Rent Ratio In Bangkok?

[FarangNoi21]

how much does a 6 million baht condo rent for a month in bangkok?

[fletchsmile]

Realy is going to vary depending on a lot of factors. Would probably help people give you a better idea if you give more details. As a ball park guess: 5-8%. So 25k to 40k per month. Rental yields for owners in Thailand aren't that great, but again it's all relative.

[jumnien]

We sold our 84 sq meter leasehold condo for 4.4 million baht a few months ago. I'm sure the new Thai owners will rent it out for 35,000 baht or more very easily.

[FarangNoi21]

We sold our 84 sq meter leasehold condo for 4.4 million baht a few months ago. I'm sure the new Thai owners will rent it out for 35,000 baht or more very easily.

where? are similar houses being rented at that rate?

[jumnien]

Rajadamri, Soi Mahadlek luang 1, Royal Regent 1

Yes, that's the going rate - popular area...

[londonthai]

As a ball park guess: 5-8%. So 25k to 40k per month.

rather 0.5 - 0.8%

[xyborg]

Depends what it is and where it is and who its aimed at and what service and fitments you are offering + buying off plan. I am getting 13% thanks very much.

[fletchsmile]

As a ball park guess: 5-8%. So 25k to 40k per month.

rather 0.5 - 0.8%

For yields, it's more common to talk about per annum, for most assets. Hence 5%-8% were p.a. yields. Rents on the other hand are usually quoted monthly. So 5%-8% p.a. equates to 25k to 40k per month. Sorry if wasn't clear

[london]

Fletchthai68 is 100% correct. That range pretty well covers everything that I have seen recently.

However, remember that these are GROSS rents, not NETT. From them, if you are the owner, you would need to deduct CAM (Common Area Maintenance) fees, and that can easily take 1 months rental income....in some places more.

[FarangNoi21]

anyone know what the appreciate (and then depreciation) is for a condo?

[Heng]

It all depends. But you're right, unlike land... condos eventually return to zero*. It's in most cases an inevitability, it's just a question of whether it's 50 or 200+ years from now.

*not an issue of course if you're sterile or don't intend to leave that particular part of your holdings for the next generation of your family

Edited September 30, 2007 by Heng

[ThaidleHands]

The "100 month rule" is usually in the ballpark. Divide the sale price by 100 to get a typical monthy rent. Or multiply the monthly rent by 100 to estimate the sale price.

[quiksilva]

Fletchthai68 is 100% correct. That range pretty well covers everything that I have seen recently.

However, remember that these are GROSS rents, not NETT. From them, if you are the owner, you would need to deduct CAM (Common Area Maintenance) fees, and that can easily take 1 months rental income....in some places more.

Seconded. Listen to these guys.

Also figure 2-3% pa for depreciation, less if well maintained.

Likely annual capital value appreciation estimates is a much harder call and will be dependent upon a lot of factors but location, quality and management are the most notable. It could be 0-5% p.a. (with the weighting much more towards the lower end of the scale, very few condo's appreciate all that much after the initial launch period, some will though.)

Edited October 1, 2007 by quiksilva

[Smithson]

They're also the chance you may have trouble getting tenants.

[Firefan]

Hmmm... no appreciation but rather depreciation on condos in BKK?

I think many will disagree with that. Used condo prices have been increasing a lot in the last several years, and while they seem to have stabilized currently, and maybe even corrected downwards lately, it comes after a long run-up in prices - leading to increased capacity from new buildin. Quite natural and healthly to have a correction.

Also. against the general info here ("Thais only want to buy new")many younger Thais do not just want to buy new, and they wish to live near work/in city center, just like we see it in Western countries.

Cheers!

[jumnien]

It doesn't matter what time period you pick - 5 years, 10 years, 20 years or 30 years - most Bangkok condos have appreciated.

[quiksilva]

I'd be very wary of using the word 'most' in this context.

Many buildings have less than acceptable maintenance standards and many still have poor financial management and do not have ongoing, pro-active common area rejuvenation plans.

All of this is necessary to see any capital appreciation at all, and unfortunately not all condo's are managed equally.

Example, look at President Park on Sukhumvit Soi 24, the property is over 10 years old, was billed as being luxury grade A when it first entered the market and has been managed since day one by an international firm. Yet, values here have barely seen any appreciation at all. It has almost all of the above, however it is let down by the original build quality and

If however, you are buying units, for refurbishment and flipping then you can expect to make reasonable gains, IF you know what you are doing.

Expecting any condo you buy to 'magically' appreciate, could turn out to be an expensive assumption, unless you do your homework first.

[think_too_mut]

It all depends. But you're right, unlike land... condos eventually return to zero*. It's in most cases an inevitability, it's just a question of whether it's 50 or 200+ years from now.

*not an issue of course if you're sterile or don't intend to leave that particular part of your holdings for the next generation of your family

About 10 condos in the areas I am interested in had pics from their balconies. There were no buildings in sight, the buildings erected over last 5 years.

The condos are still sitting dormant, 5 years +, some even have "near the highway to Don Muang, BKK International airport".

[Phrakhanong]

ThaidleHands refers to the 100 month rule... is this correct? If we are talking 5-8%, with a ballpark of 25k to 40k for a 6 million condo, then really it seems more like the 200 month rule... ie 6 million divided by 200 months equals 30k rent per month.

The west is usually more aggressive on rent and the 100 month rule seems a bit more applicable. If the 200 month rule is correct, that suggests property is not a great investment in Thailand as it doesn't generate much income... plus from what everyone is saying, it doesn't appreciate a whole lot from year to year either.

Is the rent ratio the same for houses, townhouses and condos in Bangkok?

[fletchsmile]

ThaidleHands refers to the 100 month rule... is this correct? If we are talking 5-8%, with a ballpark of 25k to 40k for a 6 million condo, then really it seems more like the 200 month rule... ie 6 million divided by 200 months equals 30k rent per month.

The west is usually more aggressive on rent and the 100 month rule seems a bit more applicable. If the 200 month rule is correct, that suggests property is not a great investment in Thailand as it doesn't generate much income... plus from what everyone is saying, it doesn't appreciate a whole lot from year to year either.

Is the rent ratio the same for houses, townhouses and condos in Bangkok?

Personally I think the 100 month rule of thumb is a bit optimistic for your average property in BKK. That implies simple 12% p.a. yield. It's a simple guideline for people to use to get a quick idea, but I'd prefer to then discount/adjust it. That said there will always be exceptions: 5-8% is I think main range as a guideline, but some will be lower, some higher.

I haven't seen very many 6mio properties renting for 60k a month. Tho there are always exceptions. For 60k a month I'd personally want something better than what 6mio could buy if paying out of my own pocket.

Edited October 3, 2007 by fletchthai68

[quiksilva]

ThaidleHands refers to the 100 month rule... is this correct? If we are talking 5-8%, with a ballpark of 25k to 40k for a 6 million condo, then really it seems more like the 200 month rule... ie 6 million divided by 200 months equals 30k rent per month.

The west is usually more aggressive on rent and the 100 month rule seems a bit more applicable. If the 200 month rule is correct, that suggests property is not a great investment in Thailand as it doesn't generate much income... plus from what everyone is saying, it doesn't appreciate a whole lot from year to year either.

Is the rent ratio the same for houses, townhouses and condos in Bangkok?

Personally I think the 100 month rule of thumb is a bit optimistic for your average property in BKK. That implies simple 12% p.a. yield. It's a simple guideline for people to use to get a quick idea, but I'd prefer to then discount/adjust it. That said there will always be exceptions: 5-8% is I think main range as a guideline, but some will be lower, some higher.

I haven't seen very many 6mio properties renting for 60k a month. Tho there are always exceptions. For 60k a month I'd personally want something better than what 6mio could buy if paying out of my own pocket.

Agreed.

[Moonfruit]

ThaidleHands refers to the 100 month rule... is this correct? If we are talking 5-8%, with a ballpark of 25k to 40k for a 6 million condo, then really it seems more like the 200 month rule... ie 6 million divided by 200 months equals 30k rent per month.

The west is usually more aggressive on rent and the 100 month rule seems a bit more applicable. If the 200 month rule is correct, that suggests property is not a great investment in Thailand as it doesn't generate much income... plus from what everyone is saying, it doesn't appreciate a whole lot from year to year either.

Is the rent ratio the same for houses, townhouses and condos in Bangkok?

Bingo

[Khun Jean]

I must do something wrong then.

But i see many 'investors' make this same mistake.

Buy 1 condominium for 6.000.000 baht. Or buy 20 for 300.000 baht.

Guess which strategy gives the best ROI. And i can tell you it is a lot better than then rule of '100'. And you have the whole local population as potential tenants, not only the few foreigners that can pay the high prices.

The point is you don't buy something flashy to show your family and friends, you better buy something with a good return.

[fletchsmile]

I must do something wrong then.

But i see many 'investors' make this same mistake.

Buy 1 condominium for 6.000.000 baht. Or buy 20 for 300.000 baht.

Guess which strategy gives the best ROI. And i can tell you it is a lot better than then rule of '100'. And you have the whole local population as potential tenants, not only the few foreigners that can pay the high prices.

The point is you don't buy something flashy to show your family and friends, you better buy something with a good return.

Think you misunderstood the thread. The question is about how much does 1 condo for 6mio rent for. The OP also didn't mention investment.

Your question of whether 1 condo worth 6mio is a better investment than 20 @ 300,000 is an interesting one though. Personally I wouldn't be so interested in the ROI. I wouldn't want the hassle of renting 20 cheap condos, even for a 10% return net. I wouldn't want to have to deal with Thais paying THB 2,500 a month rent. There's likely to be all sorts of hassles. Also you would really need to be talking risk adjusted return on investment RAROI, rather than simply ROI. I'd rather have a single good quality tenant, even for a lower yield.

Extending further, I wouldn't want to be investing in property in Thailand for rental income, anyway. The point is rental income from Thai properties is not currently a good risk adjusted return in my view. As the threads above highlight, returns are poor. There are also quite a lot of risks and hassles. Now if I used to live in a property and wanted to move and rent it out, that might be different. If you're talking alternative investmnets, one Thai example I'd rate higher would be investing in Thai equities via a mutual fund route. Much more liquid than property, less risk, and higher returns over last few years. Since 2000 such funds have been yielding >20% pa. But if you really want to talk investment as a foreigner there are a lot more options....

Edited October 5, 2007 by fletchthai68

[thaigene2]

I wouldn't want to be investing in property in Thailand for rental income, anyway. The point is rental income from Thai properties is not currently a good risk adjusted return in my view. As the threads above highlight, returns are poor. There are also quite a lot of risks and hassles..... if you really want to talk investment as a foreigner there are a lot more options....

Yes very true. Besides, as many will have noticed, middle-class Thais have been snapping up all these 30-80 sq m. new condos in order to 'rent' them out. To whom, I'm not sure...but they truly think that an increasing rental market exists in Bangkok at least. It's pretty obvious to me anyway that there has been a real surge in available rental units.

It's a good thing for renters of course because it means more competition and downward pressure on rents.

But I've never been able to understand why renting an average apartment is more expensive than renting an average house in Bangkok (metre for metre). I guess people like the added security and a swimming pool...

I just don't know why someone would spend 40,000 baht per month for 80 sq m two-room box when they could rent a house (for less) with a fenced in garden in a central location of Bangkok (perhaps not the newest or trendiest). To each his own.

But the good news is the more they build the more selection we have.