New Business

[blueeyes]

Hi all I am thinking of buying some land and building apartments to rent out in northeast thai, what sort of budget do you think i would need??? i want to keep costs to a minimum.

[Morden]

Hi Blue Eyes,

I can speak only from experience around Korat Province but I hope this helps.

Assuming that you are talking about the typical single rooms plus toilet:

1. Land prices, as I'm sure you know, vary considerably.

2. The building cost for a block of 10 would be somewhere between 1.0m and 1.5m Baht. Remember to allow for connecting the water and electricity supply.

3. Allow for maintenance but this should not be a high figure.

4. Always assume some unoccupancy. The rate may be very low if you build in the right area but allow, say, 20%.

5. Rents are around 1,000 Baht per month per unit.

In my view, the return is too low and the buildings are not easy to convert to another use. However, once they're built, there's not too much work to do.

Good luck!

[blueeyes]

Hi Blue Eyes,

I can speak only from experience around Korat Province but I hope this helps.

Assuming that you are talking about the typical single rooms plus toilet:

1. Land prices, as I'm sure you know, vary considerably.

2. The building cost for a block of 10 would be somewhere between 1.0m and 1.5m Baht. Remember to allow for connecting the water and electricity supply.

3. Allow for maintenance but this should not be a high figure.

4. Always assume some unoccupancy. The rate may be very low if you build in the right area but allow, say, 20%.

5. Rents are around 1,000 Baht per month per unit.

In my view, the return is too low and the buildings are not easy to convert to another use. However, once they're built, there's not too much work to do.

Good luck!

Thanks for advice great help?? do you live in khorat?? the apartments you mentioned where the ones i was thinking of, can you think of a better idea where i could possibly get a better return.

[Khun Jean]

I think you should aim for an ROI of at least 10%.

For the above it would be somewhere around 2 MB to build it including land (low estimate).

If it has 10 units they 'should' be rented out for at least 1600-1700 a month.

If this rental price is too high for the area you could scale up and hopefully have a lower building price per appartment.

Other scenario is buildi in a more expensive area. But the 10% ROI should be the minimum.

[blueeyes]

I think you should aim for an ROI of at least 10%.

For the above it would be somewhere around 2 MB to build it including land (low estimate).

If it has 10 units they 'should' be rented out for at least 1600-1700 a month.

If this rental price is too high for the area you could scale up and hopefully have a lower building price per appartment.

Other scenario is buildi in a more expensive area. But the 10% ROI should be the minimum.

thanks i think that 1500 is realistic to achieve looks like it will take 10 years to get my money back before profit but i guess its

like paying myself a small pension??

[puuchai299]

Hi Blue eyes.If you want to be more sure of your investment,then think about buying land in a good location that is easily saleable in the future,or buying some apartments already built and occupied,then the rents coming in from day one,also eliminates the hassle of controling builders to do a good job,one good thing in having rooms for thais is the fact that your not relying on high and low seasons as with farangs.

I intend to do the same thing in Pattaya,ive been looking at various buildings land and projects for around 2 months so far,i seem to be concluding that buying a ready made apartment block is better.