Risks to Consider When Buying Property in Koh Samui

Property in Koh Samui can deliver strong returns, particularly for early off-plan investors. In our experience, capital gains of 10–20% are possible when projects are delivered on time and priced competitively. But unlike more mature resort markets, the risks here are substantial. From legal uncertainty to developer reliability, buyers must tread carefully. This page outlines five of the most common risks, drawn from real market issues we've seen on the island.

1. Immature Market

Koh Samui is still a relatively immature market compared to more established resort destinations, notably Phuket. There is a high proportion of newer or underfunded developers, which means buyers need to be especially cautious, particularly when purchasing off-plan. In many cases, developers rely on incoming sales to fund construction. If the project sells quickly, this model can work. But if sales are slow, construction delays are common, and in some cases, the project may never complete. The risk is even greater in larger developments, where many more sales are required to fund full build-out.

2. Regulatory Non-Compliance

Some developers do not build according to the submitted permit, or fail to comply with Koh Samui’s building regulations, which govern what can be constructed at different altitudes, distances from the beach, and on sloped land. Very careful due diligence is essential, and buyers are advised to have a basic understanding of the regulations themselves, not to rely entirely on their lawyer.

3. Buying a Property That Doesn’t Match Your Investment Goals

Buyers should be clear about their investment goals from the outset. If rental yield is the priority, the most suitable property may not align with their personal tastes. A successful rental property is one that appeals to the holiday market and or the long-term rental market, not necessarily the buyer, and may require compromises on style or layout. Super-luxury villas, for example, often come with high running costs and may deliver lower percentage returns despite high nightly rates. It’s also essential to factor in community fees, maintenance costs, and estate charges. Some developments on Koh Samui impose high compulsory fees, which can significantly reduce net returns and make future resale more difficult.

If the goal is capital appreciation, such as flipping an off-plan unit, then timing and selection are critical. Investors need to buy in early enough to benefit from a genuine off-plan discount, and the property must be in the right location and meet market expectations. Contemporary villas with sea views in the northeast, in areas like Bo Phut, Choeng Mon, or Plai Laem, often offer the strongest resale potential. If the unit is well priced, delivered on time to a high standard, and part of a project by a proven developer, this strategy can work well.

4. Ownership Structure Risks

Except in the case of freehold condominiums, and there are not many to choose from on Koh Samui, foreign buyers typically choose between leasehold or freehold via a Thai company. Both options carry legal risks. Many leasehold properties are marketed as renewable, but under Thai law, lease renewals are difficult to enforce. This makes renewal promises unreliable unless the project is delivered by a branded company or a highly reputable developer. In either case, the security comes from the company wanting to protect its long-term interests.

For freehold villas held via a company, the most common structure for standalone properties on Koh Samui, there are two major risks. First, many existing companies offered for takeover were not properly structured in the past, especially before enforcement tightened. Second, some buyers are incorrectly advised to set up new companies that do not comply with Thai law. The law explicitly prohibits the use of nominee shareholders, and a company cannot be used as a passive holding entity, it must operate as a genuine profit-making business.

5. The Finished Property Does Not Match Expectations

Because Koh Samui is still an emerging property market, a large portion of the available stock is either off-plan or under construction. It is not uncommon for the finished property to fall short of the buyer’s expectations, whether in terms of materials, layout, or overall finish. To avoid disappointment, investors must carefully assess the specifications and finishes promised by the developer, and compare these with their past projects. Where possible, personal inspection of previous builds, or at least video or photographic evidence, is highly recommended. As construction progresses, the build quality and finish should be monitored closely, ideally through a trusted third party or regular inspection, to ensure the completed product aligns with what was agreed.