Let’s consider a case study of the return on investment (ROI) from purchasing an apartment in Phuket, based on actual data from our property management company, Phuket Experts Hospitality.
Capital Appreciation
Most investors buy apartments during the construction phase (off-plan), where interest-free installment plans are available with an initial payment of 25–50%. Value appreciation by the time of completion typically reaches 30–40%, with average annual rental yields between 8–10%.
Let’s examine a project involving an existing two-bedroom apartment with a total area of 61.25 square meters:
- Purchase Price (Off-plan): 6,702,918 THB
- Capital Appreciation (30% upon completion): 2,614,138 THB
- Final Market Value (Completed): 8,713,793 THB
Rental Income and Operating Expenses
The key driver of profitability in this project is the rental management program.
- Occupancy Rate (2022): 77% (rented for 277 days or ~40 weeks of the year)
- Gross Annual Revenue (2022): 1,890,000 THB
Breakdown of Rental Expenses
For an objective return calculation, we assess net yield by subtracting operational and maintenance expenses:
- Check-in / Check-out Expenses: 66,500 THB / year (includes welcome packs and deep cleaning after guest departures).
- Ongoing Property Expenses: 215,000 THB / year (air conditioning servicing, pest control, replacement of towels and linens, Wi-Fi, and routine stay cleaning).
Total Operational Expenses: 281,500 THB
Revenue After Direct Expenses: 1,608,500 THB
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Deductions & Management Fees
From the remaining revenue, the following fees and taxes are deducted:
- Management Company Commission (20%): 321,700 THB
- Personal Income Tax (15%): 193,020 THB
- Annual Common Area Maintenance Fee (CAM Fee): 44,100 THB (calculated at 60 THB/sqm/month paid annually).
Final Net Profit & Yield Analysis
Final Net Annual Profit: 1,049,680 THB
This net profit represents a 12.0% annual net yield relative to the completed market value of the apartment (8,713,793 THB).
As demonstrated in this case study, investing in Phuket apartments can yield high returns of up to 12.0% net per year.
Important Takeaway: When calculating potential ROI, it is essential to account for all operational expenses, taxes, and management commissions. Applying this exact return rate to every apartment in Phuket would be inaccurate, as yields depend heavily on location, project management, and unit layout. We recommend consulting with our real estate experts to select the projects that best match your financial expectations.
