can a foreigner own 5 condo units for rentals

[steven100]

Hi,

Who is knowledgable on foreigner condo ownership in Thailand for rental returns.

I am seriously thinking about purchasing 5-10 appartment rooms for rental.

I see a market there for students and lower end pricing for rental in the Lad Prao and Ramkhampang areas.

Obviously, one would have to pay Thailand tax ....

Is it possible and allowed ???  any pitfalls ???  any hidden annual costs to be aware of  ??

 

Thanks for any help.

[allane]

You can own as many units as you want. Bear in mind, there is a quota per building. Foreigners, collectively, can not own more than 49% of the total 

[SheungWan]

Does renting out units require a work permit?

Edited April 8, 2019 by SheungWan

[gk10002000]

Many individual people have been owning and renting out their condos for years and decades.  Technically it is illegal.  Technically there is no work permit for such an activity unless one formed a proper company. 

[tlandtday]

I am glad someone sees a market for it.  With the Chinese competition and the headaches involved renting at lower rates this is a profession I would try to avoid:)

[KittenKong]

22 minutes ago, SheungWan said:

Does renting out units require a work permit?

No, as long as you dont actually do any work yourself. "Work" could be showing people around, collecting rent, decorating, repairing ........

So you should employ some sort of agent for that.

[KittenKong]

52 minutes ago, steven100 said:

Who is knowledgable on foreigner condo ownership in Thailand for rental returns.

I am seriously thinking about purchasing 5-10 appartment rooms for rental.

There is a massive legal difference between apartments and condos here. Condos are a specific legal structure for residential property with individual ownership of each unit. Apartments are single ownership buildings that are divided into smaller units for rental purposes.

[jackdd]

At first you should understand the difference between an apartment and a condo

You can own as many condos as you want, but you need a management company to do the work for you (unless you set up your own management company and get a work permit)

[moontang]

they may not accept TM30 from you as a foreign owner....that allows them to protect the Thai landlords.  Too many activities would be considered work..so anytime there is a situation, you would be in a three legged race with a thai...and I just addressed this in the bank rate thread, but don't ever calculate yields based on daily rates.

[steven100]

54 minutes ago, moontang said:

they may not accept TM30 from you as a foreign owner....that allows them to protect the Thai landlords.  Too many activities would be considered work..so anytime there is a situation, you would be in a three legged race with a thai...and I just addressed this in the bank rate thread, but don't ever calculate yields based on daily rates.

Not sure why I would even be involved with the TM30 .... as I would be renting to Thai students, not farangs. 

Any work that needs doing .... I would just have a thai fix or do the work.

As for the ROI, a 400k room can return 11% gross ..... or 8-9% net profit.

[steven100]

1 hour ago, jackdd said:

At first you should understand the difference between an apartment and a condo

You can own as many condos as you want, but you need a management company to do the work for you (unless you set up your own management company and get a work permit)

So I would be renting out appartments not condos. ?  Appartments meaning a single room in a block of units.  ?   I pay a monthly commission to an agent as a management fee for finding tennants and handling the contracts for letting.  ?  I have a Thai friend who can manage all these requirement as he is not letting out a room he just purchased.

[steven100]

1 hour ago, KittenKong said:

There is a massive legal difference between apartments and condos here. Condos are a specific legal structure for residential property with individual ownership of each unit. Apartments are single ownership buildings that are divided into smaller units for rental purposes.

So being a single room in a block of units ..... therefore it's single room appartment i'm buying and letting  ??

[moontang]

a 400k room renting for 3650 per month?  That is overly optimistic, and more than they would pay outside of bkk.  deduct 40% from the gross to get net...if not 50%...you  have barely allowed enough for taxes in your calculation.  insurance, condo fee?  management , vacancies, 

[steven100]

1 hour ago, tlandtday said:

I am glad someone sees a market for it.  With the Chinese competition and the headaches involved renting at lower rates this is a profession I would try to avoid:)

Not sure why you say headaches,  a thai friend just bought a room at a good price, painted it inside completely, new tiled floor,  new aircon, new furniture kit put in,  now he's had several offers from friend near and at his work to rent the room.

All done in a matter of weeks ......  nothing was a real headache, I didn't see one chinese competitor,  no issue renting at 4,000 baht. 

Edited April 8, 2019 by steven100

[moontang]

1 minute ago, steven100 said:

Not sure why you say headaches,  a thai friend just bought a room at a good price, painted it inside completely, new tiled floor,  new aircon, new furniture kit put in,  now he's had several offers from friend near and at his work to rent the room.

All done in a matter of weeks ......  nothing was a real headache, I didn't see one chinese competitor,  no issue renting at 4,500 baht. 

400k purchase...land office fees?  cost to refurbish?  that furniture will be worthless in two years...Will need new paint too.  

[steven100]

3 minutes ago, moontang said:

a 400k room renting for 3650 per month?  That is overly optimistic, and more than they would pay outside of bkk.  deduct 40% from the gross to get net...if not 50%...you  have barely allowed enough for taxes in your calculation.  insurance, condo fee?  management , vacancies, 

As mentioned in another post,  a friend just bought a room, just did new paint, aircon, floor, furniture, and offers at 4,000 from several friends. I think your 40% deduction off gross is very high .....   Condo fee is paid by the tennant,  insurance is not high in Thailand and management could be done by my Thai collegue.  So I think 20% deduction may be more accurate. But I'm just saying based on other thais answers.

[steven100]

4 minutes ago, moontang said:

400k purchase...land office fees?  cost to refurbish?  that furniture will be worthless in two years...Will need new paint too.  

yes ......  correct on land office fees which is 24,000 baht, I forgot that .... but still not so bad.

refurb was only 11,000 baht, and i would expect paint to last more than 2 years.....   surely 5 at least if non smokers.

[moontang]

18 minutes ago, steven100 said:

As mentioned in another post,  a friend just bought a room, just did new paint, aircon, floor, furniture, and offers at 4,000 from several friends. I think your 40% deduction off gross is very high .....   Condo fee is paid by the tennant,  insurance is not high in Thailand and management could be done by my Thai collegue.  So I think 20% deduction may be more accurate. But I'm just saying based on other thais answers.

considering the tax is 15% on rentals...and a one month vacancy would cost you 8.33% of gross.  ever tried getting summer rent out of college students?

Edited April 8, 2019 by moontang

[moontang]

1 minute ago, steven100 said:

yes ......  correct on land office fees which is 24,000 baht, I forgot that .... but still not so bad.

refurb was only 11,000 baht, and i would expect paint to last more than 2 years.....   surely 5 at least if non smokers.

11000?  what about the bed and a/c?  

[steven100]

Just now, moontang said:

11000?  what about the bed and a/c?  

11,000 was for bed, matress and cupboards, tv stand etc ....  yes, aircon was additional 11,000 also. Still, he painted it with a friend on a Sunday .... aircon monday and new floor tiles same week for 8,000bht.  All up 30,000 .... and he has a brand new room for rental.

[NCC1701A]

5 minutes ago, steven100 said:

correct on land office fees which is 24,000 baht, I forgot that

anytime I start a project I open a spread sheet and just start adding rows and columns for every item and there is the bottom line.

 

you can automatically calculate percentages and project forward over a year.    

 

this works with girlfriends also.

[NCC1701A]

4 minutes ago, steven100 said:

and he has a brand new room for rental.

my girlfriend can find anything used on Facebook. i bought a 25,000 BTU AC for not much.

maybe your Thai friend can do the same. Buy used EVERYTHING where possible. 

 

[steven100]

2 minutes ago, NCC1701A said:

anytime I start a project I open a spread sheet and just start adding rows and columns for every item and there is the bottom line.

 

you can automatically calculate percentages and project forward over a year.    

 

this works with girlfriends also.

I'm going to do just that ... I'll start one today with Excel. Then I can see exactly what the outgoings will be ....  and rental return. 

[moontang]

why are tv stands still so popular here?  can get a great wall mount bracket with level bubble built in for 250 thb...and frees up quite a bit of space, as well as reducing risk to tv.

Edited April 8, 2019 by moontang

[moontang]

7 minutes ago, NCC1701A said:

my girlfriend can find anything used on Facebook. i bought a 25,000 BTU AC for not much.

maybe your Thai friend can do the same. Buy used EVERYTHING where possible. 

 

but if it uses double the e!electricity of a new one the joke is on you.

[steven100]

2 minutes ago, moontang said:

why are tv stands still so popular hete?  can get a great wall mount bracket with level bubble built in for 250 thb...and trees up quite a bit of space, as well as reducing risk to tv.

agree ... and tv stands are a bit outdated ..... maybe some still have a telephone table with the black rotary dial, or a meat safe hanging on the balcony .... lol

But the tv stand came with the kit .....  put a pot plant on it ...

[Peterw42]

37 minutes ago, steven100 said:

So being a single room in a block of units ..... therefore it's single room apartment i'm buying and letting  ??

If you own a single room with its own separate title its a condominium, if you own the whole building of apartments on one title its an apartment block, you cant buy a single room in an apartment block.

Condo fees are always paid by the owner, not the tenant.

Another thing to consider is most universities have multi story student accommodations on campus for like 2,000 baht a month. 

[Bang Bang]

3 hours ago, steven100 said:

I am seriously thinking about purchasing 5-10 appartment rooms for rental.

For the under-1mil condos the own-to-rent numbers look good. But buy one first and see how it goes. You'll see all the issues and if dealing with them is worth it.

 

Edited April 8, 2019 by Bang Bang

[Bang Bang]

48 minutes ago, steven100 said:

management could be done by my Thai collegue

Just saw this. Don't want to cast aspersions but you'll be the odd farang out in a potential love triangle, I mean an owner-manager-renter triangle. Well, as long as you know what you're doing.

 

Of course, if the colleague is a gf that's a different ball game.

[steven100]

13 minutes ago, Peterw42 said:

If you own a single room with its own separate title its a condominium, if you own the whole building of apartments on one title its an apartment block, you cant buy a single room in an apartment block.

Condo fees are always paid by the owner, not the tenant.

Another thing to consider is most universities have multi story student accommodations on campus for like 2,000 baht a month. 

That's interesting .....  now in the add for sale it states ... type :  Condo for sale ....  so technically I can purchase 5 the same as this, differnt buildings obviously. ??  but it's actually one room plus bathroom.