What Percentage Is The Return Of Renting Your Property Out Here

[TheDon]

WHat do you think is the return as above. Also probably depends where.

[poshthai]

I would guess this only,but based on rentals and costs of properties i would suggest that 10% per annum would be a starting point.

so a house bought for 2000,000 baht would fetch an annual rental of 200,000 baht a year= 6,000 a month.This is only a guide line as some older property would only fetch about 6-7%.

Hope its of interest for you don

[steveromagnino]

I would guess this only,but based on rentals and costs of properties i would suggest that 10% per annum would be a starting point.

so a house bought for 2000,000 baht would fetch an annual rental of 200,000 baht a year= 6,000 a month.This is only a guide line as some older property would only fetch about 6-7%.

Hope its of interest for you don

10% is overstating the case; mostly the rental is lower than that; ends up around the 6-7% point.

200k a year is more like 16k a month; 6k a month would get you 72k a year; a yield of like under 4%, and lets remember that you still have to pay body corp, maintenance etc etc - you would be giong backwards!

Location is key; in general buying from developers like LPN is easiest as the units are sought after and in generally good locations plus they are more liquid to liquidate your position. Houses are a lot more hit and miss plus.....as a foreigner you cannot own it.

Personally, I think shares are a lot less hassle and there are plenty of Thai companies with a dividend stream in this range. Shipping companies for instance.

[Nomad97]

I would guess this only,but based on rentals and costs of properties i would suggest that 10% per annum would be a starting point.

so a house bought for 2000,000 baht would fetch an annual rental of 200,000 baht a year= 6,000 a month.This is only a guide line as some older property would only fetch about 6-7%.

Hope its of interest for you don

Sorry. Do not wish to be picky but an annual rent of 200,000 Baht per year is equal to 16,667 Baht/month. I doubt very much that you would receive 16,000 Baht per month on a 2 million Baht house in Issan. You would be very lucky to get 5,000 Baht per month or 60,000 Baht per year. I suppose its all down to where you buy your property as to what return you are likely to receive. As any good estate agent will tell you it's all about the three L's - location, location, location. But then again, if you are in a very good location I doubt if you could buy a suitable house for only 2,000,000 Baht!

[johnnyk]

I'm getting about 7.4% gross p.a. from my house in HuaHin. Stable, long-term, sober and nonsmoling American man.

[quiksilva]

Net returns in the region of 6-7% can be expected, once they are leased out. Factor in void periods though and the true net return over a calendar year could be considerably less, as others have said before me, it depends on location and desirability of your unit.

The other important factor is how much you have paid for your unit. If you plan on buying ultra high end say, something like 185 Rajadamri, which the developer reportedly thinks is going to fetch 300,000 per square meter, then your expectations should be lower.

Unless you believe you are able to achieve a little better than 1,500 per square meter (which for record is already 50% more than most grade A serviced apartments).

[ray08]

Being a rent payer here , some prices offered are a bit like the Condo market , they ask what they want and leave empty till they get it , others seem more business inclined and 6-7% is about on the money,

I have some properties rented out ( overseas ) getting between 3.5 - 5% , but as we know the higher the real property cost ,less the rental yeild , even down to 2-3%

But when I was looking at a fair few top end properties here to try and lease ,i worked it back and found the owners were still working on the 6-8% return, did not matter that is would be harder to rent they asked that ,Ioffered what i thought it should be worth , 2 things happened , I got no answer back and properties still empty

Edited July 15, 2008 by ray08

[lardy]

12% Thanks

[expatgaz]

I rent out a quite large condo and get 30,000 per month.I bought it for 2.9 mil.Its now valued abt 5.0 mil.My tennant is long term,pays yearly,and no problem at all.So based on what I paid a high % return.Based on current value not such a high return % wise.

EPG.

[quiksilva]

12% Thanks

How much did you pay for your units?

[ray08]

I rent out a quite large condo and get 30,000 per month.I bought it for 2.9 mil.Its now valued abt 5.0 mil.My tennant is long term,pays yearly,and no problem at all.So based on what I paid a high % return.Based on current value not such a high return % wise.

EPG.

As rental yeilds are calculated on current market price ,i think you have a respectable return , with a long term tennant and paying yearly a sound investment ,

[dotcom]

It's funny a guy that talks nothing but smack on this board wants help. Go pump some more steroids in your arm. Did your willy fall off yet?

[TheDon]

if you dont get more then 5% i wouldnt bother, better to keep it in the bank as my bank offers 6%

[Khun Jean]

2 units in a large building. Total costs 400.000 baht. Rent 2x3000 baht. Never been empty for the last 6 years and probably never will be.

Very little maintenance. If i remember correctly one time fixed a toilet.

Wish i had more but they are hard to find and more expensive to buy now.

[johnnyk]

I rent out a quite large condo and get 30,000 per month.I bought it for 2.9 mil.Its now valued abt 5.0 mil.My tennant is long term,pays yearly,and no problem at all.So based on what I paid a high % return.Based on current value not such a high return % wise.

EPG.

What you paid is real. That is the basis of your ROI. You can be happy with that.

"Current value" is imaginary until someone hands you that sum.

Edited July 17, 2008 by johnnyk

[ray08]

I rent out a quite large condo and get 30,000 per month.I bought it for 2.9 mil.Its now valued abt 5.0 mil.My tennant is long term,pays yearly,and no problem at all.So based on what I paid a high % return.Based on current value not such a high return % wise.

EPG.

What you paid is real. That is the basis of your ROI. You can be happy with that.

"Current value" is imaginary until someone hands you that sum.

Beg to differ , what you paid is not real when calcualting ROI , eg US , Aus , UK property prices have all dropped

based on that, what you paid is not real anymore and could be down as much as 25% so you must

look at the your ROI on fair market value of what someone will pay your for property.

[johnnyk]

I rent out a quite large condo and get 30,000 per month.I bought it for 2.9 mil.Its now valued abt 5.0 mil.My tennant is long term,pays yearly,and no problem at all.So based on what I paid a high % return.Based on current value not such a high return % wise.

EPG.

What you paid is real. That is the basis of your ROI. You can be happy with that.

"Current value" is imaginary until someone hands you that sum.

Beg to differ , what you paid is not real when calcualting ROI , eg US , Aus , UK property prices have all dropped

based on that, what you paid is not real anymore and could be down as much as 25% so you must

look at the your ROI on fair market value of what someone will pay your for property.

Sorry, I don't get it.

ROI is return on investment (what you paid,what can be more real than that?).

What you will/may get is not real, its pie in the sky (or the toilet,as the case may be).

Edited July 18, 2008 by johnnyk

[quiksilva]

Your ROI is based on what you actually paid.

If you were looking to sell that asset on then the incoming investor's ROI would be based on the price they will pay to acquire that asset from you.

[ray08]

I rent out a quite large condo and get 30,000 per month.I bought it for 2.9 mil.Its now valued abt 5.0 mil.My tennant is long term,pays yearly,and no problem at all.So based on what I paid a high % return.Based on current value not such a high return % wise.

EPG.

What you paid is real. That is the basis of your ROI. You can be happy with that.

"Current value" is imaginary until someone hands you that sum.

Beg to differ , what you paid is not real when calcualting ROI , eg US , Aus , UK property prices have all dropped

based on that, what you paid is not real anymore and could be down as much as 25% so you must

look at the your ROI on fair market value of what someone will pay your for property.

Sorry, I don't get it.

ROI is return on investment (what you paid,what can be more real than that?).

What you will/may get is not real, its pie in the sky (or the toilet,as the case may be).

Return on Investment , A share like a property is an investment , if a share is purchased at $ 100 paying a 5%

dividend and 6 months latter trades at $75.00 but still gives a 5 % dividend , based on what you pay ,you might be

happy on dividend ,but when you combine with actual value of asset , you might feel sick ,

Property is liquid in pricing , so a capital gain or loss must be taking into consideration as part of return ,

If you borrow from Banks, they do it all the time on margin calls ,when investment ( shares ) goes down you get the phone call you

don,t want to hear ,and need to top up your share price even though asset not sold , you take a hit on your investment ,

Does not make sense to think I am getting a 8% return on my property I purchased for $ 900K but now worth $ 600 k

Must deduct the capital loss from the interest return to get true return on investment

[lardy]

12% Thanks

How much did you pay for your units?

He he c'mon Quicksilva we've chatted before 1.17 million each for 3 and 1.35 million for the 4th Just ask my wife Sukanya????? remember now? cant put website up here, but wifes name says it all!!

[LivinLOS]

Well as a tennant here I paid under 3% on both of my long term villas.. Thats based on the market asking price.

[zorro1]

if you dont get more then 5% i wouldnt bother, better to keep it in the bank as my bank offers 6%

Unfortunately your capitol growth is guaranteed to be zip.

[mikethevigoman]

if you dont get more then 5% i wouldnt bother, better to keep it in the bank as my bank offers 6%

Heres one for you Don, a guy i know came here 2 years ago and bought 10 new cheap properties all around 2 mill baht, he has been trying to rent them out for the 2 years,2 are rented ( he got 15000 a month for those, hes now got them on at 10,. ) 8 are still empty so he has listed them for sale ( at a loss ) this is in pattaya on the dark side,im not saying it is all like this but it aint easy, of course you will hear from the sucessful ones, but there are more that arent, we rented in view talay 7 years ago, the rent for that condo is the same now,. Edited July 20, 2008 by mikethevigoman

[zorro1]

if you dont get more then 5% i wouldnt bother, better to keep it in the bank as my bank offers 6%

Heres one for you Don, a guy i know came here 2 years ago and bought 10 new cheap properties all around 2 mill baht, he has been trying to rent them out for the 2 years,2 are rented ( he got 15000 a month for those, hes now got them on at 10,. ) 8 are still empty so he has listed them for sale ( at a loss ) this is in pattaya on the dark side,im not saying it is all like this but it aint easy, of course you will hear from the sucessful ones, but there are more that arent, we rented in view talay 7 years ago, the rent for that condo is the same now,.

What rent are you paying there?

[LivinLOS]

if you dont get more then 5% i wouldnt bother, better to keep it in the bank as my bank offers 6%

Unfortunately your capitol growth is guaranteed to be zip.

And while I paid 3% on the property I made >30% on my investments overseas.. One year renting and I made enough money to rent for 10 years from the same amount of capital I would have tied up in a purchase. of course I can 'cash out' in a phone call.

Add in the purchase risk, the illiquid market here, and the fact that my last villa was destroyed in a landslide losing the buy to rent owner his million dollar investment totally.

[LivinLOS]

if you dont get more then 5% i wouldnt bother, better to keep it in the bank as my bank offers 6%

Heres one for you Don, a guy i know came here 2 years ago and bought 10 new cheap properties all around 2 mill baht, he has been trying to rent them out for the 2 years,2 are rented ( he got 15000 a month for those, hes now got them on at 10,. ) 8 are still empty so he has listed them for sale ( at a loss ) this is in pattaya on the dark side,im not saying it is all like this but it aint easy, of course you will hear from the sucessful ones, but there are more that arent, we rented in view talay 7 years ago, the rent for that condo is the same now,.

Very similar to a buddy of mine that bought into the condo market booming hype a year or two ago, despite my advice at the time.

He has two condos in BKK and his buy to let one hasnt had a tennant yet from about 18m ago.. his live in condo was in the ballpark high 5 low 6m range and on the noticeboard downstairs theres a similar unit offered for rent at 20k per month. Add in that (IMO) hes overpaid on the condo and the market has had a haircut I expect hes down about 2mil in total on both in lost return from overseas investment, stagnant asset price, etc over only 18 months or so. And thats an asset he cant just pick up the phone and step out of.

[zorro1]

if you dont get more then 5% i wouldnt bother, better to keep it in the bank as my bank offers 6%

Heres one for you Don, a guy i know came here 2 years ago and bought 10 new cheap properties all around 2 mill baht, he has been trying to rent them out for the 2 years,2 are rented ( he got 15000 a month for those, hes now got them on at 10,. ) 8 are still empty so he has listed them for sale ( at a loss ) this is in pattaya on the dark side,im not saying it is all like this but it aint easy, of course you will hear from the sucessful ones, but there are more that arent, we rented in view talay 7 years ago, the rent for that condo is the same now,.

Very similar to a buddy of mine that bought into the condo market booming hype a year or two ago, despite my advice at the time.

He has two condos in BKK and his buy to let one hasn't had a tenant yet from about 18m ago.. his live in condo was in the ballpark high 5 low 6m range and on the noticeboard downstairs there's a similar unit offered for rent at 20k per month. Add in that (IMO) hes overpaid on the condo and the market has had a haircut I expect hes down about 2mil in total on both in lost return from overseas investment, stagnant asset price, etc over only 18 months or so. And thats an asset he cant just pick up the phone and step out of.

So far you are quoting in extremes being your return of 30% per year, A villa destroyed in a landslide and now a buddy who who chooses to ignore a successful mates advice and pay way ,way overs for his condos. I don't doubt you however your distorting the averages buy only discussing extreme cases .

[LivinLOS]

I am discussing only the facts I have to hand.. Yes I did ok out of my investments since coming here, but then I figured I would or I wouldnt have made them would I ?? I looked at putting my money into property and made the guess I would be better off in precious metals and renting.. Boy was I right.

As to the Villa falling down and wiping out the entire property, not only did my landlord lose that house but the 30m or so villa behind it is now falling to pieces, so hes actually out nearly 2 mil US on his 'investment' into Thai property. Hes now mired in a court case with a rich Bangkok Thai that he will never win. People when buying into the Thai property market dont tend to factor in these 'black swan' events but they happen far more often than people seem to realize. When they do the courts and systems of recompense also dont always work with the same impartiality as they do on the west. If your going to discuss the investment you want to point out all the risks people may not think of.

[beginner]

When they do the courts and systems of recompense also dont always work with the same impartiality as they do on the west. If your going to discuss the investment you want to point out all the risks people may not think of.

Yes many people make very expensive assumptions about the way things work here. "Assumption is the mother of all foul ups".

The ongoing Stop VT7 versus Pattaya City is a good example. A group of mainly farangs started a legal action that they believe they can win. They all seem to be pissing falang water i.e have not adjusted to the fact they live in another country with another totally different culture where the law is applied very selectively if at all.

Even if they win the immediate legal battle on the technical issues, its a near certainty that they will not achieve their objective of removing the fast growing VT7 building. A Thai solution will be ultimately be found that pleases important Thais and ensures them of no loss of face. The deluded farangs will be left to pay the bills and face the reprisals that will surely follow.

Thai rak Thai.

Buying property here is a high risk investment. Just ask the unhappy owners of houses 'owned' by companies east of Sukhumvit Road in Pattaya. In one small estate/village its estimated that nearly 60% of properties have already passed into Thai lady/partner sole ownership and occupation. How has it happened? Death, diminished funds and a late dawning realisation by the innocent farangs that the 'hansum man' was only as hansum as his willingness to keep opening his wallet.

The return on popular condos buildings such as beachfront or well located can be reasonable by real estate standards, say 6 -10% if they were bought before the current bubble. The current pricing of good located buildings makes getting a decent return very difficult. But spotting potential and beating the market is the fun of property investing isn't it?

The Pattaya market is a bit of an abaration from the normal principles of supply and demand. Special factors seem to keep the cash flowing in. The old maxim of not spending more in Thailand than you can comfortably walk away from, is a good place to start from. Once the bad guys apply and manipulate the new condo laws a lot more investors will see the truth of that idea.

[Khun Jean]

There is till lots availabel with a good return. For that you need to look at the local market and find something that Thais would be interested to rent. Not the few foreigners that come and go.

Thais that have regular jobs that pay not enough to buy (that would be 90% of them) will always be searching for a place to stay. Bangkok would be the best place to start looking for it. Any place near factories, school, office buildings, malls etc.

Ok, you can not show off your 'investments' in the 'looks' department. But they are good when you just look at the numbers.