Renovation Pattaya Beach Resort

[12DrinkMore]

This is located on the Pattaya beach road somewhere around Soi 5 I believe.

Has anybody looked at investing here? They are selling or rather leasing the rooms on a ten year basis for 1.5m upwards. For the following ten years you can lease the room again at the original selling price plus 25%. Once the hotel starts up, the income, less management fees etc., is distributed to the room "owners". They are quoting an expected return of 25% or so. As, in my experience, there is always some reason why the advertised income rates are never achieved, if they can return 20% I would think it lucky. However, this means that it would take five years to recover the investment, and then the income from the next five years is really only returning around 10% when calculated over the whole ten years.

They say that there is no issue with foreign freehold, as the rooms are leased and not sold.

IMO they are looking to make a massive chunk of cash from the rennovation, and then cream off a huge income as management fees after that, over which the "owners" will have no control. And then, after another decade, they make another massive amount in re-leasing the rooms.

I have decided my money is safer in the bank at 6% risk, hassle and tax free.

[undercover]

This is located on the Pattaya beach road somewhere around Soi 5 I believe.

Has anybody looked at investing here? They are selling or rather leasing the rooms on a ten year basis for 1.5m upwards. For the following ten years you can lease the room again at the original selling price plus 25%. Once the hotel starts up, the income, less management fees etc., is distributed to the room "owners". They are quoting an expected return of 25% or so. As, in my experience, there is always some reason why the advertised income rates are never achieved, if they can return 20% I would think it lucky. However, this means that it would take five years to recover the investment, and then the income from the next five years is really only returning around 10% when calculated over the whole ten years.

They say that there is no issue with foreign freehold, as the rooms are leased and not sold.

IMO they are looking to make a massive chunk of cash from the rennovation, and then cream off a huge income as management fees after that, over which the "owners" will have no control. And then, after another decade, they make another massive amount in re-leasing the rooms.

I have decided my money is safer in the bank at 6% risk, hassle and tax free.

Yes, I agree with you, I was also thinking of (investing ?) there but have now decided to give it a miss

[Cabana]

Global interest rates are going south so to argue that you will get 6% ongoing is very optimistic (if these are pounds). Your return ongoing is likely to be much lower next year. This investment (which i am invested in) is of course subject to occupancy rates being maintained in the region of 70% and the management's expenses are kept to a reasonable level as per the budget. If you study the numbers you will understand the returns. There is a risk as in any business that the returns will be lower. However I have met the owners (from Norway and already developing here in Pattaya/well connected Thai) and my rationale is that money in the bank over the next few years will be a poor investment choice compared to a potential high return in this venture which seems well run and well supported. The building is almost on the beach in a great location and the renovation is about 65% complete the sea views cannot be obstructed for 20 years minimum without the managements agreement . It could be an investment or used as a condo unit with hotel facilities as required. With virtually a zero marketing spend the project is selling well because the outlay is quite small (1.5 million upwards). But of course money in the bank is safer (especially in Iceland)!

[plasticpig]

Global interest rates are going south so to argue that you will get 6% ongoing is very optimistic (if these are pounds). Your return ongoing is likely to be much lower next year. This investment (which i am invested in) is of course subject to occupancy rates being maintained in the region of 70% and the management's expenses are kept to a reasonable level as per the budget. If you study the numbers you will understand the returns. There is a risk as in any business that the returns will be lower. However I have met the owners (from Norway and already developing here in Pattaya/well connected Thai) and my rationale is that money in the bank over the next few years will be a poor investment choice compared to a potential high return in this venture which seems well run and well supported. The building is almost on the beach in a great location and the renovation is about 65% complete the sea views cannot be obstructed for 20 years minimum without the managements agreement . It could be an investment or used as a condo unit with hotel facilities as required. With virtually a zero marketing spend the project is selling well because the outlay is quite small (1.5 million upwards). But of course money in the bank is safer (especially in Iceland)!

[Cabana]

Global interest rates are going south so to argue that you will get 6% ongoing is very optimistic (if these are pounds). Your return ongoing is likely to be much lower next year. This investment (which i am invested in) is of course subject to occupancy rates being maintained in the region of 70% and the management's expenses are kept to a reasonable level as per the budget. If you study the numbers you will understand the returns. There is a risk as in any business that the returns will be lower. However I have met the owners (from Norway and already developing here in Pattaya/well connected Thai) and my rationale is that money in the bank over the next few years will be a poor investment choice compared to a potential high return in this venture which seems well run and well supported. The building is almost on the beach in a great location and the renovation is about 65% complete the sea views cannot be obstructed for 20 years minimum without the managements agreement . It could be an investment or used as a condo unit with hotel facilities as required. With virtually a zero marketing spend the project is selling well because the outlay is quite small (1.5 million upwards). But of course money in the bank is safer (especially in Iceland)!

What an intelligent posting. The expert on doner kebabs makes his observations - useful.

Edited November 1, 2008 by Cabana

[Hairy]

Global interest rates are going south so to argue that you will get 6% ongoing is very optimistic (if these are pounds). Your return ongoing is likely to be much lower next year.

Government rates are going down, but real rates are going up as those who actually have cash refuse to lend it without sufficiently high interest to cover the risk of default.

[Cabana]

Global interest rates are going south so to argue that you will get 6% ongoing is very optimistic (if these are pounds). Your return ongoing is likely to be much lower next year.

Government rates are going down, but real rates are going up as those who actually have cash refuse to lend it without sufficiently high interest to cover the risk of default.

Since i am not a bank nor a money lender i cant see how i would benefit from this strategy. I think most investors agree that going forward cash is not king unless your able to make it work for you in some business or investment capacity (or the riskier but possible lucrative investment in stocks at current levels). Before someone comments this is off post i dont think it is since the original poster was debating the merits of a bank deposit account versus property/hotel investment.

[Cabana]

to all the nay-sayers............this hotel/condo opens mid July. Lobby finished its about 95% done. Go see for yourself. Promise is no fees for bringing guests in.

[KASABIAN]

to all the nay-sayers............this hotel/condo opens mid July. Lobby finished its about 95% done. Go see for yourself. Promise is no fees for bringing guests in.

I had a quick butchers inside yesterday after visiting Subway and its very nice inside. It's bookmarked for friends and family visiting me, I think they will be pleased when they arrive, I would!

[irish1]

Global interest rates are going south so to argue that you will get 6% ongoing is very optimistic (if these are pounds). Your return ongoing is likely to be much lower next year. This investment (which i am invested in) is of course subject to occupancy rates being maintained in the region of 70% and the management's expenses are kept to a reasonable level as per the budget. If you study the numbers you will understand the returns. There is a risk as in any business that the returns will be lower. However I have met the owners (from Norway and already developing here in Pattaya/well connected Thai) and my rationale is that money in the bank over the next few years will be a poor investment choice compared to a potential high return in this venture which seems well run and well supported. The building is almost on the beach in a great location and the renovation is about 65% complete the sea views cannot be obstructed for 20 years minimum without the managements agreement . It could be an investment or used as a condo unit with hotel facilities as required. With virtually a zero marketing spend the project is selling well because the outlay is quite small (1.5 million upwards). But of course money in the bank is safer (especially in Iceland)!

[irish1]

THIS RESORT IS NOW OPEN FOR BUSINESS ALTHOUGH THE RENOVATIONSARE NOT YET COMPLETE . THE ROOMS ARE NICELY APPOINTED & COMFORTABLE . THE POOL AREA IS BEAUTIFUL WITH A SWIM UP BAR IN THE POOL !! WHEN THIS RESORT IS COMPLETE I'M SURE IT WILL BE VERY POPULAR WITH TOURISTS !!

[Cabana]

yes its been finished for a while a few teething problems as u would expect but the lobby is exceptional and very quiet in the rooms at night unlike other comparable hotels charging 1500/2500 per night. just need more visitors to learn about it.

THIS RESORT IS NOW OPEN FOR BUSINESS ALTHOUGH THE RENOVATIONSARE NOT YET COMPLETE . THE ROOMS ARE NICELY APPOINTED & COMFORTABLE . THE POOL AREA IS BEAUTIFUL WITH A SWIM UP BAR IN THE POOL !! WHEN THIS RESORT IS COMPLETE I'M SURE IT WILL BE VERY POPULAR WITH TOURISTS !!

[Cabana]

PS its an awesome position right next to soi 6 (ie 3 mins to walking street by taxi, or walk) the front of the hotel is facing to the sea so excellent views, just a view small restaurants in between the sea and the hotel (these are owned by the leaseholder).

yes its been finished for a while a few teething problems as u would expect but the lobby is exceptional and very quiet in the rooms at night unlike other comparable hotels charging 1500/2500 per night. just need more visitors to learn about it.

THIS RESORT IS NOW OPEN FOR BUSINESS ALTHOUGH THE RENOVATIONSARE NOT YET COMPLETE . THE ROOMS ARE NICELY APPOINTED & COMFORTABLE . THE POOL AREA IS BEAUTIFUL WITH A SWIM UP BAR IN THE POOL !! WHEN THIS RESORT IS COMPLETE I'M SURE IT WILL BE VERY POPULAR WITH TOURISTS !!