Choosing Right Property Developers in Phuket
Choosing right property developers in Phuket probably one of the main things to pay attention when buying property. When purchasing a property, especially if it’s an off-plan project, not factoring the developer’s profile in to the equation would be a huge mistake. The developer’s previous projects, their track report, completion rates, financial stability all need to be investigated before deciding.
The best way to find out all the details about a developer is the combination of your own investigation, listening to the market’s professionals and working with a lawyer to run a proper due diligence on both project and the developer.
Property Developers in Phuket
There are so many competent property developers in Phuket, both local and foreign, who possess extensive market expertise. However, it’s essential to recognize that no developer is immune to challenges, even large corporations. Any disruptions in the market can potentially impact even the most established companies. In such cases, the buyer assumes the corresponding personal risk associated with their chosen developer.
Property developers in Phuket span a spectrum, ranging from small local and foreign companies to large enterprises, with some local developers being listed on the Thai stock exchange and certain international developers being listed on exchanges in their home countries. Assessing the financial stability of a listed company is relatively straightforward, but it’s important to note that a foreign company’s solid balance sheet in its home country doesn’t guarantee it won’t withdraw support from an overseas venture that encounters difficulties.
Evaluating the finances of private companies is more challenging, although it’s not to say that private companies should be dismissed as a poor choice. A reputable private company with audited accounts generally indicates transparency and a well-managed operation. Size can make a difference, particularly for local buyers. Projects from well-established Thai companies often enjoy high demand based on their reputation alone, selling out quickly and commanding stable prices. This aspect also holds relevance for foreign buyers, considering that Thai ownership must account for 51% of any condominium. The strong demand and price stability associated with developments by established developers offer a certain level of stability for foreign buyers and investors.
Opting for established companies generally entails less risk for buyers compared to “one-man show” property developers in Phuket, especially those launching their inaugural project. Many developers rely on their reputation to attract buyers for future ventures, and those who have built a solid track record deserve the recognition they receive. Nonetheless, everyone is susceptible to making mistakes, and developers can face financial challenges stemming from a variety of factors, ranging from unforeseen circumstances to self-inflicted issues or simply bad luck. Issues may include shareholders misusing company funds, excessive debt, mismanagement of projects, unfavorable location choices, or changes in regulations and zoning assessments that halt projects at any stage of construction.
Buyers who engage with smaller developers also face the risk of “Main Man” uncertainty. What would happen if the managing director, senior partner, or owner were to pass away? Are there any provisions or insurance in place to safeguard the company and the investors in such an event? In reality, such provisions are rarely made by key individuals to protect the interests of the company or investors. When dealing with a private company, it is prudent for buyers to inquire about such provisions.
In conclusion, while previous developments and reputation should not be the sole criteria for selecting a property, private property developers in Phuket should not be disregarded either. Conducting thorough due diligence on every developer significantly reduces the risk of encountering problems. If there are many question marks let alone reg flags, it might be a good idea to stay away from that developer or project at the end of the day.
If you would like to find out more about property ownerships in Thailand, please check the article below;
Freehold and Leasehold Property Ownership in Thailand
