Buying a condo to rent it out

[Capitalist]

Dear forum members,

 

I am a Dutch passport holder with 250K USD to invest. I've lived a year or two in Thailand before. I am thinking of buying a condo to rent it out.

 

But I've never bought real estate there, So I feel uncomfortable dropping 150K USD on one nice condo. I'd like to start smaller. Such as a $40K condo outside of Bangkok, just to see how it goes. If things go well, I might buy more and more. One obstacle is that I don't know anyone who has experience with buy-to-let, as it's called. If you have experience with buying condo's and renting it out, I welcome you sharing your experience, the risks, hurdles, or anything useful here. You can also private msg me if you'd like.

[madmen]

nice first post dude ????

[Chris.B]

" I've lived a year or two in Thailand before."

 

You don't know how long you lived in Thailand? ????????

[bojo]

There are just so many threads on here about this subject, If you use the search button, you will find loadsa info and more.................

[Capitalist]

28 minutes ago, Chris.B said:

" I've lived a year or two in Thailand before."

 

You don't know how long you lived in Thailand? ????????

Between 1,5 and 2 years.

 

2 minutes ago, bojo said:

There are just so many threads on here about this subject, If you use the search button, you will find loadsa info and more.................

I did use the search, and I could not find any experiences of people renting out condo's. Feel free to share if you did.

[bojo]

22 minutes ago, Capitalist said:

I did use the search, and I could not find any experiences of people renting out condo's. Feel free to share if you did.

I have messaged you a couple of suggestions..........however you're right, it's not easy to find on the search function here......................hopefully some professionals will spill the beans for you....................If it was me, I would be putting myself in the eyes and mind of the renter and asking myself, what would they want when looking for a condo and then targeting those requirements. There are some areas not far from Pattaya which have older condos which are much larger in square metres and are very reasonably priced and IMO would make great rentals...check some Pattaya vloggers on youtube, a bit time consuming but worth doing the research..................

[chickenslegs]

The search facility on thaivisa is very poor. You will have more success using google and adding the word thaivisa to your search. For example googling "buying a condo to rent out in thailand thaivisa" gives several TV topics at the top of the page.

 

Can't help you with advice about buy to rent except to say that I regret not doing the same when I first moved here, 16 years ago, with a lump of money in my pockets. It would have given me a THB income, protected from the ever-changing exchange rate.

[Capitalist]

16 minutes ago, bojo said:

I have messaged you a couple of suggestions..........however you're right, it's not easy to find on the search function here......................hopefully some professionals will spill the beans for you....................If it was me, I would be putting myself in the eyes and mind of the renter and asking myself, what would they want when looking for a condo and then targeting those requirements. There are some areas not far from Pattaya which have older condos which are much larger in square metres and are very reasonably priced and IMO would make great rentals...check some Pattaya vloggers on youtube, a bit time consuming but worth doing the research..................

Thank you Bojo for the links you shared in the private msg.

 

I have been to Pattaya and I do not like the place. Lots of old white drunkards, and bar-girls on the streets. Nothing wrong with that, but it's not my cup of tea. I prefer Bangkok, Samut Prakan or Nonthaburi. I also think the lower-end properties in these areas make for good, stable rentals. There's plenty of work, and a constant influx of young people from other provinces. It's less subject to seasonality. But I could be wrong.

4 minutes ago, chickenslegs said:

The search facility on thaivisa is very poor. You will have more success using google and adding the word thaivisa to your search. For example googling "buying a condo to rent out in thailand thaivisa" gives several TV topics at the top of the page.

 

Can't help you with advice about buy to rent except to say that I regret not doing the same when I first moved here, 16 years ago, with a lump of money in my pockets. It would have given me a THB income, protected from the ever-changing exchange rate.

Thank you, I also tried Google and will try it more. Indeed, the Thai Baht is a good currency. Never good to be 'all in' on one country or currency, but the Baht is a good one to diversify yourself into. It's never to late to make a small change, especially if you have children, they can reap the benefits of our modest investments long after we've passed.

[scubascuba3]

People are struggling to rent them out currently. The problem with buying here is unlimited supply, in Pattaya especially

[tonray]

6 hours ago, Capitalist said:

Lots of old white drunkards, and bar-girls on the streets

You've just described paradise for most members here....ha ha ha ha

[1FinickyOne]

maybe spend some time looking for places to rent, then you will have a vague idea of the market in the area you are looking... 

 

1. where will you find your tenant?

 

one fellow I knew was looking in CM and did not understand why NOBODY discounted the price and everything seemed too expensive in a down market...

 

The answer was that the people who discounted found tenants - - the lesson for you might be not to judge market value by what people are asking... 

 

In general, it is a <deleted> business... 

[Excel]

Well for $40 k outside of Bangkok could get something but hardly worth the trouble as the rental return would be low. However there are some excellent investment deals going around now which perhaps may suit you better. How does a 22% return on a $100k investment sound to you ? Good thought so. I will give you my Nigerian pals Western Union details so if you could send the money by return then your money can start working for us you. Remember as the late Billy Butlin said " Book early for Christmas"  ????????

[Chris.B]

10 hours ago, Capitalist said:

Thank you Bojo for the links you shared in the private msg.

 

I have been to Pattaya and I do not like the place. Lots of old white drunkards, and bar-girls on the streets. Nothing wrong with that, but it's not my cup of tea. I prefer Bangkok, Samut Prakan or Nonthaburi. I also think the lower-end properties in these areas make for good, stable rentals. There's plenty of work, and a constant influx of young people from other provinces. It's less subject to seasonality. But I could be wrong.

Thank you, I also tried Google and will try it more. Indeed, the Thai Baht is a good currency. Never good to be 'all in' on one country or currency, but the Baht is a good one to diversify yourself into. It's never to late to make a small change, especially if you have children, they can reap the benefits of our modest investments long after we've passed.

 

Wow, a somewhat racist statement!! ☹️ 

 

I'll have you know, I haven't touched a drop of alcohol since breakfast time and its nearly 12 o'clock now!  ????????

 

[Capitalist]

14 hours ago, 1FinickyOne said:

1. where will you find your tenant?

 

one fellow I knew was looking in CM and did not understand why NOBODY discounted the price and everything seemed too expensive in a down market...

 

The answer was that the people who discounted found tenants - - the lesson for you might be not to judge market value by what people are asking... 

 

In general, it is a <deleted> business... 

 

I know a Thai company that finds tenants, collects rent, and deals with maintenance requests. I'm willing to give steep discounts during and after the pandemic to ensure occupancy. 

 

14 hours ago, Excel said:

Well for $40 k outside of Bangkok could get something but hardly worth the trouble as the rental return would be low. 

If the first condo goes well, you could purchase more. Let's do the math using a real life example: My Thai friend is renting a condo for $230/month. I looked up the price of the condo if one were to buy it, it's under $40K. Owning 5 condo's would gross you $1150/month. All the condo's in that area are fully occupied. It's oustide of Bangkok so not sensitive to tourism. Rents always go up with inflation, and will recover post-pandemic. 

[nkg]

Don't waste time on research, just buy some condos and see what happens ????

[Hanaguma]

Or, you can simply invest the 250K into some decent ETFs. Given a reasonable return of 5-6%, you would generate $12,500-15,000 per year-similar to the rent you hope to get. With much less hassle and stress, no cash layout for apartment renovation and furnishing, etc.  

[shdmn]

11 minutes ago, Hanaguma said:

Or, you can simply invest the 250K into some decent ETFs. Given a reasonable return of 5-6%, you would generate $12,500-15,000 per year-similar to the rent you hope to get. With much less hassle and stress, no cash layout for apartment renovation and furnishing, etc.  

That's the way I see it as well.  No tenant BS to deal with and you can liquidate or change your investments instantly.  Use that money to rent something nice you can walk away from at any time.

[Capitalist]

10 minutes ago, Hanaguma said:

Or, you can simply invest the 250K into some decent ETFs. Given a reasonable return of 5-6%, you would generate $12,500-15,000 per year-similar to the rent you hope to get. With much less hassle and stress, no cash layout for apartment renovation and furnishing, etc.  

I've been investing in stocks for 15 years and will continue to do so. I've had incredible results for which I am thankful, but I also realize it's wise to diversify at some point.

[Hanaguma]

1 minute ago, Capitalist said:

I've been investing in stocks for 15 years and will continue to do so. I've had incredible results for which I am thankful, but I also realize it's wise to diversify at some point.

If real estate is calling, you could get into a REIT or a real estate based ETF as well. Not sure what is available in Europe, but in North America they are everywhere. 

 

I just see tying up so much capital for such a minimal potential gain as simply not worth it. Large risk for minimal profit. Particularly in a country with laws and regulations that are far different than we may be used to.  

[1FinickyOne]

55 minutes ago, Capitalist said:

I know a Thai company that finds tenants, collects rent, and deals with maintenance requests. I'm willing to give steep discounts during and after the pandemic to ensure occupancy. 

I have a condo that is rented out.. I had not bought it for rental... but circumstances arose... I was also very lucky to find a tenant right in the beginning of covid crisis... and lucky again to get a good tenant... I did comprise the price over what might have been the norm in the building... but I am getting about 3% on my money... 

 

You seem to be thoughtful and doing your due diligence... best of luck to you... 

[shdmn]

52 minutes ago, Capitalist said:

I've been investing in stocks for 15 years and will continue to do so. I've had incredible results for which I am thankful, but I also realize it's wise to diversify at some point.

If you understand it's wise to diversify then you should own REITs.  No need to own real estate directly which is far more risky.  Only good reason to own real estate directly is as a primary residence.

[DerbyDan]

feels like a disaster waiting to happen ????

 

1. my 1st thought is how do you get people out who can't pay or who pay late? or handle safely keeping deposits for damages?

 

2. how to do vet people creditwise?

 

3. are you able to pick up nuances of a reference or employer conversation on the phone in a culture that won't obvertly give out bad info on somebody?

 

4. best case scenario imo would be hire a management company to do it, but i have had problems with that even in my home country where i had full rights and had to cut them off for various reasons.

 

5. there is also airbnb who holds the money and your both bounded by their contract, but it's monthly or daily, pretty much a full time job. it also has reviews, with a grain of salt. this could work but they do BOW OUT if something serious happens. in other words all you would get back at best is the payment for the month, nothing more.

 

5. what happens with my rentals is i find someone who looks great initially. soon after they start asking for things to be repaired or replaced to a higher standard. you go ahead and do what they ask because you want them to stay and be happy. their demands increase the more you comply. after awhile you start feeling like you want them out. (your experience may differ of course, perfect tenants are out there ????).

 

people who are renting have all sorts of problems and they kind of get linked to the landlord in a way. with a sale your just one and done, everything is pat settled and it becomes someone else's problem.

[Airalee]

On 6/18/2021 at 10:27 PM, Capitalist said:

One obstacle is that I don't know anyone who has experience with buy-to-let, as it's called

 

2 hours ago, Capitalist said:

I know a Thai company that finds tenants, collects rent, and deals with maintenance requests. I'm willing to give steep discounts during and after the pandemic to ensure occupancy.

these statements sound pretty contradictory.  Wouldn’t the Thai company that you know provide you with better advice than our anecdotes? (Then again, I probably wouldn’t trust their advice) My former landlord appears to have a 50% occupancy rate on his condos and that’s with dropping rents 30%+ and he’s the most proactive landlord I have ever known when it comes to procuring tenants. It’s a full time job basically.  Then, deduct for management fees, taxes, cleaning, repairs, common fees, special assessments  etc etc etc.

 

Finally, look around between the hours of 7pm and 10pm and you’ll see that most buildings are at about 10-20% occupancy  (My building is at 13% occupancy)  Even the cheap ones.  You’re certainly not going to get $230 (฿7,000) per month rent for a $40k (฿1.2mm) condo.  I see 2.2 million baht condos asking ฿8000 month and can probably be had for ฿6000-7000 after negotiations.  

 

You really want all the headaches and risk (of no tenants, damages, unpaid rent, etc) for a less than 3% return?  Knock yourself out.  

[DerbyDan]

will add to my post above...

 

if it's the kind of thing you like to do anyway, or are retired and money is not the primary objective, i could see going ahead with just one cheap place, meet people in person and see how it goes.

 

it could be an interesting retirement project or way to meet people, if you have the right mindset. if your not stretched financially the problems that do arise have a way of working themselves out given time.

 

 

[Capitalist]

5 minutes ago, Airalee said:

My former landlord appears to have a 50% occupancy rate on his condos and that’s with dropping rents 30%+ and he’s the most proactive landlord I have ever known when it comes to procuring tenants. It’s a full time job basically.  Then, deduct for management fees, taxes, cleaning, repairs, common fees etc etc etc.

 

Finally, look around between the hours of 7pm and 10pm and you’ll see that most buildings are at about 10-20% occupancy  (My building is at 13% occupancy)  Even the cheap ones.  You’re certainly not going to get $230 (฿7,000) per month rent for a $40k (฿1.2mm) condo.  I see 2.2 million baht condos asking ฿8000 month and can probably be had for ฿6000-7000 after negotiations.  

 

You really want all the headaches and risk (of no tenants, damages, unpaid rent, etc) for a less than 3% return?  Knock yourself out.  

Thanks for sharing your thoughts. You raise good points. May I ask in which neighborhood you saw that low occupancy rate?

I've seen the same low occupancy in central Bangkok recently. Lack of tourism really butchered the rental market, and there's tons of condos for sale. Supply is vast and demand is low. It's a buyers market right now.

 

I'm aware rents have dropped. Please note I'm not interested in getting quick yield/cashflows. I'm willing to wait a year or two for things to return normal again. In fact, I'm not even sure I want to rent it out, as I might want to live there myself, even if it's a few months per year. 

[Capitalist]

23 minutes ago, DerbyDan said:

if it's the kind of thing you like to do anyway, or are retired and money is not the primary objective, i could see going ahead with just one cheap place, meet people in person and see how it goes.

 

it could be an interesting retirement project or way to meet people, if you have the right mindset. if your not stretched financially the problems that do arise have a way of working themselves out given time.

 

 

Thanks for understanding Dan. Indeed, i'm not using my last buck and insisting on it being profitable. My primary goals are to expand my horizon, learn something new, and diversify. In the worst case scenario, my first condo unit would not have any renter, and I'd be happy to live there myself. 

 

[ChaiyaTH]

If you insist on being as well staying profitable, you should never want to enter the Thai market in the first place. The wise people come to spend money in Thailand, not earn it (exceptions only exist with very proper timing, which isn't now or soon).

 

That aside the entire domestic real estate market is a bubble that is bursting as we speak. Guess the 1.5-2 years living in TH haven't been near enough, else you would concluded this yourself already too.

 

As you are not short on money you must have some sort of tunnel vision to wanting it to be real estate. Go pioneer in Vietnam instead, it is one of the fastest growing countries globally.

[Ron jeremy]

20 minutes ago, Capitalist said:

Thanks for sharing your thoughts. You raise good points. May I ask in which neighborhood you saw that low occupancy rate?

I've seen the same low occupancy in central Bangkok recently. Lack of tourism really butchered the rental market, and there's tons of condos for sale. Supply is vast and demand is low. It's a buyers market right now.

 

I'm aware rents have dropped. Please note I'm not interested in getting quick yield/cashflows. I'm willing to wait a year or two for things to return normal again. In fact, I'm not even sure I want to rent it out, as I might want to live there myself, even if it's a few months per year. 

Don’t think it’s easy to rent out a condo, there are 10s of thousands for rent or sale, I believe 25,000 in pattaya and 100,000 in bangkok 

I would certainly think your capital being invested would bring much more income. -and your money is in your bank in your country. 
for the sake of living there for only a few months a year????????????

I would strongly suggest you sit down and give this serious thought!

[AlexRich]

I’d guess everyone’s experience is different. If you buy a condo and get a long term tenant who looks after it and pays the rent promptly, it’s a good result. If you get problem tenants or have long time periods between tenants it becomes like a weight round your neck, more so if you are outside of Thailand. The hassle factor puts me off.

[shdmn]

2 hours ago, ChaiyaTH said:

If you insist on being as well staying profitable, you should never want to enter the Thai market in the first place. The wise people come to spend money in Thailand, not earn it (exceptions only exist with very proper timing, which isn't now or soon).

 

That aside the entire domestic real estate market is a bubble that is bursting as we speak. Guess the 1.5-2 years living in TH haven't been near enough, else you would concluded this yourself already too.

 

As you are not short on money you must have some sort of tunnel vision to wanting it to be real estate. Go pioneer in Vietnam instead, it is one of the fastest growing countries globally.

One major problem with Vietnam is there is no retirement visa.  Right now they are not even doing extensions but that will probably come back.  So right now it's only 30 day stay if/when you can get back in.