It is amazing how frequently investors from all horizons and calibers are basing their investment decision on a very emotional aspect. It is true that Thailand, specially the island of Phuket, offers exceptional sceneries, pristine pristine beaches, fantastic climate, and great hospitality. Not to mention the kindness and friendliness from the Thai people. On the other hand, it is also true that many times Land & Hotel Properties are drastically overestimated when compared to value they are purchased few years back. But outrageous deals are now being made maneuvering to disastrous investments that can take more than 20, 30, 50, 100, or maybe more years to get a return on your investment! Listed below are three basic steps to avoid such financial disasters when considering purchasing your accommodation Industry in Phuket.

Benchmark your project potential Revenue in a realistic manner and also on a conservative side. Understand that economic cycles repeat themselves every decade, so sampling a period of time having experienced Peak, High, Low and very Low Demands will serve being a good base to determine a good business trend. Learning any project competition Average Room Rate, Occupancy, Extra Revenue and value will direct you to some good Profit estimate. Working out those figures over Ten years, without taking into account Rates or Occupancy increments, will cover returning on investment including loan interests and loan Pay off, and, will provide you with a pretty good overall results assessment.

Consider every cost that may occur when choosing your project. Including hotel construction cost for a new property with an empty land, which often is definitely an average spending per room built that include all the hotel investment opportunity facilities and technical requirements. Remember that the higher any project standard is, the greater the cost per room is going to be. Or, in case your project is already built, evaluate if you need to operate the hotel since it is or renovate it. Renovation should always be the preferred option. Here also, you need to workout a typical cost per room built. You have already neglect the cost.

Deduct this investment cost, if any, to your Potential Profit (more than a 10 years period) and also the results of this straightforward deduction provides you with a concept of the financial price of the Land or Property you want to buy. You may be shocked by the among the so-called “market” price and your figure, but this will definitely function as the correct amount with no other consideration should get a new figure you’ve got just calculated.

You now you will need to provide a “down-to-earth” Bid to your investment, and when again, don’t get emotionally involved nor overly enthusiastic by potential astonishing revenue opportunities… Economic cycles contain everywhere period, so you are looking at the average. Plus you just did the math bearing in mind all negative and positive aspects, so there is not any need to purchase higher! The simplest way to handle such investment would be to consider two, three or more alternatives of the nature and to cope with them one-by-one unless you have the transaction you are looking for.
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