Phuket: The case of Uncle Toi Sembe, a renowned cartoon voice actor, has drawn attention after he reportedly lost nearly all his life savings by investing in a well-known real estate project in the Nai Harn Beach area of Rawai Subdistrict, Mueang District, Phuket Province. Sembe claims he neither received the promised return on investment nor the principal amount as initially agreed upon.
According to Thai News Agency, Coach Noom-Chakrapong Maesapan is raising awareness about a specific investment model known as the Investment Property Program (IP). Unlike the traditional method of purchasing real estate to rent out, this program involves the developer offering a unit with a comprehensive investment management package. The program is marketed with three attractive features: a guaranteed return typically ranging from 5-10% of the purchase price for the first 3-5 years, rental pool management that combines multiple units for tenant acquisition and profit sharing, and a buy-back condition promising to repurchase the property upon maturity.
The young coach warns of the hidden risks associated with these seemingly secure "ready-made investments." Key concerns include inflated pricing, where projects may set their selling prices above market rates, using the difference to pay out initial guaranteed returns, effectively giving investors back their own money. Additionally, a lack of genuine demand poses a threat; if a project lacks actual tenants, investors may find themselves without income once the guarantee period expires, forcing them to shoulder expenses. The reliability of the buy-back contract is another risk, as it depends on the company's future financial health, with no certainty that funds will be available to fulfill the agreement.
To promote sustainable and secure real estate investment, the young coach suggests four strategies. First, verify the source of the return on investment by comparing prices with the surrounding market and conducting on-site surveys of rental and occupancy rates. If neighboring properties have vacancies exceeding 20%, it could be a red flag. Second, calculate the net return after deducting common area and maintenance fees to determine the actual income. If the return is merely 3%, alternative investments such as bonds or debentures might be more appealing due to their liquidity.
Third, check the developer's credibility and the contract's terms by researching their background and financial standing through the Department of Business Development or the Stock Exchange of Thailand. Carefully review the contract, especially clauses related to termination and penalties for breach of contract. Lastly, develop an exit plan to ensure the property can independently generate income and verify the ease of reselling it with local real estate agents.
Real estate investments require significant capital and detailed scrutiny. Coach Noom emphasizes that "nothing comes easy without doing your homework," highlighting the importance of diversification, particularly for retirement funds or final savings. Investing all assets in a single venture can be risky, as real estate's low liquidity may transform assets lacking market demand into burdens rather than benefits.