling and the aforementioned demand for rental homes, a buyer could easily purchase a home below market value and immediately begin generating revenue. For the reasons listed above, a lot of would-be buyers are choosing to rent, so you would have a captive audience. Although sale prices are falling for now, the rental prices have remained relatively stable and the demand has not dropped.
Furthermore, once the pandemic is over, Thailand may see an influx of property investors from countries like the UK, France, Germany, Canada and the USA. Thailand’s numbers of confirmed cases and the death toll from the Coronavirus are much lower than in the West and even lower than most other neighboring SE Asian countries. European and North American buyers may show renewed interest in Thai real estate, especially if the prices stay low and the strength of the Thai Baht softens. Thailand still offers a much more affordable lifestyle than in the West, and relative to other SE Asian countries, it has superior infrastructure: good hospitals and health care, reliable internet, consistent power and water supply, better roads, etc.
Some of the newly unemployed in Europe and North America may decide to take an early retirement rather than plunge back into the workforce. If this is the case, those new retirees could very well be looking for a way to stretch their savings and scale down their expenses, either by purchasing a home or renting a property on a long term basis. Moving to Thailand is a viable solution for people to live a more comfortable retirement on a smaller budget. And Thailand has some great medical facilities with Bumrungrad and Samtivej consistently ranked as two of the top hospitals in the world, so older expats can feel secure knowing that they have access to high quality medical care.
Like everything in life, we will get through this difficult period, and the market will eventually recover. It is important to stay positive and be productive during this crisis, and we can continue to look for alternative sources of revenue for your property and ways to achieve your goals, whether you are a seller, a potential buyer or a rental client. We are always available for consultations—mostly virtual these days—and can help answer any property-related questions. Thank you for reading, and stay safe and healthy!