If you are buying a villa or condominium in Phuket partly for the rental income, you will want some idea of what it might earn. It is an important question before committing to a purchase.
We can give an informed view, but we would be wary of anyone promising an exact annual return based only on a brochure, a bedroom count or a few nearby listings. We need to consider the home itself, the guests most likely to book it and how it compares with other rentals they might choose.
Who Would Want to Stay Here?
This is usually where we start. A property does not compete with every other home of the same size in Phuket. It competes with the homes a particular guest would consider for the same trip.
For a family villa, we might look at the bedroom layout, pool, privacy, living space and how easily guests can reach the places they want to visit. For a condominium, the building’s facilities, usable space, view and access to restaurants or the beach may carry more weight.
We also look at how comfortably the property can accommodate its intended guests. When we first began managing apartments at Oceana Resort in Kamala, all of the narrow one-bedroom units came with the developer’s furniture package: oversized refrigerators, sofas and four-person dining tables. The furniture took up space the guests needed. Four of the six apartments we now manage there have since changed those larger items.
That kind of detail may not appear in a market report, but it affects how well a property presents itself and which guests it suits. It can also affect the reviews we receive, which influence future bookings and income. Sometimes improving the home is a more useful first step than debating an annual revenue figure.
Which Properties Are We Comparing It With?
Market data helps us see demand and a range of possible results. The difficult part is deciding which listings make a fair comparison.
Two one-bedroom condominiums in Bang Tao can differ in location, floor area, outlook, facilities, condition and guest capacity. An apartment where guests need transport for most outings may not attract the same demand as one within walking distance of restaurants and shops.
For a one-bedroom condominium in Bang Tao, we recently used PriceLabs Revenue Estimator Pro to prepare an estimate. It projected annual accommodation revenue of approximately ฿331,000 at the 25th percentile and ฿604,000 at the 75th percentile. That is a substantial difference within a group of apparently similar properties. Before using such a range to discuss a particular apartment, we would want to look at the comparison properties and decide where that apartment might reasonably fit.
A New Listing Needs Time to Establish Itself
An established holiday rental may have dozens of guest reviews. A newly listed property has none, and some guests will feel more comfortable booking a home that others have already reviewed.
Even when a new property is attractive and well prepared, we would generally expect it to receive fewer bookings at first than a comparable established listing. It may also need more competitive launch pricing while it earns its first reviews.
Both Airbnb and Booking.com offer optional 20% new-listing promotions to help attract early bookings. Airbnb’s offer can apply to the first three bookings. Booking.com’s New Property Deal ends after three bookings or 90 days, whichever comes first. These offers are not a requirement for every property, but they illustrate why its first bookings may earn less per night than those of an established rental.
We would not take the annual results of a long-established listing and assume a new property will achieve the same figures in its first year. We would discuss its starting period separately from what it might achieve once its listing has developed reviews and we can see how guests respond to it.
The launch date matters too. A property becoming available at the start of a busy period faces a different opportunity from one launched during quieter months. Good photography, presentation and marketing all help, but they do not remove that difference.
After launch, we monitor bookings and guest feedback, review prices regularly and update the listing when we see a way to improve it.
Look at the Months, Not Just the Year
An annual estimate can hide how uneven rental income may be. Phuket has strong seasonal changes, but they are not as simple as one high-season rate and one low-season rate.
December, January and February usually provide the strongest rates. March and April tend to become quieter, even though they are still often described as high season. July and August are usually among the busier low-season months for us, but nightly rates are generally much lower than at the start of the year.
We would also look at how the owner intends to use the property. Owner stays are entirely welcome, but dates reserved for personal use cannot also be sold to guests. An estimate should reflect the dates the home will actually be available.
Revenue Is Not the Same as What the Owner Receives
A projected annual rental figure is usually accommodation revenue—not the amount that will arrive in the owner’s account.
Booking platforms charge fees. There is a management commission, and the property will have running costs and occasional replacements or repairs. Those costs vary from home to home, so one standard deduction will not produce an accurate owner-income figure for every property.
When comparing figures, it is worth asking what each one includes. A large accommodation-revenue estimate may look impressive, but an owner needs to understand the likely costs alongside it.
No Estimate Can Account for Everything
Owners sometimes ask whether we guarantee a rental return. We don’t. Tourist demand can change with economic conditions, flight availability or political events, affecting both bookings and what guests are willing to pay. We treat an estimate as a useful starting point, not a promised outcome.
Once a property is live, its own results become more useful than the original estimate. We can see how guests respond to the home, which dates are booking and at what rates, then adjust the pricing strategy as we learn more.
Tell Us About Your Property
Most conversations with owners begin with the home itself: where it is, how they intend to use it and what they would like us to manage. If an owner wants a revenue estimate, we can prepare one after discussing the property. We would explain the assumptions behind it rather than offer a number as a guaranteed return.
If you own a villa or condominium in Phuket—or are considering buying one—get in touch. Tell us about the property, and we can discuss the guests it may appeal to, what it would need before welcoming them, and how our vacation rental management service would work for you.
