Investing in Phuket property: the numbers behind the brochure

Phuket property earns money two ways, and they attract different owners.

Long-term rental (6–12 month tenants: remote workers, families at international schools, seasonal residents) typically produces 4–6% gross on realistically priced condos and villas, with low management overhead and little seasonality risk. The long-stay market has deepened markedly since 2021 and is strongest in the Cherng Talay–Bang Tao corridor and around school catchments.

Holiday rental produces headline gross yields of 6–10% on well-run units — but that is before the costs that long-term letting doesn't have: management commissions of 20–35% of revenue, OTA fees, utilities, linen and wear. High season (November–April) can deliver 80–90% occupancy on good stock; green season often runs below 50%. Net, a well-chosen holiday unit usually lands at 4–7% — better than long-term, in exchange for volatility and more moving parts.

Treat any "guaranteed 7–10% return" marketing with care: guarantees are paid from your own purchase price more often than buyers realise, and they expire.

• CAM fees: ฿50–90/m²/month on Phuket condos — on a 45 m² unit, roughly ฿27,000–48,000 a year before it earns a baht.
• Sinking fund: a one-off ฿500–800/m² on new buildings.
• Management: 20–35% of holiday revenue, or typically one month's rent per year for long-term tenancy management.
• Rental income tax: rental income arising in Thailand is taxable in Thailand — non-residents face withholding (15% on gross paid to overseas landlords) or progressive rates via a Thai filing, with expenses deductible. UK and Australian tax residents must also declare it at home, with double-tax-agreement credits usually preventing double payment. Get a cross-border accountant; it's cheaper than the alternative.
• Land and building tax: modest for residential use, but budget for it on rentals.
• Exit costs: 2–3% transfer taxes on sale (more if sold within 5 years, when Specific Business Tax at 3.3% applies), plus agent commissions of 3–5%.

Phuket is a supply-constrained island with demand pulled from many countries at once — that diversity is its real defensive quality. Growth has historically concentrated where three things intersect: west-coast beach proximity, professional management, and Foreign Freehold availability. Land prices along the Bang Tao–Layan corridor have compounded strongly for two decades, and branded residences resell at persistent premiums.

Against that: Phuket builds fast. Condo supply arrives in waves, and secondary resale competes with developers' new stock (with showrooms and payment plans you can't match). Realistic underwriting assumes rental income is the return and treats capital growth above inflation as upside, not a plan.

Leasehold units price 10–20% below identical Foreign Freehold stock, which mechanically lifts yield — but the asset amortises toward the end of its registered 30-year term. The investor's frame: a leasehold condo is closer to a long annuity (income now, limited terminal value) while Foreign Freehold is a bond plus option (lower yield, preserved capital, easier exit). Both are rational; mixing up which one you bought is not. Our leasehold vs freehold guide covers the legal detail.

Short-term rental of a private condo (under 30 days) technically requires a hotel licence or falls under exemption rules for small operations; enforcement is periodic and building-by-building — many juristic persons ban sub-30-day lets outright, while purpose-built "condotel" projects are licensed for it. If your model is Airbnb-style letting, buy in a building designed and licensed for it, not one where you'll fight the co-owners' committee. Long-term letting (30+ days) is straightforward and legal everywhere.

Before you enquire on anything, run this five-line model:

1. Realistic annual rent (ask for the building's actual occupancy and ADR history, not projections).
2. Minus management, CAM, utilities, tax — assume 30–40% of gross for holiday lets, 15–20% for long-term.
3. Divide by all-in purchase cost including transfer taxes and furniture packs.
4. Stress it: green season at 40% occupancy, one repricing of THB against your home currency.
5. Compare against the leasehold/freehold alternative for the same money.

If it still clears 5% net with honest inputs, it's a real investment and not a lifestyle purchase wearing a spreadsheet. Both are fine — just know which one you're making. None of this is financial advice; verify numbers on the specific unit with independent professionals.