More buyers than ever before are choosing branded residences as their second home. Let’s face it, unless you plan to be in Phuket for a significant part of the year, then a fully maintained stylish property that also earns you monthly income is an attractive way to go with ‘Hands Free’ returns of anywhere between 5-10% p.a., and often guaranteed.
As property specialists, we would add the exemplary value at the time of re-sale. It is not just about capital growth, it is also about the property condition and the furnishings. There is great joy from owning a Phuket property but the fact is that unless it’s kept it in tip-top condition every year, it can be hard to resell and you may not get the full price you want.
Branded properties offer a solution. Keeping it as fresh as the day you bought it means an easier and better priced re-sale as well as the enjoyment and income to be enjoyed whilst owning it.
There is a lot more lifestyle value than first meets the eye. Branded properties are usually in locations that mere mortals or small developers simply could not afford. The property price for the location, the facilities and the design and fittings is more affordable to many, and even though the effective price per sqm is high, there is a lot provided in the sales price when adding in the facilities, the trained staff and technicians, the professional hotel room selling operation and the quality restaurants, bars and spa that grace the project.
So what’s the deal?
Most schemes limit your personal usage to between 30 and 60 days per year – which is often more than enough for most owners. Various schemes are used to encourage owners to take more of those days in the shoulder season instead of the absolute peak income generating times in December and January and Chinese New Year when the rental rates are at their highest,100% occupancy is assured and the income to be generated and shared with the owner is greatest.
Some schemes operate on individual property returns (such as The Sheraton) whereas most work with a rental pool where all owners in the pool get a revenue split even if their property is not rented. There are pros and cons for both. Income is typically paid annually or every six months, with the exception of The Sheraton who pay monthly ( The Sheraton leads in many aspects of providing the best value for owners)
When it comes to splitting the income between the hotel brand and the property owner, many schemes offer a guaranteed percentage return for the owner where 3-8% p.a. for 3-5 years is the most common.
Beyond the guarantee period, the gross income split is often 60% to the property owner and 40% kept by the hotel brand, but take note that the owner still has costs to pay out of the 60%.
These include contributing to a fund for the owners property to cover eventual refurbishment and replacement of furniture and fittings over time and other items of maintenance and house keeping when the unit is unoccupied. Bear in mind these costs are to keep the owners property in the best possible condition at all times, so its money that the owner would be paying anyway to keep any property in tip top condition.
All the projects we represent have sale galleries and show homes, so schedule an inspection with us at any convenient time.
Click on the link below to all current branded projects.