Real estate is filled with “jargon”, “slang” and acronyms that sometimes can leave investors and buyers scratching their heads and wondering if they were deciphering a code. So why not make it a little bit easier?
We have created this guide to help you understand the most important real estate terminologies so that you can save time and spend it on what really matters!
Real Estate Terms and Definitions
Freehold and Leasehold Property:
- Freehold is the ownership of the land and the building, simply put the title is absolute and remains yours generationally.
- A leasehold means that you have a contract in place with the freeholder to lease the property or a certain area of it for a specified amount of time.
There are several advantages to both of these depending on what you are looking for with your investment, to find out more get in touch with our team.
Investment Property and Residence Property:
- An investment property is a property that’s; not your primary residence, and is purchased or used to generate income, profit from appreciation, or take advantage of certain tax benefits. Fundamentally, if you purchase real estate that you’ll use to make a profit, rather than as a private residency for you and your family, that property is regarded as an investment property.
- Residential property is a condo/villa/house that you intend to occupy for part of the year in addition to your primary residence. Typically, a second home is used as a vacation home, though it could also be a property that you regularly visit, such as a condo in a city where you frequently conduct business.
Condominium and Villa:
- Villas are usually home to a single-family, as opposed to condos that were designed to house many families. Villas also are mostly found in quieter areas where there are fewer people and noise. They are more commonly associated with homes located in luxury communities or vacation properties.
- A Condo is one unit in a larger building, usually equipped with a shared common area, hallways, parking lots, gyms, and pools. Ownership of a Condo usually requires less insurance and duties, and maintenance is taken care of by the condominium association or the Hotel management group.
Off-plan property and Ready to move in Property;
- Off-plan property purchases are when a buyer buys a property before it has been completed or built. This is one of the cheapest ways to get your ownership and to guarantee a higher return on investment. Off-plan property investments tend to perform well in terms of attracting rental demand. Since new-build off-plan properties are completely modern, they also tend to not need any maintenance or repairs before tenancy.
- Ready to move properties are in general very appealing as we as humans prefer to buy something that is already finished. Buying ready to move in means that the investors don’t need to wait, they can sign the documents, make the payment, and rent or move in when they are ready.
Condominium facilities/ Complex Facilities/Common Area:
- The common area/condo facilities/complex facilities fall under two main categories. Floor common area, meaning areas on a specific floor, and building common areas, which refers to locations throughout the entirety of the building. This includes amenities such as laundry facilities, pools, and garden areas, as well as exterior walls, parking lots, and even public toilets.
Condominium License/ Construction Permit/ Environmental Impact Assessment (EIA)
- Licensed condominiums have multiple owners who each have individual ownership of the units and proportional joint ownership of the common areas.
- Construction permits are a type of authorization that must be granted by a government or other regulatory body before the construction of a new or existing building can legally occur.
- An environmental assessment of the impact that the new building will have. Taking into consideration the socio-economic, cultural, and human health impacts.
Real Estate Investment Terminology
Showroom/ Built-In Furniture/ Furniture Package:
- A showroom is a pre-built representation of a planned project. Often these are built well ahead of the rest of the development to help buyers and investors see what the actual finished product will look like.
- Built-In Furniture applies to items that are part of the main building structure, some of these include stoves, wardrobes, appliances, etc.
- A Furniture package is essentially a pre-ordered furniture package containing everything that a resident would need to live comfortably with. These are usually offered by the developers as an extra package and are usually cheaper than as they get discounts.
Payment Schedule (Reservation deposit, Down Payment):
- A payment schedule is an agreed-upon payment period of time for payments to be made, usually between the buyer and the seller. For early or pre-development properties there is typically a requirement for a reservation deposit. Down payments are ways to secure your property.
Closing Costs (Common Area Fee/ Maintenance Fee, Sinking Fund, Duty Stamp, Registration Fee):
- Closing costs are expenses you need to pay when you close on your property. Closing costs may include; Common Area Fee/ Maintenance Fee, Sinking Fund, Duty Stamp, and Registration Fee.
Inspection/Registration (Blue book/ house book/ chanote):
- A Chanote is issued by the Thailand Land Department, this is the Kingdom’s land ownership title deed. Often referred to as a Bluebook or house book, these carry the land title deeds and secure ownership for whoever owns that title book.
Investment Return (Guaranteed Rental Returns/ Capital Gains):
- Investment returns (also referred to as ROI – return on investment) refer to the profits a property makes as a result of appreciation or rental gains.
- Capital gain is the increase in a property’s value.
Whether you’re an investor, buyer, or seller, it’s essential to stay up to date on current real estate trends and market changes. To get our expert advice, get in touch with us here, we would love to help you!