"I have been looking for a Phuket property that would give me both, a great holiday home and a great investment return. Having looked at many of the property developments in Phuket, I was satisfied that the way the rental system was going to be run at Kata Rocks was ideal for a good rental return." William Westhead, Purchaser of a Pool Condo at Kata Rocks.

Investment

A property purchase in Phuket (or other holiday destinations) is rarely, purely an investment purchase. It is also a lifestyle purchase, as the owner wants the lifestyle that goes with owning a property in a luxury oceanfront development. However, most purchasers want to know that while they are enjoying yet another Thai massage or enjoying their Pina Colada whilst looking at the sunset, their money is also working for them.

Location, location, location

As most people know, the first 3 rules of property are: location, location, location. The Kata Rocks location is truly world class and is regarded by most as the best available Phuket property development site. Phuket has been voted the best island in the world by Conde Naste traveller magazine and is the holiday island right at the heart of the Asian region, which virtually everyone agrees is the region of the world most likely to show the highest growth over the coming years. Because of the friendly Thai people and their culture, Thailand will always be a favourite choice for tourism. Phuket is their leading tourism destination having its own international airport giving it easy access to the increasingly wealthy people working in the Asian region. Phuket is also trending up market with the rich and famous increasingly being attracted to the island.

Within Phuket, the best beaches can be found on the west coast and the generally regarded best two beaches are Kata Beach and Kata Noi Beach. The Kata Rocks location is right between both of these beaches on the headland and facing west for the perfect sunset view. Many Phuket property sites that have a west facing view, tend to have a road between them and the sea, which diminishes the experience. This is not the case with Kata Rocks, which is absolutely on the seafront. Kata Rocks is further enhanced by having a stunning rock platform in front of it (The Rocks). This, along with the gentle slope of the site, which allows every unit to have the perfect, uninterrupted sea view, makes Kata Rocks such a perfect location.

Phuket property purchasers are generally interested in the potential for both capital appreciation and rental income. However, many purchasers in holiday destinations just want the rental yield to cover their running costs so that they can enjoy the lifestyle for free and get the capital growth when they sell many years later.

Capital Appreciation

The Phuket property market over the last few years has seen around 15% capital appreciation per year but it is still very undervalued in world terms. It is priced at a fraction of similar properties in the holiday islands of the Caribbean or Mediterranean and as Asia is likely to grow faster this gap is expected to close in the coming years meaning that Phuket property prices are likely to rise faster than in other parts of the world. Another factor worth considering is that the availability of foreigner mortgages on Thailand real estate will probably increase over time as the rules are likely to be relaxed a little. Mortgage borrowing opens a market to more purchasers, which sends prices higher. Currently, there are hardly any mortgages on properties owned by foreigners in Phuket, which means that the credit crunch has had limited effect (you can't be squeezed out of a property that you own 100%). For foreigners purchasing Phuket property, it is also worth considering the currency. As Asia grows and the USA, UK and European governments, and therefore taxpayers, take on the huge bail out debts, then those currencies are likely to fall relative the Asian currencies. Asian individuals and countries have little debt and high growth, which is the opposite of most western countries. Many of these western currencies have been falling against the Thai Baht for years and this trend is likely to continue. By investing in a Thai Baht property, the capital appreciation is likely to be higher as you get the benefit of the currency growth as well as the property growth.

Rental Yields

Many Phuket property developers along with other developers around the world quote a variety of predicted rental yields but generally in Phuket, a rental yield of around 6% is realistically achievable. Some developments will guarantee their rental yields for a set period but they have often incorporated the guarantee in their purchase prices. The other drawback with guaranteed rental returns is that the purchaser has to be tied into a strict rental program, which can affect the lifestyle reason for your purchase, and the rigidity of the rental program can have a detrimental affect on the capital appreciation of the development as well, as some second hand purchasers do not want the restrictions. Purchasers should look at the type of deal being offered in terms of the rental system to make sure that it not only offers a good rental return but also offers the flexibility to allow you to enjoy your Phuket property.

At Kata Rocks, the Rental Management system is not rigid; it offers total flexibility to the owners. We have looked very closely at the best way to operate the Rental Management system for the benefit of the owners to satisfy both the lifestyle element of their purchase and the investment element. The main reason that we have looked even more closely than most is that the developer, Richard Pope along with a couple of his friends are going to be owners and they want to enjoy the lifestyle, make a reasonable rental return and definitely not put anything in place that could jeopardize the long term capital growth. Far from it, we expect that the Rental Management system, Service levels, Design and outstanding Location are going to make the Sky Villas at Kata Rocks highly sought after in the years ahead.