Buy a condo to Airbnb - is it really profitable?

[ChipButty]

11 minutes ago, jaideedave said:

FYI It's listed on Booking.com.I wonder if contacting them will bear any fruit?

I tried searching their site I cant see any links and their customer service is not very good, unlike Airbnb they give you a link to look at, https://www.airbnb.com/help/article/3290 

[jaideedave]

49 minutes ago, ChipButty said:

I tried searching their site I cant see any links and their customer service is not very good, unlike Airbnb they give you a link to look at, https://www.airbnb.com/help/article/3290 

Wow, the link is very informative. I wish Booking.com had that.I have to register and sign in  to even access their help line ffs. Then they want a booking number...I'm not very optimistic.

[ChipButty]

26 minutes ago, jaideedave said:

Wow, the link is very informative. I wish Booking.com had that.I have to register and sign in  to even access their help line ffs. Then they want a booking number...I'm not very optimistic.

I even logged into my account, they don't make it easy to contact them 

[pomchop]

Obviously a lot of people who do illegal airbnb rentals in condos are very special people and it is their absolute right to do anything they want regardless of the laws or the total disruption of long term occupants.  I hope that wherever these people live that some thai opens a nice karaoke bar or a pig farm next door to them or their neighbor decides to airbnb next door to their condo and let them experience first hand what they seem to think is just fine to do to other people. 

[mokwit]

10 minutes ago, pomchop said:

Obviously a lot of people who do illegal airbnb rentals in condos are very special people and it is their absolute right to do anything they want regardless of the laws or the total disruption of long term occupants.  I hope that wherever these people live that some thai opens a nice karaoke bar or a pig farm next door to them or their neighbor decides to airbnb next door to their condo and let them experience first hand what they seem to think is just fine to do to other people. 

The increase in interest rates has gutted many AirBnB landlords to the point where they are undergoing the financial equivalent of a prolapsed rectum. I try not to derive satisfaction from the misfortune of others but am prepared to make an exemption in this case.

 

We are blocking AirBnB renters at reception when we can - they may have spent hours on a flight and be looking forward to their holiday but I have NO sympathy as it is impossible they don't know people don't want ST lets in a condo that is their home. they don't care, and guess what, neither do I.

[ChipButty]

1 hour ago, mokwit said:

The increase in interest rates has gutted many AirBnB landlords to the point where they are undergoing the financial equivalent of a prolapsed rectum. I try not to derive satisfaction from the misfortune of others but am prepared to make an exemption in this case.

 

We are blocking AirBnB renters at reception when we can - they may have spent hours on a flight and be looking forward to their holiday but I have NO sympathy as it is impossible they don't know people don't want ST lets in a condo that is their home. they don't care, and guess what, neither do I.

A few of these guys with multiple units are going under I read about 2 today, one with 12 units the other one I think about 150 units, this is America, 

 

[ChipButty]

Notorious Airbnb Host Charged with Allegedly Running $8.5M Nationwide Scam

Shray Goel is charged with running an Airbnb scam across 100 U.S. properties.

https://www.vice.com/.../shray-goel-charged-airbnb-scam

[donx]

11 hours ago, jaideedave said:

You've just described my situation.The difference being they built a 5br Pool Villa next to us.These are called "small hotels" and are only allowed to Thai citizens.The lady who looks after the moo ban probably has it in her name and the real owners are Chinese.There are about 5-6 examples in the immediate area now. At a glance it looks legal. Our complaints about loud pool parties at 3 am to city hall(Pattaya) result in crickets.We've upgraded out adjoining wall/windows to the tune of 60k. It helps but thats all.

I am now reduced to childish revenge like a prolonged air horn blast at 0700 for their amusement.

FYI It's listed on Booking.com.I wonder if contacting them will bear any fruit?

Based upon your response, I believe the situation I outlined is legal since a townhouse is owned by a Thai. How else could it be owned other than by a Thai or a Thai LTD?

[donx]

14 hours ago, Peterw42 said:

Airbnb really only works in places like New York, Sydney etc, Where hotels are in short supply and they are expensive,

Otherwise, Thailand has 1,000s of great well priced hotels, completely legal, with all the usual facilities. There is literally no demand for Airbnb.

As for the OPs question, there is no margin at all.

To be competitive you would be renting for as low as 500 baht a night, and it costs 300 to have it cleaned, another 200 for fresh linen, 100 a day for elec, water, internet, condo fees etc. Wages for someone to meet and greet, and whatever cut Airbnb takes.

I dont know why this still gets discussed, its illegal, and there is no money to be made.

In my opinion, there are cases where an Airbnb rental could work in Thailand. For example, when a family of 8 needs a booking, getting multiple hotel rooms could be more expensive than renting a house that accommodates up to 8 guests.

 

I have a family of 5 and I often look for places to rent wherever we travel that can accommodate all of us in a single place. In Thailand, we often have to book 2 rooms which isn't too bad, but if we can get a place with 2 bedrooms, we prefer that option. Unfortunately, there aren't many hotels or serviced apartments in Thailand that have such an accommodation.

 

I have rented apartments in Rome, Paris, Tokyo, Kyoto, Brooklyn, etc. instead of hotel rooms because it was much more cost effective than booking hotel rooms.

[jaideedave]

14 hours ago, donx said:

Based upon your response, I believe the situation I outlined is legal since a townhouse is owned by a Thai. How else could it be owned other than by a Thai or a Thai LTD?

Agree it is owned by a Thai who is representing the Chinese couple by proxy for a fee.There are now half a dozen in this moo ban that have sprung up in the last 5 years.Similar to many farangs who have their houses etc. in a company name registered through their solicitor.One of many loopholes and workarounds prevalent here.Just about anything can be accomplished for a fee. Thats why we love living here. So in an reply yes, it's probably legal.  555

[PJ71]

On 1/3/2024 at 5:44 AM, JoseThailand said:

 

Like what?

ROI on most rentals people are happy with 6%.

 

You can get this at many banks now, no expense, no hassle, no work.

[JoseThailand]

23 hours ago, PJ71 said:

ROI on most rentals people are happy with 6%.

 

You can get this at many banks now, no expense, no hassle, no work.

 

In motorbike rental business ROI is 50-100%. Of course there are some expenses, but still it's so much better than the meager 6%

Edited January 6 by JoseThailand

[Bangkok Barry]

On 1/3/2024 at 12:09 PM, JoseThailand said:

In my opinion, there are much better options around the world (or even within South East Asia) to invest in the Airbnb business. For example, Vietnam, where Airbnb short-term rentals are more expensive than in Thailand, while property prices may be lower.

 

So why are you asking about Thailand, where you run the risk of losing the property or arrest, no matter how smart you think you are about finding ways around the rules so that you can run an illegal business?

[JoseThailand]

6 minutes ago, Bangkok Barry said:

 

So why are you asking about Thailand, where you run the risk of losing the property or arrest, no matter how smart you think you are about finding ways around the rules so that you can run an illegal business?

 

Because maybe someone would prove me that I'm wrong.

 

Btw, nobody's talking about losing the property or arrest, that's complete nonsense. My question was only about the financials.

[Peterphuket]

Have had 2 condos for rent through AIRBNB, both sold, and had no regrets.
All this whining...it's never good.

[Bangkok Barry]

5 minutes ago, JoseThailand said:

 

Because maybe someone would prove me that I'm wrong.

 

Btw, nobody's talking about losing the property or arrest, that's complete nonsense. My question was only about the financials.

 

You've clearly not dealt with Thai men in uniform and don't know what hey can do if they want to. Upset a VIP with noise from your place and the police might actually enforce the law. Long shot, but still risky. You would have absolutely no control over who rents your place and what they do there.

[sikishrory]

Short term condo rentals are not illegal if the condo has a hotel licence and lots do in tourist areas.

50sq rooms with this setup in Bangtao are going for 17,000 a night at the moment and I think were around 7 million to buy

[JoseThailand]

26 minutes ago, sikishrory said:

Short term condo rentals are not illegal if the condo has a hotel licence and lots do in tourist areas.

50sq rooms with this setup in Bangtao are going for 17,000 a night at the moment and I think were around 7 million to buy

 

That's a meager 3% ROI. Doesn't make sense.

[AustinRacing]

If you’re not sure what to invest in you’re advised not to invest in anything. 

[Freddy42OZ]

On 1/3/2024 at 12:49 PM, 1FinickyOne said:

yeah, I would like to know that too... my wife has done great w/buying farm land - - but.. no cash flow - the family farms it - but but but

 

I went to look at a house to possibly purchase - there were Air bnb customers there... it was a hot day - doors were wide open and a/c on full blast - the electric billl must have been enormous... 

 

If the regular monthly rental on the property is lets say 150,000 THB per month (5000 per day) then that same property will on airbnb for 15,000 per day. 

I wouldn't waste my time with airbnb  properties unless you are at the higher end of the market - 10K THB per day type properties.

[ChipButty]

18 hours ago, sikishrory said:

Short term condo rentals are not illegal if the condo has a hotel licence and lots do in tourist areas.

50sq rooms with this setup in Bangtao are going for 17,000 a night at the moment and I think were around 7 million to buy

Im not sure you are 100% correct, Yes the condo owners have a license, how many units did they sell to private investors? does their license cover them? only if they hand over the units to the condo management team, but if the private owners decide to airbnb will they be covered by that license, not sure,  

[newnative]

19 hours ago, sikishrory said:

Short term condo rentals are not illegal if the condo has a hotel licence and lots do in tourist areas.

50sq rooms with this setup in Bangtao are going for 17,000 a night at the moment and I think were around 7 million to buy

I might be wrong but I don't think a project legally registered at the Land Office as a 'condominium' can also be registered as a hotel.  

[ChipButty]

27 minutes ago, newnative said:

I might be wrong but I don't think a project legally registered at the Land Office as a 'condominium' can also be registered as a hotel.  

I think the information you have is wrong, I think the term used is "Condotel" There is one such project I know in Rawai and they have a hotel license I see their number quoted on their own web site and on other OTA's sites, they get a lot of business via booking.com, 

They did sell a lot of the units but I am not sure that license covers the private owners to do STR, 

Edited January 12 by ChipButty

[newnative]

3 hours ago, ChipButty said:

I think the information you have is wrong, I think the term used is "Condotel" There is one such project I know in Rawai and they have a hotel license I see their number quoted on their own web site and on other OTA's sites, they get a lot of business via booking.com, 

They did sell a lot of the units but I am not sure that license covers the private owners to do STR, 

    I agree there are 'condotel' type projects, which are set up differently from a project set up legally as a 'condominium'.  A project set up as a 'condominium', and which is legally registered as such at the Land Office, abides by the rules and regulations of the Thailand Condominium Act.  In order to legally rent for less than 30 days, a hotel license is required, which most legally registered condominiums do not have, and do not want to have.

[YaDongImproved]

The profitability of buying a condo for the purpose of renting it out on Airbnb or similar short-term rental platforms depends on various factors, including:

 

1. Location: Proximity to tourist attractions, public transportation, and amenities can significantly impact rental demand and pricing.
2. Property Quality: The condition, facilities, and overall appeal of the condo will affect your ability to attract guests and charge higher rates.
3. Market Conditions: The local real estate and rental market, including competition and seasonal fluctuations, will influence occupancy rates and profitability.
4. Regulatory Environment: Ensure that short-term rentals are allowed by the condominium's juristic person and that you are in compliance with Thai law. Some areas have restrictions on short-term rentals that could affect your ability to operate legally.
5. Operational Costs: Consider the costs of furnishing, maintenance, utilities, property management, cleaning, taxes, and condo fees when calculating profitability.
6. Marketing and Management: Your ability to effectively market the property and manage guest relations can also impact success.

It's important to conduct thorough research and comprehensive financial analysis considering these factors.

 

Learn about all the regulation of the hotel act, as it must be declared as a non-hotel and there are tax implications too.  I wrote an article on that. They recently modified the Hotel Act.

• Hotel Act Compliance: In Thailand, short-term rentals might fall under the Hotel Act. Ensure you comply with local laws which may require a hotel license. Even if you are not a hotel, you must register as a non-hotel. You must inform the Thai ministry of interior that the unit is not rented out as a hotel. The current law, modified in August 2023, mentions “in the case where the residential premises contain a number of not exceeding eight rooms on all floors in total, whether in single or several buildings and with a total service capacity of not more than 30 guests with the purpose to operate as a temporary accommodation for travelers or the other person, this would not be considered as a hotel.” This certification could take up to 40 days. You will need to provide:
  • (1) Identification cards of the notifier and the room owner.
  • (2) Power of attorney if the notifier does not go in person.
  • (3) Lease agreement.
  • (4) Title deed.
  • (5) Condo location map.
  • (6) Main income documents.

 

[treetops]

On 1/11/2024 at 7:17 AM, JoseThailand said:

That's a meager 3% ROI. Doesn't make sense.

 

Not if that's a nightly rate as the poster claimed.

[Beachcomber]

I had a really bad experience with Airbnb in Barcelona recently... Mismatched expectations, poor communication, and the place was nothing like the listing. 

 

I also came across some similar awful stories on https://www.mklibrary.com/what-happened-to-the-charm-of-airbnb/, where people shared their disappointing airbnb experiences.

 

It seems like while airbnb can be a hit or miss, other places in Southeast Asia might offer better ROI for short-term rentals, especially if you target higher-end markets. 

Edited July 25 by Beachcomber

[newnative]

1 hour ago, Beachcomber said:

I had a really bad experience with Airbnb in Barcelona recently... Mismatched expectations, poor communication, and the place was nothing like the listing. 

 

I also came across some similar awful stories on https://www.mklibrary.com/what-happened-to-the-charm-of-airbnb/, where people shared their disappointing airbnb experiences.

 

It seems like while airbnb can be a hit or miss, other places in Southeast Asia might offer better ROI for short-term rentals, especially if you target higher-end markets. 

       Short-term rentals of less than 30 days are illegal in Thailand so you are breaking the law to start with.  I don't see how you can make much money wth just one or two short-term rentals anyway.  To make any kind of meaningful profit, you would have to do all of the work yourself--listing and renting the units, keeping the rental schedule and the books, checking the renters in and out, checking for inventory losses and damage, restocking the units as needed, paying the monthly water, electric, and internet charges, washing the linens and cleaning the units after each rental, and being on hand to deal with any renter problems that come up.  

     Would I want to do all that?  Absolutely not.  I think illegal short-term rentals only make sense if you have enough units to justify hiring a staff to do all of the above for you.  Otherwise, you might be better off just having a long-term rental.  Long-term tenants insure that the unit is rented on a more stable basis, they are legal, and the tenant pays the electric, internet, and water charges.  You might actually end up with about the same in your pocket each month, with far less work and hassle, and likely far less wear and tear on your rental unit.  

[JoseThailand]

1 hour ago, newnative said:

Short-term rentals of less than 30 days are illegal in Thailand so you are breaking the law to start with.

 

Just make a contract for 30 days with the option for early termination. 

[ChipButty]

The way to go in Thailand if you have apartments/condo's for rent is Digital Nomads there is a couple of web sites out there targeting DN,