Buyers beware: look at the facts

If it sounds too good to be true then it probably is.

I have noticed several real estate agents “offering” investment units at a yet-to-launch central Bangkok condo with “potential yields of between 30 percent to 50 percent within two years”.

In my opinion they are really putting their reputations on the line with that bold statement.

Sure, the new development in Asoke boasts a great location – just 250 metres from BTS Petchburi and a 10-minute walk to the Asoke interchange.

The new Bangkok launch will also be developed by a Stock Exchange of Thailand-listed property developer, so in terms of a track record it has everything.

Units are expected to be priced from THB 5.5 million upwards, but is it really possible to expect such high “potential yields” in such a short space of time?

My opinion is no.

For sure there has been capital appreciation in condos that have launched in the same area over the past few years, but all the recent research point towards a slowdown in prime property prices – and this must be classed as prime simply by its location.

For buy-to-rent investors they should realistically expect no more than 7 percent per annum, but perhaps a percentage point more for the larger units – and a larger initial investment.

If the developer opts to offer guaranteed returns I very much doubt they will be in the range of 30 to 50 percent over two years, but that’s yet to be seen. This is one developer that hasn’t seen the need to market their new launches with guaranteed returns in the past.

All in all, this is a warning. Buyers beware. Don’t believe everything you read, especially when it sounds too good and comes from sources with the sole goal of selling property.

You will not be able to use these “claims” when, two years after completion your expectations are not being met.