How to calculate rent increase per annum?

[banagan]

What is the average % rent increase here in Chiang Mai?

 

What would be a fair amount?

 

 

[Thailand]

Generally zero percent increase.

[daoyai]

0% ....good renters are hard to find and usually retained by not raising rent.

[simoh1490]

+1

Edited April 1, 2018 by simoh1490

[coxo]

It's all about supply and demand, it might even go down as mine did in Bkk...

[Peterw42]

Unless its specifically written into the lease, the rent cannot go up during the lease term. After that its open market.

[worgeordie]

We have not put our rents up for 10 years,happy with the returns,

and with so much competition,it's not really possible,especially

if you want a quick turnaround with new tenants,better than asking

more  then maybe wait 3-6 months to find new renters. 

regards worgeordie

[inThailand]

For a 30 yr lease price to be determined one must assess the real market sales value which is usually significantly less then the asking price. It has always been a buyers market and even more so now and for the foreseeable future. I am a a buyer by nature but even in this dim market you have to seriously consider renting instead.  

 

Remember the poster who was offering to rent the condo he wanted to sell, with no rental guarantees. Why? Because he can not sell his white elephant.

[banagan]

I'm negotiating my lease now. 3 year lease. They said 10% increase a year, every year after that.

 

Have never heard of that here, but have never rented a house long term.

 

 

[HLover]

2 minutes ago, banagan said:

I'm negotiating my lease now. 3 year lease. They said 10% increase a year, every year after that.

 

Have never heard of that here, but have never rented a house long term.

 

 

May be time to shop around for a new house.  With the current stale rental market, you could negotiate elsewhere.

[worgeordie]

1 minute ago, banagan said:

I'm negotiating my lease now. 3 year lease. They said 10% increase a year, every year after that.

 

Have never heard of that here, but have never rented a house long term.

 

 

Don't fall for it,better not to be committed to a property for

long term contract,some things can change,and you are

stuck there,leave and you lose your deposit, it should be 

10 % DECREASE every year, !,competition is that tough.

regards worgeordie

[inThailand]

1 minute ago, worgeordie said:

Don't fall for it,better not to be committed to a property for

long term contract,some things can change,and you are

stuck there,leave and you lose your deposit, it should be 

10 % DECREASE every year, !,competition is that tough.

regards worgeordie

Agreed!

 

Good renters are scarce here. By negotiating a new lease every year you have the leverage. Same rent or even a discount is more than possible. 

[banagan]

24 minutes ago, inThailand said:

Agreed!

 

Good renters are scarce here. By negotiating a new lease every year you have the leverage. Same rent or even a discount is more than possible. 

Seems to be the consensus alright.

I rent a house back home, same tenants for 6 years, haven't put the rent up once, even though the market price has gone up, a lot. I'm just happy with good hassle free tenants.

 

I could kind of understand if we were in Hong Kong, Singapore... but Chiang Mai?

 

There's an option to not put a mandatory increase into the contract.... hmmm.

 

Anyway, I sort of knew already that this wasn't the case, just wanted to get some opinions here, cheers.

 

 

 

Edited April 2, 2018 by banagan

[Lacessit]

 There's a glut of apartments and houses for rent in Chiang Mai. My condo rent has not increased for 5 years, and was reduced before that. The OP should focus on keeping good tenants, as once lost the benefit of a rent increase is swallowed up by prolonged vacancy periods.

[banagan]

5 minutes ago, Lacessit said:

 There's a glut of apartments and houses for rent in Chiang Mai. My condo rent has not increased for 5 years, and was reduced before that. The OP should focus on keeping good tenants, as once lost the benefit of a rent increase is swallowed up by prolonged vacancy periods.

 

OP here. I'm not leasing, I'm renting.

 

Thai landlord wants to work in 10% increase a year into the contract.

 

 

 

[Lacessit]

1 minute ago, banagan said:

 

OP here. I'm not leasing, I'm renting.

 

Thai landlord wants to work in 10% increase a year into the contract.

 

 

 

Tell him you're moving.

[elgenon]

24 minutes ago, banagan said:

Seems to be the consensus alright.

I rent a house back home, same tenants for 6 years, haven't put the rent up once, even though the market price has gone up, a lot. I'm just happy with good hassle free tenants.

 

I could kind of understand if we were in Hong Kong, Singapore... but Chiang Mai?

 

There's an option to not put a mandatory increase into the contract.... hmmm.

 

Anyway, I sort of knew already that this wasn't the case, just wanted to get some opinions here, cheers.

 

 

 

Do your expenses and property tax increase each year? My property taxes increase each year and workers charge more for their services each so I have a hard time not raising rents for the rental back home. If I don't my net is less each year. And then when expensive things need to be done there is less money. I like to be able to maintain the property in good fashion.

[banagan]

5 minutes ago, elgenon said:

Do your expenses and property tax increase each year? My property taxes increase each year and workers charge more for their services each so I have a hard time not raising rents for the rental back home. If I don't my net is less each year. And then when expensive things need to be done there is less money. I like to be able to maintain the property in good fashion.

Yes, but don't want the hassle of finding new tenants and the mortgage is still covered. At this point, I think a 5% increase would be fair. But am now thinking of just selling.

 

I couldn't justify 10% increase each year, unless I was upgrading the property each year.

 

Edited April 2, 2018 by banagan

[inThailand]

Consider a yearly renewal option instead of a 3 year fixed term. This way you have a yearly outclause option and if staying you know you lease amount.

[inThailand]

But with most legal documents they don't matter much here because of ethics and the legal system. So with this risk paying advance money for a non registered lease may turn out to be a nightmare. 

[sfokevin]

Given the huge oversupply of both condos and houses in all parts of Chiang Mai if I were presented with any agreement that had a rent increase built in I would grin and walk away...

 

And if my present landlord suggested a rent increase after my lease in up I would agree and give them 90 days notice and move nearby to an even cheaper and newer house... 

Edited April 2, 2018 by sfokevin

[Lacessit]

1 hour ago, sfokevin said:

Given the huge oversupply of both condos and houses in all parts of Chiang Mai if I were presented with any agreement that had a rent increase built in I would grin and walk away...

 

And if my present landlord suggested a rent increase after my lease in up I would agree and give them 90 days notice and move nearby to an even cheaper and newer house... 

Unfortunately, some Thais are so afflicted by greed they have no concept of future consequences.

I know of a business in one popular tourist area that was doing well, so the landlord hiked the rent by 50%. The business moved out about a year ago, and the shop has been empty ever since.

[banagan]

6 minutes ago, Lacessit said:

Unfortunately, some Thais are so afflicted by greed they have no concept of future consequences.

I know of a business in one popular tourist area that was doing well, so the landlord hiked the rent by 50%. The business moved out about a year ago, and the shop has been empty ever since.

I think this is more common with retail, like you mentioned. I saw this a lot in China also, when landlords see a business doing well... short sighted greed takes over.

 

The overwhelming consensus for residential property I'm getting, is not the case. I think they maybe thought I just got here :D

 

 

 

[lkn]

On 4/2/2018 at 11:58 AM, banagan said:

At this point, I think a 5% increase would be fair

The fair thing would be to base it on a price index which would probably put it around 1-2%.