The investment case for SEA property

Rental yields — what to expect

Gross rental yields in Thailand and the Philippines typically range from 6–8% per annum in well-located developments, compared to 2–4% in most Western European and Australian markets. Net yields after management fees, taxes and voids will be lower — typically 4–6% depending on the property and management approach.

Yields vary significantly by location, unit type and whether you pursue short-term or long-term rental. Studio and one-bedroom units generally produce the strongest yields as a percentage of purchase price. Larger units command higher absolute rents but often yield less proportionally.

Short-term vs long-term rental

Short-term rental (Airbnb, Booking.com and similar platforms) typically generates higher gross income in tourism-heavy locations like Phuket, Boracay and Cebu. Peak season rates can be significantly above long-term equivalents, and you retain flexibility to use the property yourself. The trade-off is higher management complexity, more frequent turnover costs and variable occupancy.

Long-term rental provides more predictable income and lower management overhead. In urban markets like BGC Manila, demand from expat professionals and corporate tenants creates stable, year-round occupancy. Long-term tenancies typically run 6–12 months and are easier to manage remotely.

Many investors opt for a hybrid approach — long-term tenants during low season, short-term during peak periods. Your property manager can advise on the optimal strategy for the specific location.

Capital growth

Property values in key SEA markets have grown consistently over the past decade, driven by urbanisation, infrastructure investment and rising domestic demand. Off-plan purchases in well-chosen locations have historically delivered capital appreciation between reservation and completion — though this is not guaranteed and past performance does not predict future returns.

The strongest capital growth tends to occur in:

• Urban centres with infrastructure investment — new metro lines, business districts, airports
• Established resort destinations with constrained supply — Phuket, Boracay
• Emerging areas with improving connectivity — Cebu, secondary Philippine cities

The off-plan advantage

Buying off-plan — before or during construction — typically allows you to purchase at a lower price than the completed market value, with a staged payment schedule that spreads your capital outlay over the construction period. If the market moves in your favour during construction, you may have built-in equity before you even take ownership.

The risks of off-plan purchasing include construction delays, developer insolvency and the possibility that the completed product differs from expectations. Mitigate these by choosing established developers with a track record of delivery, and by reviewing the Sale and Purchase Agreement carefully with a lawyer.

Managing your property remotely

The majority of foreign buyers in SEA manage their properties remotely. This is entirely feasible with the right setup:

• Property management companies — most developments have recommended or on-site management partners who handle tenant finding, check-ins, maintenance and rental income collection. Fees typically range from 10–20% of rental income.
• Developer rental programmes — some developers offer guaranteed rental return schemes for a fixed period post-completion. These can provide income certainty during the early years of ownership. Review the terms carefully — guaranteed returns are only as strong as the guarantor.
• Short-term rental platforms — platforms like Airbnb allow remote management with local co-hosting. Co-hosts typically charge 15–25% of rental income and handle all guest interaction and cleaning.

Tax on rental income

Rental income from Thai and Philippine properties is subject to local income tax. As a non-resident landlord you may also have reporting obligations in your home country depending on your tax residency and any applicable double taxation treaties.

Tax rules vary significantly by country and individual circumstance. Always take advice from a qualified tax professional in both the country where the property is located and your home country before purchasing.

Repatriating your profits

In Thailand, sale proceeds from a foreign freehold condominium can be repatriated in foreign currency provided the original purchase funds were brought in from abroad in foreign currency and the FET form was retained. The amount repatriated cannot exceed the original inward remittance.

In the Philippines, repatriation of capital and profits is permitted for foreign investors who remitted funds through a BSP-authorised bank and hold a valid Bangko Sentral Registration Document (BSRD). Keep your BSRD — without it, repatriation becomes significantly more complex.