Top 10 property investment risks in Thailand and how to avoid them: expert guid

Thailand remains a top destination for foreign property buyers in 2025. Rental yields of 5–12%, annual price growth of up to 15%, and accessible entry from $100,000 make it attractive. Phuket alone saw 4 million tourists in the first quarter, driving strong rental demand.

Yet despite strong fundamentals, success is far from guaranteed. Around 80% of first-time foreign investors take a loss on their investment — most often because they overlook critical details: location-specific dynamics, hidden costs, and legal restrictions.

This guide breaks down the most common risks and explains how to avoid costly mistakes — with a focus on practical decisions and real market conditions.

5 reasons why Thailand attracts foreign property buyers

Buying property in Thailand has become increasingly attractive in 2025. The country offers great investment opportunities, a high standard of living, and clear rules for international buyers. On top of that, its property market is growing fast.

1. High rental demand driven by tourism. Thailand is a world-famous tourist destination, especially areas like Phuket. In the first three months of 2025, nearly 4 million tourists visited Phuket alone, with 17,000 to 18,000 international arrivals each day. 

Well-located properties are easy to rent out short- or long-term. Many owners earn rental returns of 5–12% per year in strong currencies like the US dollar.

2. Growing property prices. The Thai real estate market is seeing consistent price increases. In popular areas like Bang Tao and Nai Harn in Phuket, property prices are rising by up to 15% per year during the construction stage and by up to 8% after the project is completed. 

Waterfront properties and projects with good infrastructure are especially popular. As land becomes more limited, prices are expected to keep going up. 

3. Affordable entry and flexible payments. You don’t need a huge amount of money to start investing. New studio apartments start from $100,000. Many developers offer interest-free instalment plans with flexible terms. 

4. Modern homes with resort-style facilities. New residential complexes in Thailand offer more than just a place to live. They often include swimming pools, gyms, restaurants, children’s clubs, wellness centres, shopping areas, and even water parks.

Many of these properties are managed by international companies, providing reliable service and making it easy for owners to earn passive income.

5. Easy visa rules and property ownership. Thailand offers visa-free entry for citizens of 93 countries. Visitors can stay for long periods with ease.

Foreigners can legally buy property in Thailand, either as freehold or leasehold. Buyers can pay in dollars, euros, Thai baht, or other currencies, depending on the developer's policy. The government is working on making the buying process even simpler.

10 key risks of buying property in Thailand

The rewards of buying property in Thailand can be significant, but the process is not without its challenges. Alongside attractive price points and rental potential, buyers must be aware of the risks that can undermine their investment.

Some issues may lead to financial loss, while others can reduce rental income or create long-term management problems. In a fast-evolving Thai property market, it’s not enough to rely on sales pitches. Informed investors take the time to understand the risks and apply a thorough due diligence process before committing to any transaction.

Risk #1. Choosing an unreliable developer

A client once bought two units remotely and later turned to Neginski for help with the handover. Instead of the promised high-quality finishes, the developer delivered apartments with rusted fixtures, mould, and uneven walls. It turned out to be the first project by an unknown developer.

This case highlights that choosing an unreliable or inexperienced developer is one of the most serious risks when buying property in Thailand. A limited track record, vague documentation, or lack of transparency can also result in construction delays, unfinished projects, or legal disputes — all of which may lead to direct financial loss.

Common warning signs include refusal to provide official permits, unclear statements about the project's legal status, and non-compliance with Thai building regulations. 

Unlike some other countries, Thailand does not use escrow accounts for property transactions. While certain developers link payment schedules to construction progress, this practice is not universal. In most cases, buyers pay in instalments, but legal ownership is transferred only after full payment and formal registration with the Land Department.

The purchase agreement is a primary layer of protection. It must clearly specify payment terms, transfer conditions, and the developer’s obligations. For example, if the handover is delayed by more than one year, financial penalties typically apply — but only if specified in the contract.

Here are several projects that have successfully passed our due diligence process and meet key safety and reliability criteria for investment.

Risk #2. Poor location and low liquidity

The location of a property in Thailand has a direct impact on its investment performance. Even a stylish, well-built unit may struggle to rent or sell if it is far from important amenities like beaches, shops, restaurants, or transport.

In Phuket, apartments usually start at $100,000 and villas at $400,000. Still, the market includes many “hot” deals at lower prices. These can seem attractive at first, but often come with downsides — such as being located far inland, in older areas with little infrastructure or tourist appeal. As a result, these properties may stay empty longer, be harder to resell, and bring in lower returns.

On the other hand, homes in popular areas of Phuket like Bang Tao, Rawai or Nai Harn tend to perform much better. They attract more interest from both renters and buyers, offer stronger rental income, and often grow in value by up to 5–15% per year.

Risk #3. Incorrect choice of property format

Choosing the wrong property format for your investment goals is a common and costly mistake in the Thai real estate market. It’s not just about size or price — it’s about how well the property fits the intended rental or resale strategy. 

For short-term rentals in tourist areas, fully furnished condos are in high demand, especially compact or two-bedroom units, which appeal to couples and families on short visits. Villas can also perform well — particularly when targeting groups, families or companies looking for holiday stays.

For long-term lets, location and amenities become more important than property type. Expat families typically prefer quiet neighbourhoods near schools and green spaces, while digital nomads often look for pet-friendly policies, coworking zones, and modern interiors. 

A studio in a family suburb or a luxury villa in a party district may struggle to attract consistent tenants if misaligned with local demand.

If the goal is to resell, factors like distance to the beach, access to infrastructure, and project uniqueness have a major influence on future value. A standard condo far from the coast, even if well built, is harder to exit than a beachfront unit in a high-demand area.

Risk #4. Overestimating developer promises

Many investors are drawn to bold marketing claims — 20% annual rental yields or 100% capital growth — but such figures often reflect best-case scenarios, not realistic outcomes. 

In practice, a property’s performance depends on several factors: 

• Location

• Timing

• Purchase price

• Quality of management

When developers promote unusually high returns or rapid price appreciation, these promises frequently fall short. Lower occupancy rates, hidden costs, or vague contract terms can quickly reduce actual yields. Relying solely on promotional claims often results in disappointment — or direct financial loss.

How we eliminate this risk at Neginski. We independently validate every developer claim. Our analysts study local market trends, examine comparable properties, and assess whether rental projections are achievable. We also insist on full contractual clarity and advise only on projects with proven demand. 

This approach protects our clients from inflated expectations and ensures their investment decisions are grounded in market reality.

Risk #5. Underestimating entry costs and payment schedules

Thailand’s low entry prices and 0% instalment plans attract many foreign investors. Most plans require 20–35% upfront, with the rest paid during construction. Some even allow up to 50% to be paid after completion, at interest rates of 3–7%.

While flexible, these plans demand careful budgeting: missed payments can lead to penalties or contract cancellation.

To avoid such situations, work with a qualified advisor who can match your strategy to your budget. And always account for hidden costs — maintenance, taxes, legal fees, and furnishing — often excluded from advertised prices.

Risk #6. Investing without local expertise

Buying property in Thailand without on-the-ground support introduces a high level of risk. Foreign investors often lack familiarity with Thai property laws, ownership structures, and regional processes. This can lead to errors such as incomplete documentation, misjudged legal standing, or contracts that cannot be enforced.

Without trusted local advisors, buyers may unknowingly invest in projects that lack proper permits, face community resistance, or have hidden liabilities. Developers are not always forthcoming about risks, and many foreign buyers don’t know what to ask — or what to verify.

How we eliminate this risk at Neginski. We see local expertise as non-negotiable. Our regional analysts live where they work, understand the nuances of Thai law, and maintain direct relationships with verified developers. 

Only 30% of available market offers pass our internal screening. This is how we filter out high-risk projects — offering our clients a level of due diligence no remote investor can replicate on their own.

Risk #7. Falling for scams or fraudulent offers

Thailand’s dynamic property market has attracted not only investors but also fraudsters. Scams range from fake listings and bogus investment schemes to impersonation of legitimate estate agencies. These schemes are often sophisticated, using real branding, high-pressure tactics, and promises of unusually high returns to deceive buyers.

A common tactic involves someone posing as an agent from a known firm, contacting prospects via messaging apps and urging them to act quickly. Victims are often persuaded to transfer money for a “trading deposit” or secure a “special deal” that never exists. Once funds are transferred, the fraudster vanishes, and recovery becomes difficult.

The Thai legal system provides protections, but only for transactions conducted through official, documented channels. Refusal to share contracts, ID, or verified credentials is a red flag that should not be ignored.

Risk #8. Missing out on profitable opportunities due to delays

Thailand’s real estate market moves fast — especially in high-demand areas. Desirable units, early pricing, and pre-launch deals are often snapped up within days. Investors who hesitate may find themselves facing significantly higher prices, limited inventory, or missed chances for high returns.

Waiting too long can mean settling for less attractive units, or missing out entirely on projects that quickly become fully subscribed. While caution is important, excessive delays often result in lost opportunities and reduced profitability.

How we eliminate this risk at Neginski. We track project launches and market activity in real time. This allows us to present our clients with early-stage opportunities — often before they appear on public listings. 

We help clients act decisively when all key criteria are met, combining thorough checks with market agility. The best returns are often secured not just through what you buy, but when you buy it.

Risk #9. Rejecting good offers out of fear

Thailand’s booming property market is full of tempting opportunities — low entry prices, high promised returns, and limited-time deals. While some of these offers are too good to be true, others are genuine early-bird discounts available during presale stages. The challenge lies in distinguishing between the two.

Presale phases can offer real savings of up to 30%, but these deals are time-sensitive and often close quickly. Overly cautious investors who automatically dismiss such offers may miss out on substantial profits. Yet, acting without verification can lead to investing in underperforming or risky projects.

The key is striking a balance between healthy scepticism and informed decisiveness.

Risk #10. Weak property management

Even a well-located, high-quality property can underperform if management is weak or absent — a risk that’s especially relevant for foreign investors. Poor maintenance, missed bookings, and lack of guest support often translate into negative reviews, reduced occupancy, and inconsistent returns.

Many buyers focus on the developer and location but overlook a critical question: who will manage the property after purchase? Overseas ownership requires a dependable team to handle daily operations — from cleaning and repairs to guest communication and platform coordination. Without that support, even strong assets may stay vacant or lose market appeal.

How we eliminate this risk at Neginski. Our team evaluates the property management setup with the same rigour as we do location and legal structure. We prioritise projects with in-house management or partnerships with proven operators — often international hospitality brands or seasoned local firms. This ensures high service quality, efficient operations, and the peace of mind our clients need when investing remotely.

Checklist for safe property buying in Thailand

Use this expert-backed checklist to minimise risks and make smart decisions. It covers key legal, financial, and practical steps every foreign buyer should take before committing to a property in Thailand.

Summary: avoiding mistakes when buying Thai property

Investing in property in Thailand offers unique lifestyle and profit opportunities — but it requires careful analysis and a strategic approach. As the market becomes more dynamic and attractive to foreign buyers, so do the risks — from unreliable developers and poor locations to legal, financial, and cultural pitfalls. Real-world cases show that success often hinges on preparation, timing, and expert guidance.

Smart investors prioritise location, verify details with local analysts, and choose vetted projects with clear payment terms and strong management. Understanding ownership formats, rental models, and actual costs helps avoid common traps and boost returns.

With the right strategy, Thailand remains one of the most promising real estate destinations in South-East Asia for 2025 and beyond. Make informed decisions, act on real opportunities, and let your investment work for you — not against you.