Buying a condo as a long term rental

[mrblonde]

My plan is to move out to Thailand permanently within the next 4 years, I’m currently 46.  I did have a buy to let flat in the U.K. (in South East) for a few years but the combination of increasing interest rates and the government targeting landlords I chose to sell up.
The way non-paying tenants are so protected in the U.K. was also a genuine concern.

I’m considering buying a couple of condos in Pattaya (outright) to rent out long term.  ROI am looking at 8% in most cases.  
When I move out to Thailand, I’ll move into one of them. 
With the way the West seems to be going, I’d imagine more people wanting to head East as they near retirement, keeping property prices stable (at worst).

 

I’ve seen other posts on here advising the stock market for an income but I have a SIPP and do not want all my future income (my Thailand retirement fund) tied to a potentially turbulent market.
 

are there any things to consider?  Anything to avoid?  

 

[DrJack54]

20 minutes ago, mrblonde said:

Anything to avoid?

Crazy idea. 

[Skipalongcassidy]

23 minutes ago, mrblonde said:

My plan is to move out to Thailand permanently within the next 4 years, I’m currently 46.  I did have a buy to let flat in the U.K. (in South East) for a few years but the combination of increasing interest rates and the government targeting landlords I chose to sell up.
The way non-paying tenants are so protected in the U.K. was also a genuine concern.

I’m considering buying a couple of condos in Pattaya (outright) to rent out long term.  ROI am looking at 8% in most cases.  
When I move out to Thailand, I’ll move into one of them. 
With the way the West seems to be going, I’d imagine more people wanting to head East as they near retirement, keeping property prices stable (at worst).

 

I’ve seen other posts on here advising the stock market for an income but I have a SIPP and do not want all my future income (my Thailand retirement fund) tied to a potentially turbulent market.
 

are there any things to consider?  Anything to avoid?  

 

Yeah... AVOID the british and canadian renters... they don't pay up over here either.

[AlexRich]

Personally, I wouldn't do that. Tenants are a pain to deal with and you may not get decent ones. Thais also like to buy new condos so it might not be as easy to sell if you choose to. You might end up with a property you can't get rid of, or a development that is not well maintained. 

 

If you are investing long term then tracker funds are a good option, although they will fluctuate year to year. A medium term bond will provide a guaranteed income and return of capital on expiry. A combination of both might serve your objectives more. If you rent in Thailand you have the option of upping and moving sticks whenever you feel like it. 

[SAFETY FIRST]

37 minutes ago, mrblonde said:

any things to consider

City Garden on the Avenue Pattaya was always a high achiever an investment opportunity, had a professional management company, huge growth and rental return, not sure what it's achieving these days. 

 

The problem for landlord these days is Airbnb, it's toxic. 

 

Location, location, location. 

 

Edited January 5 by SAFETY FIRST

[scubascuba3]

If you carefully select the condos that are popular then you have a chance to rent it out often. In UK it's easy to find tenants as there is a housing shortage, in Thailand it's flooded with way too many condos, in Pattaya would be lucky if 50% occupied

[ChaiyaTH]

Better off buying bitcoin from it, you will become rich in a few years from it too.

[JimTripper]

Does managing/renting property require a work permit?

Edited January 6 by JimTripper

[OneMoreFarang]

2 hours ago, mrblonde said:

I’m considering buying a couple of condos in Pattaya (outright) to rent out long term.

How much do you know about Thailand and Thailand's property market?

Don't assume it's like in the UK or anywhere else.

 

I lived for a long time in one condominium. In the hindsight it would have made sense that I bought it. 

Now I bought another condominium in the same building and I plan to live there for the future. I know the building and the neighbors and the neighborhood, etc. There won't be any big surprises for me.

 

It seems you don't live in Thailand. Who will take care of your property? Can you trust these people or companies? Will they take care? Will they do what they say? Will they "forget" things or charge you for things which never happen?

There are lots of empty places for rent in Thailand, and for months not even one person is interested.

 

Summary: It's difficult. And it might not be profitable. Overall, far away from a profitable reliable investment. 

[Peterw42]

41 minutes ago, scubascuba3 said:

If you carefully select the condos that are popular then you have a chance to rent it out often. In UK it's easy to find tenants as there is a housing shortage, in Thailand it's flooded with way too many condos, in Pattaya would be lucky if 50% occupied

Not every condo in Pattaya is a rental property looking for a tenant. Thais own condos and just leave them empty, foreigners own and use them for 2 months a year on holidays. Most of the time people have no idea about the status and occupancy of a condo block, just want to push the tired old narrative.

[Peterw42]

6 minutes ago, ChaiyaTH said:

Better off buying bitcoin from it, you will become rich in a few years from it too.

What is the rental return on bitcoin ?

[ezzra]

The real estate market in Thailand is very quiet now with not many buyers around since the Chinese

are taking a hiatus from property buying in Thailand, so you should find many good bargains, and as renting

them out for an income that might be a bit tricky right now, again depends on the location and rental fee,

if you can buy now and not worry if you can't rent them out do so, otherwise, do your homework carefully...

[Henryford]

I doubt you would get 8% ROI. Just guessing you pay 3 million baht. Rent for 12,000 a month. By the time you have paid common fees etc and adjust for unoccupied periods you might only net 100,000 income a year - 3%, with no capital appreciation. Rents are cheap here.

Edited January 6 by Henryford

[scubascuba3]

2 minutes ago, Henryford said:

I doubt you would get 8% ROI. Just guessing you pay 3 million baht. Rent for 12,000 a month. By the time you have paid common fees etc and adjust for unoccupied periods you might only net 100,000 income a year - 3%. Rents are cheap here.

Sounds about right, bank interest rate back home UK 6%

[newnative]

       You will get negative posts telling you to rent, not buy, in Thailand because it will be a terrible investment and you will lose your shirt, and likely your pants, as well.  This has not been the experience of my spouse and me through a number of property purchases and sales, mostly condos.  

       Your plan is actually what a number of Thais do, including two of my Thai spouse's relatives, both in banking.  When they retire, required at age 60 where they work, they receive a lump sum payment, rather than a pension, that has to last them for the rest of their lives, whether they live to 70 or 100. 

       In order to make that lump sum last longer, they have bought rental condos to provide some income.  If they can get, say, 30,000 baht a month in rental income, that's 30,000 baht that they don't need to withdraw from that lump sum each month.  They have been buying the condos while they are still employed and they each own one or two.

       We actually owned three Pattaya rental one-bedroom condos at various times, at Lumpini Park Beach, The Base, and Centric Sea.  Had I not had a pension and SS, we might still own them.  Ultimately, we opted for a quick profit selling them, after renting each for a year, rather than a slower, monthly return.  I can't remember the LPB rental but with the Base, we got 25,000 baht a month and Centric Sea was 22,000--this was when both projects first opened, a number of years ago. The Base cost us 3MB and Centric Sea was 2.5MB.

       No advice on specific projects to buy but all our Pattaya condos were seaview units, which were not difficult to sell at a profit, when we decided to sell.  I would say always buy in foreign quota, don't be in a hurry, and do your homework.  Hipflat is an easy to use website that can give you useful information on condo rental and sale prices for Pattaya condo projects, with units listed for sale and rent, so you can get some idea regarding pricing for both sales and rentals.  I think the north Pattaya beach area is getting very desirable and there are only a handful of seaview condo projects--Northshore, Centric Sea, and Markland come to mind, so not much competition for seaview rentals in that area.  Good luck.

       

[treetops]

To save everyone repeating themselves, have a look at this thread which was just started a few days.  Apart from the odd outlier the resounding answer is no - don't do it, with lots of valid reasons why not.

 

https://aseannow.com/topic/1316003-buy-a-condo-to-airbnb-is-it-really-profitable/

 

[Celsius]

What a stupid idea.

 

I am canadian and naver had trouble renting out my condo in canada even with all the government meddling. Every time people literally line up and I can pick and choose the best tenants.

 

My wife sold her rental after 11 years recently at 30% loss (including agent fees and tax) even tho the BTS station was built next to the project. I guess she broke even with 11 years of rent.

[worgeordie]

Only as a last resort ,you would be buying a headache ,and the

problem is property prices are high in comparison, rents cheap,

and there is an  oversupply of rental properties.

 

regards worgeordie

[Celsius]

Just checked view talay 6 out of curiosity.

 

4mil baht condos being rented for 10,000b a month.

 

How much are condo fees in these units?

 

 

[newnative]

1 hour ago, treetops said:

To save everyone repeating themselves, have a look at this thread which was just started a few days.  Apart from the odd outlier the resounding answer is no - don't do it, with lots of valid reasons why not.

 

https://aseannow.com/topic/1316003-buy-a-condo-to-airbnb-is-it-really-profitable/

 

     Except, that thread was discussing short-term rentals.  I believe the OP is planning to do long-term rentals--something different.  I would say a hard no to short-term rentals, from a financial point, especially with just one or two condos.  And, also because they are illegal.  Long-term rentals I find a much more viable proposition, and have done them myself.

[scubascuba3]

1 hour ago, Celsius said:

Just checked view talay 6 out of curiosity.

 

4mil baht condos being rented for 10,000b a month.

 

How much are condo fees in these units?

 

 

Those VT6 48m studios are usually around 15k a month, common fees are low hence why they can't afford new lifts, about 500 baht a month. If it's a low floor and or facing Central festival and ACs maybe 10k is possible

Edited January 6 by scubascuba3

[treetops]

7 minutes ago, newnative said:

     Except, that thread was discussing short-term rentals.  I believe the OP is planning to do long-term rentals--something different.  I would say a hard no to short-term rentals, from a financial point, especially with just one or two condos.  And, also because they are illegal.  Long-term rentals I find a much more viable proposition, and have done them myself.

I appreciate the distinction but the only difference in most cases is it goes from a lousy idea to a really lousy idea IMO.

Edited January 6 by treetops

[ignore it]

Yep.

 

I know a guy who did the same thing.

He left Thailand with US$500k

 

He came with $1 million.

[newnative]

1 hour ago, Celsius said:

Just checked view talay 6 out of curiosity.

 

4mil baht condos being rented for 10,000b a month.

 

How much are condo fees in these units?

 

 

    The cheapest studio on Hipflat is a floor 8 unit for 18,000 baht.  Some others are listed from 22,000 to 26,000 baht a month.  An 8th floor unit is listed for sale at 3.7MB.  I did not see any VT6 studios on Facebook for 10,000 baht, either.  There was one listed for 28,000 baht.

    

[shdmn]

I like Markland a lot and will second what someone else said, there seems to be an undersupply of beach view condos there in N. Pattaya. It's a nicer area with higher-end hotels and more well-to-do looking farangs around.  Only thing I don't like about Markland is the slow elevators.  Not a lot of condos for sale/rent in there.  That other one nearby called NorthShore is much newer/nicer but also a lot more expensive.

Edited January 6 by shdmn

[Drumbuie]

These forums are not really the best place for research, as the advice you'll get will range from 0-100% accuracy, with sporadic outbreaks of sarcasm, random insults and outright lunacy. 

 

 

 

[JeffersLos]

4 hours ago, scubascuba3 said:

bank interest rate back home UK 6%

 

Which UK bank is paying 6%?

 

Thanks. 

Edited January 6 by JeffersLos
typo

[JeffersLos]

8 hours ago, AlexRich said:

A medium term bond will provide a guaranteed income and return of capital on expiry.

 

Please go into more detail, with specific bonds. Thanks. 

[JeffersLos]

If you decide to do this, my advice would be to make a parttime job of it.

 

Buy 4 or 5 smaller and cheaper units in good downtown locations, or near large universities etc, that are empty and need renovating, rather than 1 or 2 expensive one that have 3 bedrooms.

Renovating is cheap here. A fresh coat of paint and new modern lighting doubles the price, as they say. 

Focus on different markets. 

Be on hand and stay on top of what's happening in each, not just getting a rental agent to take over etc.

 

[scubascuba3]

1 hour ago, JeffersLos said:

 

Which UK bank is paying 6%?

 

Thanks. 

i have a Santander account paying 5.6%, Coventry has one with 7%, have a search see what you can find