Buying An Apartment Building

[RoboLB]

Hi,

Just joined the forum, so here is a bit of background.

Live in Sydney, married to Thai lady over 10 years (who is also Australian Citizen), no kids. Extended family lives in Bangkok. Me 50 yrs, wife 40yrs.

We own a business in Sydney with a subsidiary in Bangkok. (training related).

Whilst I have never lived in Thailand, I have made over 100 visits on business/holiday. So have some knowledge of the place and love the country/people. Speak some basic Thai. We may retire in Thailand.

We are looking to invest in a business in Thailand. 3 reasons. 1st to start building our interests there prior to potential retirement in Thailand. 2nd, as a simple investment. 3rd to provide a job for a family member, who is hard working and trustworthy.

So amongst other things, we are considering an apartment building. We note that there are buildings available in Bangkok at Baht 10 million and under. This is our price range. I imagine that buildings near major Universities or Hospitals would attract high demand/occupancy. Type of building will be one room 'studio' type apartments at the lower rental range. Maybe offering other services on ground floor. Laundry, internet cafe, or other.

Does anyone have experience of owning this type of building? Or indeed of living in such a building? Just want to start reseraching the tips and traps of such investments before we seriously start looking.

Any experinces or thoughts to hare would be most appreciated.

Robo

[RAZZELL]

No real knowledge but I think it's a great idea

In most building's it seems the "real money" is in providing the "extras".

Small mark-ups on electric, gas, water and in-room internet rather than the rent.

RAZZZ

[trogers]

An apartment building is considered landed property. If you set up a company to buy one, it should be authentically majority Thai-own.

[alexanderthai]

Totally agree with your business . Bangkok is always lack of accomodation. First of all, you should survey the market price for making sure that you will not be riped off. Secondly, you can estimate your income monthly and see how many percent return which you will get per year. Thirdly, Compairing the rate of return from your investment with rate of return from the bank. This type of business's income will come from two types of properties :

1. ROI

2. Capital gain ( After sale properties)

Ps. make sure that rate of return from your apartment will come from the net profit monthly.

Good luck , hope my suggestion will be worth enough for you.

[RoboLB]

Totally agree with your business . Bangkok is always lack of accomodation. First of all, you should survey the market price for making sure that you will not be riped off. Secondly, you can estimate your income monthly and see how many percent return which you will get per year. Thirdly, Compairing the rate of return from your investment with rate of return from the bank. This type of business's income will come from two types of properties :

1. ROI

2. Capital gain ( After sale properties)

Ps. make sure that rate of return from your apartment will come from the net profit monthly.

Good luck , hope my suggestion will be worth enough for you.

Yes, these are the normal means of assessing a property investment. Looks like 7-8% return could be possible. Though not sure I would bank on any capital gain. Apartments traditionally do not appreciate like houses, given the small land footprint/component.

[RoboLB]

No real knowledge but I think it's a great idea

In most building's it seems the "real money" is in providing the "extras".

Small mark-ups on electric, gas, water and in-room internet rather than the rent.

RAZZZ

Yes I think you are right. Lots to me made on the extras. Laundry service etc.

[johnnyk]

When calculating your Rate of Return be ruthless with the numbers. Include ALL costs, don't fiddle the numbers to talk yourself into something.

Edited August 15, 2010 by johnnyk

[Stolten]

RoboLB I think that an apartment building is a good idea.

If you want to increase the rate of return there is the possibility of buying land and construct your own apartment building. If you build it yourself the ROI can be as high as 15-20% on a student accomodation. This is of coarse not as easy as buying an existing one but there are many advantages such as the possibility to better control the layout and quality of the construction. However this option would include a lot more work initially.

Best regards, Stolten

[RoboLB]

RoboLB I think that an apartment building is a good idea.

If you want to increase the rate of return there is the possibility of buying land and construct your own apartment building. If you build it yourself the ROI can be as high as 15-20% on a student accomodation. This is of coarse not as easy as buying an existing one but there are many advantages such as the possibility to better control the layout and quality of the construction. However this option would include a lot more work initially.

Best regards, Stolten

Yes, my wife suggested that too. Not sure I want to go through all the hassle though. I am very time poor, running three businesses.