Converting Commercial Building To Guesthouse

[simon43]

Following on from my recent thread about leasing a resort/hotel property in Phuket, I've visited several other properties today and found a very interesting opportunity with a newly-built shop-house. Although this property is considerably smaller than some of the resorts that I have visited, when I do the numbers on my spreadsheet, the annual profit is higher, due to the very low monthly rental.

This hotel project is purely a business idea, and so it's just a numbers game. Whatever property has minimum risk and maximum profit potential is the one that I will choose.

But this shop-house currently has no internal rooms. I would need to do some wall-building and install ensuite bathrooms etc. That's not a problem for the property owner (who is offering me a lease up to 30 years).

But if I convert an existing commercial property into a guesthouse, is this something that requires formal application to the OrBorTor or government department? Anyone know? With my previous resort in Phuket, I made formal application etc because this was a completely new build, whereas this new venture just requires partitioning up the shop-house.

Simon

[seaneee]

A friend of mine bought the lease on a run down bar in Pattaya and converted it to a restaurant and 4 letting rooms above. Although not top class the rooms are very tidy indeed and rent out for 500 to 600baht / night each. The rooms have been full since the day he opened. All told the refit cost 1.1 million baht and the lease cost 200,000 b to buy and his rent with key money is only 17,000baht / month. I estimate he takes around 60,000baht monthly in with costs about 27,000 including electric and his restaurant profits are on top of this.

[seanocasey]

simon as you were a previous hotel owner I assume that you know a lawyer.

reason I say this is with a 30 year lease you will have to employ same to testify its legality in Thai law