Rule Of Thumb For Charging Rent...

[buddhafly]

of course nothing is set in stone, and subject to negotiation and market conditions, location, quality, furnishing, etc, but what is the rule of thumb for amount to rent a condo out?

is there a common price per sq. meter?

esp. for a superior condo in a good location...

and secondly does it tend to rise over the years? at a certian percentage?

[Moonfruit]

It basically depends on what the market dictates. Also, as most units here are leased furnished (furnished or unfurnished only varies the monthly rental amount by around 10%) it depends on the quality of furnishing.

I live in rented accomodation. The guy who lives in the same unit as myself next door pays over 20% more than I do, however, his unit is finished to a much higher standard than mine. They both cost the same amount to buy. They both cost the same amount to fit out. However, his is much better quality than mine.

It suits me as i dont own the place, but if you did own my place you would not be too happy.

[londonthai]

I do charge, which works out, minimum 100baht/2m/month - not much, but I do prefer to be occupied than empty

[buddhafly]

irene, anyone else?

[ProThaiExpat]

In the U.S. we are used to the 1% rule, that much per month in rent based on the sale value of the property.

Thailand is amazing in that rents are relatively cheap when the value of the property is taken into consideration. 12 Million house with 40 rai of land renting for 15k a month.

No property taxes may be one reason owners can rent cheap hoping to make it up on the appreciation in re-sale value. Those with plenty of money, perhaps, don't look for income as opposed to appreciation.

[quiksilva]

I reckon about 6-8% ROI is about right here, but it all depends on the actual property.

Figure average THB 500-600 / sqm / month for grade A condo's. (serviced apartments make 1000 / sqm / mth)

[LivinLOS]

My old rented villa was 70k per month on a 28 million baht for sale property.. why anyone would do that I dont know.

In the UK 5% per annum is much more normal than 12%..

[thaigene2]

In the U.S. we are used to the 1% rule, that much per month in rent based on the sale value of the property.

Thailand is amazing in that rents are relatively cheap when the value of the property is taken into consideration. 12 Million house with 40 rai of land renting for 15k a month.

No property taxes may be one reason owners can rent cheap hoping to make it up on the appreciation in re-sale value. Those with plenty of money, perhaps, don't look for income as opposed to appreciation.

Yes, renting a house is much better value than renting a condo (metre-for-metre) in Bangkok, anyway. You can find thee bedroom houses in central part of the city (though not Sukhumvit) for around 20,000 - 40,000, older is cheaper end of the scale of course.

But the OP is asking about condo prices - I've sen good-value condos in smaller family run places (2 bdrm 3 AC, 2 baths) in the Rama 6/Phadiphat (near aree/saphan kwai) for only 15,000 Baht per month. While smallish 2 bdrm condos (65-70 mtrs) in newer places closer to the BTS (Aree/Sanam Pao) are asking 45,000 baht per month. In mid-Suk the prices tend to be 50% - 100% more, which I've never understood - and never lived in.

[PeaceBlondie]

Like ProThaiExpat, the American rule of thumb was a monthly gross rent equal to 1% of the appraised value of the property, condo or house. I once bought a very old, shabbily furnished triplex in a near-slum, that was easily collecting 5% A MONTH of what I bought it for! So, imagine my joy to arrive in Thailand and rent a nice sixth-floor condo with 85 square meters for 6500 baht, when similar units sold for 1.5 million baht!

ROI sometimes includes appreciation, does it not? So, at about 5 or 6% per year of the condo's value being collected in gross rents, you had best hope for some fantastic Apreciation, after allowing for nonpayment of rent, repairs, etc.

[rgs2001uk]

My old rented villa was 70k per month on a 28 million baht for sale property.. why anyone would do that I dont know.

In the UK 5% per annum is much more normal than 12%..

i get that a week on a property that cost less in the uk, and people ask me why i dont invest in thailand, duuuh , guess i must be missing something.

[cclub75]

i get that a week on a property that cost less in the uk, and people ask me why i dont invest in thailand, duuuh , guess i must be missing something.

Indeed.

;-)

You could say though that many landlords in BKK... do not pay taxes (more difficult to escape the tax man in the UK for instance).

It's interesting to see that people, I guess everyone, is so surprised by the huge gap between rent and "value" at sale in BKK.

It's just another proof that the market is... not healthy.

In Paris, when you put something, anything, even a shoebox to rent... you have line, queue of people to visit. It's painfull then, because you need to choose. People are lazy and scared (in France, contrary to UK, landlords have less protection) so they like civil servants (who can't be fired) and ask for huge collateral for other. etc. It's insane. Anyway.

This is real demand at work !

London, Paris... those cities are museum-like. Difficult, even impossible to build a condo of 30 storeys. Land scarcity, very rigid rules (too rigid probably), the cocktail is powerfull.

In Bangkok, we have such large space (think about all those little houses, in the sois, ready to be destroyed), and such a lack of rules...

Rent are very low in BKK (or sale price are very high relative to rent if you prefer....) because the offer overweight the demand. Big time. It's Economy 101.

So, actually, when you think about it, the only boost perspective for the condos market in BKK is the common belief that prices have only one way to go : up.

Which is perfectly stupid from an economic point of view. Even in Asia.

So to buy to rent, and to get in return 5 %... and if you don't really believe the motto "the-price-of-my-condo-will-double-in-10-years-sure" I mean what's the point ?

People should put the cash on a time deposit ! The return is higher.

The only real good deal, the real value, with 0 % odd of failure, in Bangkok is... land of course.

And this is precisely why foreigners are kept away from it. And that a certain powerfull thai family owns a lot of it.

Edited February 24, 2008 by cclub75

[realmadrid25]

please understand a few things about real estate in thailand:

its a passive investment for many. unlike the west were real estate investors are leveraged and looking to create income streams, here they just want to beat the 3% they get in a bank.

if you buy a place that upkeeps itself, than you can expect the properties value to appreciate. if the building is not upkept than the property's appreciation will grow much slowly and even depreciate at times. all over sukhumit and silom you can find condos which sell for 50k/m2 or less in buildings which are run down. perhaps this is a good investment to buy renovate and live long term but farang generally do not want to rent in these buildings, they like they new buildings.

the thing to remember about investing in a condo in thailand as a rental is that its hard to sell. so as long as you dont mind getting paid back your investment over 15 years, its going to be a good investment. if you want to sell in 5 years then pick something brand new in a top location that people will want to buy.

of course, its probably unlikely that your bangkok condo will return more than the Chinese and Indian index funds over the next 20 years.

Buy to live long term, not as an investment is my honest advice.

[realmadrid25]

i agree. there really is plenty of room in bangkok when you consider all those little houses waiting to be destroyed, but look at sois like lang suan or sukhumwit 24 and there is no more room left.

location location location

those projects that people are buying out on ratchada - I think are terrible. Some are charging 80k+/m2 and there is an absolute ton of room to build up. Nobody will want to buy one of those in five years when there are five new projects going up next to it.

[LivinLOS]

My old rented villa was 70k per month on a 28 million baht for sale property.. why anyone would do that I dont know.

In the UK 5% per annum is much more normal than 12%..

i get that a week on a property that cost less in the uk, and people ask me why i dont invest in thailand, duuuh , guess i must be missing something.

I am looking for a new home with a pool..

Just looked at one over the weekend.. 15m for sale.. I think after haggling it will be 35 - 45k rent depending on who does what with pool and stuff..