can a foreigner own 5 condo units for rentals

[steven100]

16 minutes ago, Bang Bang said:

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.

understand, my thai friend is very much ok, he will look after it all and i'll help him out as always.

[steven100]

55 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.

BTW ....  how much is Thai income tax payable  ?  15% of annual gross   ??

Edited April 8, 2019 by steven100

[MiNombreEsFicticious]

How much are you paying your Thai friend for his work? And how will you keep him honest from whatever country you're in? Anyone would fight the temptation to keep the rent money and just tell you "oh, the tenant is late in paying" or "the tenant moved out in the middle of the night without paying", or even easier, he'll just off his mobile. One thing I've learned about Thai, everything turns out more expensive than you expected and produces much less revenue than your optimism predicted. 

[Peterw42]

10 minutes ago, steven100 said:

BTW ....  how much is Thai income tax payable  ?  15% of annual gross   ??

Its a sliding scale, you can earn a reasonable amount before the higher rates kick in.

Also, a lot of student accommodation is run like a monthly hotel, because they get month long breaks and go back home, the students don't sign yearly leases. Some of the kids going to Uni a very well off, mum and dad just buy them a 400k condo for the 3-4 year degree.

 

[steven100]

37 minutes ago, MiNombreEsFicticious said:

How much are you paying your Thai friend for his work? And how will you keep him honest from whatever country you're in? Anyone would fight the temptation to keep the rent money and just tell you "oh, the tenant is late in paying" or "the tenant moved out in the middle of the night without paying", or even easier, he'll just off his mobile. One thing I've learned about Thai, everything turns out more expensive than you expected and produces much less revenue than your optimism predicted. 

ok understand .....  I have known my friend for 15+ years and assist him when applicable, we drink together ever time i'm in Bangkok, and i stay at his condo when i come down to BKK for a few nights .... so I think his honesty isn't questionable ..(hope so) 

But, as he just rented his new bought room, he will open another bank account solely for purpose of rent income on his new room. the tennant will give him deposit which he'll put into the account and she will auto transfer every month into that account ....and that's what I would do ..... seperate account ... so the rental is going directly into an account and only I can access it. He will just handle finding a tennant ( whcih Ill give hime some comm for that ) ...also making the room new, and obviously he will arrange the rental contract.

[moontang]

2 hours ago, Peterw42 said:

Its a sliding scale, you can earn a reasonable amount before the higher rates kick in.

Also, a lot of student accommodation is run like a monthly hotel, because they get month long breaks and go back home, the students don't sign yearly leases. Some of the kids going to Uni a very well off, mum and dad just buy them a 400k condo for the 3-4 year degree.

 

But, isn't rental income taxed differently and separately?  And also on the gross, as in before expenses and depreciation.  Look at the land office taxes...you get zero benefit for putting money into fixing it up..except for a higher sales price, hopefully.

 

 

http://usa.siam-legal.com/property-thailand/offshore-income.php

 

So, 12.5% on the gross rent, then income tax on the net.  I stand by my original statement...40% of monthly rent for expenses..now you got 27.5%, before you even pay the maintenance fee.  

Edited April 8, 2019 by moontang

[KittenKong]

2 hours ago, MiNombreEsFicticious said:

One thing I've learned about Thai, everything turns out more expensive than you expected and produces much less revenue than your optimism predicted. 

Indeed. Prices quoted here rarely include everything.

[Destiny1990]

U are talking about appartments not freehold condos are u?

What ownership structure would u select for such rooms?

[GeKoSc]

If you organize the renting of your apartments or Condos through an real estate agency, they will do the work for you. No need to set up a company. But you have to find the right (professional) company which will give your properties sufficient attention, knows the proper maintenance, prepares all required doumentation (including bookkeeping) and rent fast out...so, make your calculations and find out if your idea is worth it to implement...

[Peterw42]

56 minutes ago, moontang said:

But, isn't rental income taxed differently and separately?  And also on the gross, as in before expenses and depreciation.  Look at the land office taxes...you get zero benefit for putting money into fixing it up..except for a higher sales price, hopefully.

 

 

http://usa.siam-legal.com/property-thailand/offshore-income.php

 

So, 12.5% on the gross rent, then income tax on the net.  I stand by my original statement...40% of monthly rent for expenses..now you got 27.5%, before you even pay the maintenance fee.  

Yes you are right, i was just passing along he income tax rates because thats what OP asked for.

I have never really understood that 12.5% tax, or know anyone who pays it, lol. I always thought it was on net rent.

Wife rents out some properties and gives me a blank look if I ask about it.

 

A little update, after a tedious conversation with wife, it appears the 12.5% is/was only collected on leases registered at the land office. otherwise tax office is unaware. The tax is/was 12.5% of the assessed rental value, not the actual. the tax actually gets scrapped sometime this year being replaced with the new property taxes.

 

 "When the Act on Land and Building Tax comes into effect 2019, it will replace the current 12.5 percent house and land tax with a 0.3 percent property tax on land and buildings used for commercial purposes"

Edited April 8, 2019 by Peterw42

[moontang]

but it gets more complicated...if it is owned by a company, the tax is due, rented or not, and yes it is a lot more reasonable than full fare...and tbh, i bought a house with a lawyer and recorded lease, and never paid the tax..however 500,000 for 30 years was about 1250 per month, when fair market was 8-12000.  Still, It was an aggravation of being a leaseholder.  A friend in HH pays it, about 20,000 per year, but his home was owned by a company.....It has obviously caused a problem with TM 30 as many thais want nothing to do with it, and the reason seems to be taxes.

 

And having just reread your post, I am wondering if commercial can only be done by a company.  

Edited April 8, 2019 by moontang

[steve187]

12 hours ago, KittenKong said:

smaller units

so what is one of these called

[KittenKong]

6 hours ago, steve187 said:

so what is one of these called

In a condo building they are called condos and are individually owned, with individual title deeds, and with each unit owner also owning a proportional share of the whole building.

In an apartment building they are called apartments and are not individually owned. The entire building is owned as a single entity with just one title deed and the individual units are then rented out.

 

The legal structure is totally different.

[steven100]

On 4/8/2019 at 6:15 PM, Destiny1990 said:

U are talking about appartments not freehold condos are u?

What ownership structure would u select for such rooms?

Well, the advert selling the room say condo .... and it's freehold.

The ownership would just have my name on the chanote/title.   ?

 

However, since investigating more with a Thai friend, he says farang or Thai cannot buy 3 or several rooms for rentals. He says that you would be required to be a registered company to do that.  I have to look into it further but it sounds like I cannot own 5-10 rooms for rentals.

[steven100]

On 4/8/2019 at 6:16 PM, GeKoSc said:

No need to set up a company.

wrong ?   I have been told by a Thai friend who is with a law firm that farang or thai cannot own 3 or more rooms for rental.  Don't quote me on the exact number,  however .... it's not possible as far as I can gather. I have to investigate more into this.

[steven100]

On 4/9/2019 at 7:27 AM, KittenKong said:

In a condo building they are called condos and are individually owned, with individual title deeds, and with each unit owner also owning a proportional share of the whole building.

In an apartment building they are called apartments and are not individually owned. The entire building is owned as a single entity with just one title deed and the individual units are then rented out.

 

The legal structure is totally different.

so therefore, I'm referring to condos .......

[steven100]

On 4/8/2019 at 5:38 PM, moontang said:

So, 12.5% on the gross rent, then income tax on the net. 

so are you saying that it is taxed twice ??  I don't believe that.

[moontang]

2 hours ago, steven100 said:

so are you saying that it is taxed twice ??  I don't believe that.

Land and House Tax is a local tax, income tax is national.  You would be able to deduct expenses, and allowable depreciation on the furnishings and the unit to determine income tax.  If American, you would also owe on net unearned income from abroad, but you would also get a non-refundable credit for taxes paid abroad.  The company route is better for some.

[KittenKong]

On 4/10/2019 at 9:13 AM, steven100 said:

wrong ?   I have been told by a Thai friend who is with a law firm that farang or thai cannot own 3 or more rooms for rental.  Don't quote me on the exact number,  however .... it's not possible as far as I can gather. I have to investigate more into this.

I have never heard of any such rule. I know several farangs who own more than 6 condos here, and several Thais too. So unless it is a new rule that came in after they bought I dont see how it could be true.

[Date Masamune]

You cant do work without as a foreigner without a WP

Showing rooms, handing out keys, collecting rent, all work.

The TM30 reporting is an issue that can get you in Hot water with Imm

Income tax must be payed. The only way you can do all this legally is through an agent,

and their cut and fees.

 

Maybe you can start a Thai Real estate company?

[steven100]

On 4/8/2019 at 2:53 PM, 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. 

Since posting about this back in April, I have looked at one 8 room building yesterday and will be looking at another with 18 rooms.  Now both these are apartment buildings with single rooms. One building has 8 rooms and another has 18. 

They both are currently 50% rented out now, as some student have left because their university term is completed. Rooms bring in 2500, 2800, 3000 baht per month. No real issue with getting them rented as they are surrounded by the university with thousands of students occupying rooms there.

The rooms are all furnished but some furniture may need replacing or updating. I inspected the 8 room building yesterday and was quietly impressed as all the rooms were in good condition, ( no paint needed or just touch up ) all had the medium fridge, tv, satellite, bed, cupboards etc ..

 

Now comes the tricky question ……  A farang cannot purchase either of these two buildings because the 8 room building and the 18 room building will be under one title each. So it's not purchasing the rooms individually as such, it's the whole building and therefore the land which they sit on. ???

Am I correct  ??

Also,  is there any safe ( safe for me and my $$ )  any safe way to circumvent the above ???

Could it be purchased under two names ( me & my Thai partner on the Title )   ???

Could it be purchased under a company name ??  so I would have to set up a company through a Thai lawyer .. ?  and this maybe very expensive ??

Is there another way to go about it that is easier  ????

 

thanks for any advice.

 

 

Edited July 9, 2019 by steven100

[tjo o tjim]

You can only control 49% of the land as a foreigner. You could buy the buildings and lease the land for 30 years, but that is essentially the most you can do without a Thai partner. 

 

You would likely need need to set up a company that rents the condos and is 51% Thai owned to purchase the property. You would have limited protection on your investment. 

[steven100]

52 minutes ago, tjo o tjim said:

You could buy the buildings and lease the land for 30 years,

complicated …. I'll talk with a lawyer ..thanks.

[Lacessit]

My English landlord used to own 8 apartments in my condo. I understand he's now sold down to 4.

He has an agent who takes care of stuff such as rental collection, maintenance and bureaucratic paperwork.

[blackcab]

Q: So it's not purchasing the rooms individually as such, it's the whole building and therefore the land which they sit on. ??? Am I correct  ??

 

A: You are correct. This is an apartment building.

 

Q: Also, is there any safe ( safe for me and my $$ )  any safe way to circumvent the above ???

 

A: The only way would be with a limited company with a preference share structure. "Safe" is relative. One day the law might change to disallow this type of legal structure, but for now it is allowed.

 

Q: Could it be purchased under two names ( me & my Thai partner on the Title )   ???

 

A: No. A non Thai person cannot own this type of land and building.

 

Q: Could it be purchased under a company name ?? 

 

A: Yes, but you could only own a minority of the company. There are, however, structures which give you control of the company through preference shares.

 

Q: So I would have to set up a company through a Thai lawyer .. ?  and this maybe very expensive ??

 

A: Companies can be set up inexpensively, however you would require a preference share structure. You get what you pay for - just make sure the lawyer you use comes recommended by someone who knows what they are talking about.

 

Q: Is there another way to go about it that is easier  ????

 

A: No. If you are absolutely set on the idea then it will have to be the company route.

[steven100]

5 minutes ago, blackcab said:

The only way would be with a limited company with a preference share structure.

Thank's Blackcab ….  you've provided a good insight into what can and cannot be done. As mentioned I will look into it further and sit down with an English/thai speaking lawyer.

The reason I like this is because the return ROI is better than having a rented property back in Auss, and if it can be done through a company and me having a preference share structure in place so as the investment has some security attached then sounds ok.  

[ThomasThBKK]

Additonally you can try to get a usufruct or lease agreement glued on top of the company structure, preferable from the current owner.