Empty Properties

[ezzra]

Hi,

I have got 3 empty condos in Sukhumvit's prime location,( Soi 59) they have been so for many months

now, potential renters come, look and go, the units can't be faulted, modern building,F/F,next to BTS,

and the rent is reasonable too at 30-40k,

It is gut wrenching to see a prime property sitting empty month in and month out, let alone 3 of them

in the same building,

I have put us the units on couple of the local websites and a local agents with a very little results,

I know that the rental market in Bkk is soft at the moment and have been so for a while now but i didn't imagine it to be so bad,

Any TV's members contributions as how to improve the situation will be welcomed,

Thank you,

[gotlost]

I know you don't want to hear this but cut the rent.

[bifftastic]

yep, I agree, some money coming in is better than what you've got at the moment, which is nothing.

[gotlost]

It's a very hard market out there.

[whybother]

Have you asked any of the 'potentials' why they didn't choose your apartments?

[H2oDunc]

As said already. Lower the rent and see what happens. The 30-40,000 a month is maybe suffering at the moment. As said as well, follow up on the viewings and try to find out the reasons they chose somewhere else. You could also try offering a couple of freebies like internet, cable TV or a weeks free transport pass ? People like to think they are getting something for nothing

[bifftastic]

maybe offer a lower deposit? Say 2 weeks instead of a month? Or none at all if checkable references are supplied? Be creative, you're losing money right now you need to get someone in those apartments paying rent, the deposit is often the hardest part for new tenants, especially if they've just lost theirs from a previous landlord!

[ezzra]

I know you don't want to hear this but cut the rent.

I'd gladly will entertain and consider any reasonable offers from any potential

and serious people, the problems is that I'm not getting any offers

what so ever,

I also be willing to give 2 moths free rent on a one year contract,

[clinique]

Can only suggest you keep trying. Load on other websites. Bangkok Post classifieds ?

If your willing to give 2 months free rent, may be better in the tenants eyes to reduce the rent by that amount instead. Or include the electric and water in the rent that you asking. (make sure you calculate it out first ofcourse)

Put a notice in Villa Supermarket ?? Hang a sign at the Suk end of the Soi..

Whatever it takes.

Good luck.

[ChiangMaiFun]

reduce rent to that which the market 'likes' I did same here in chiang mai - took 20% off and it rented

[samtam]

"F/F" always make me shudder. I'm not suggesting that yours are, but many fully furnished properties are simply ghastly.

[trogers]

Here is the answer to the reason why you cannot rent the units out!

I have got 3 empty condos in Sukhumvit's prime location' date='( Soi 59)

[/quote']

What do you have in your locality to call it Prime Area?

Even Soi 61 is not considered prime area, and it has a Major shopping mall cum California Fitness at the entrance of the soi.

Price your units to its location.

[FarmerJoe]

You've been in Thailand too long. Your starting to think like one. I've seen condos, shop houses and houses remain empty for years because the owner wouldn't come down on the price, therefore losing millions of Baht in revenue. Then what do they do? Raise the price to make up for the lost income. Just like in the bars. Lower your price by 5 or 10,000 Baht. Like the others said. Some income is better than none. By my estimates, you've lost hundreds of thousands of baht already. Just lower it. Hope it works out for ya.

[FarmerJoe]

You've been in Thailand too long. Your starting to think like one. I've seen condos, shop houses and houses remain empty for years because the owner wouldn't come down on the price, therefore losing millions of Baht in revenue. Then what do they do? Raise the price to make up for the lost income. Just like in the bars. Lower your price by 5 or 10,000 Baht. Like the others said. Some income is better than none. By my estimates, you've lost hundreds of thousands of baht already. Just lower it. Hope it works out for ya.

[jcon]

You gotta lower the price, period.

59 isn't that prime, for 30-40K a person can rent on the lower end on Thonglor (55) and be much closer to the action. Given a choice, most renters will take the smaller place on 55 over a larger place on 59 - it's ''just'' 2 sois, but it's a world of difference... (btw you never mentioned your room sizes so I could be wrong, esp if you have a 150sqm tastefully-furnished place going for 30k.... that could be a good deal on 59).

Either way, good luck and remember anything is better than what you're getting now.... rent those babies for 20k/per and you've got 60k/month pocket money.... beats ZERO.

[ChiangMaiFun]

everyone is right - take the cut - example: last year I rented out a large unit:

36,500 cut to 30,000

Its just the market - BKK must be suffering like us here - last year everything was rented and this year I have two empty and i am cutting again.

[craigt3365]

As said already. Lower the rent and see what happens. The 30-40,000 a month is maybe suffering at the moment. As said as well, follow up on the viewings and try to find out the reasons they chose somewhere else. You could also try offering a couple of freebies like internet, cable TV or a weeks free transport pass ? People like to think they are getting something for nothing

Excellent idea. I remember an apartment that wouldn't rent where I use to live in San Diego. Why? You could hear the nearby freeway. So...they offered a free large screen TV and sound deadening curtains. Sold them in 2 weeks. These were the last units to sell in this development....

[ezzra]

Hi to All,

Many thanks for all the inputs and contributions, i get it, yes, the prudent thing to do is to lower the rent, i have already lowered the asking rental fees and also offering 2 months rent free per one year contract.

Let's see what Reponses i will be receiving now.

[davejonesbkk]

Ezzra, would you mind pm-ing me with details of your properties and pics if possible?

[supaprik]

Sorry..when did soi 59 become prime? 30-40k = 2 beds, 140m3 plus

evadently some did pay those prices in 2010 though

[trogers]

Sorry..when did soi 59 become prime? 30-40k = 2 beds, 140m3 plus

evadently some did pay those prices in 2010 though

Top View? Present rates for a 2-bed is more in the range of 25-30k.

[jackdawson]

now this is very interesting

actual hard evidence of a weak / weakening real estate market

and they keep pulling down shop houses , clearing lots , driving piles and putting up condos like there's no tomorrow

hmmm....

[ChiangMaiFun]

it is bizarre - there is over supply for sure

[Khun Jean]

The more cranes and building of offices and condos the closer to an economic correction.

[WarpSpeed]

I know you don't want to hear this but cut the rent.

Yes, seems an obvious answer and it seems the rents are not as attractive as the OP thinks...Some income is better then no income with limits of course, limits I don't think he has reached yet....

[CWMcMurray]

There are a lot more Condos in the 10,000 - 15,000 thb range that are now accessible by MRT and BTS, so the demand for these 30-40k condos is down.

[trogers]

There are a lot more Condos in the 10,000 - 15,000 thb range that are now accessible by MRT and BTS, so the demand for these 30-40k condos is down.

Not true for 2-bedrm and 3-bedrm units. Most of the new stocks are studios and 1-bedrm units. Also, the new stocks are laid out like city apartments with car parks on the lower floors and a swimming pool at the top. Not adequate for families with young children, esp when they are located close to main roads with high traffic pollution and noise.

I just rented out my 2-bedrm to a Japanese start of this year whose wife just gave birth to a daughter. They were staying in a building 100m from a BTS station, but chose to be much further inside the soi for the sake of the child.

Edited March 13, 2011 by trogers

[Darrel]

"I have got 3 empty condos in Sukhumvit's prime location,( Soi 59) they have been so for many months

now, potential renters come, look and go, ..... the rent is reasonable too at 30-40k"

Cant believe I'm reading this. There is nothing reasonable about rent of 1000Euros per month for a condo in the third world. You can get a place in major European capital cities for less.

Want to know what "reasonable" rents are? Take 4% of the purchase price and then divide that by 12. That is a reasonable rent per month. So for a 5MB condo you should be looking at 16000B/month. And that assumes that the 5MB purchase price was itself reasonable, which it probably wasnt.

This country is full of unrented or unsold properties simply because the prices are too high. That is the only reason.

[trogers]

"I have got 3 empty condos in Sukhumvit's prime location,( Soi 59) they have been so for many months

now, potential renters come, look and go, ..... the rent is reasonable too at 30-40k"

Cant believe I'm reading this. There is nothing reasonable about rent of 1000Euros per month for a condo in the third world. You can get a place in major European capital cities for less.

Want to know what "reasonable" rents are? Take 4% of the purchase price and then divide that by 12. That is a reasonable rent per month. So for a 5MB condo you should be looking at 16000B/month. And that assumes that the 5MB purchase price was itself reasonable, which it probably wasnt.

This country is full of unrented or unsold properties simply because the prices are too high. That is the only reason.

Rental rates in any major cities will depend largely on economic growth and employment prospect, and the supply of living space. Rental rates in a third world city like Bangkok largely reflect the reason why so many foreigners are making a living here instead of in a major city in their own country.

Purchase prices of newly launched projects are more tricky to analyze as it is embroiled within factors like speculation and ease of finance. Prices of condo units that are 5 years or older make a better benchmark on intrinsic value. All my 5 condo units have been rented out, and I have just inked the contracts for my two largest units of 2-bedrm and 3-bedrm (121m2 and 163 m2) in Sukhumvit 24 yesterday, both to Japanese. Rental yield is over 6% pa after common fees.

[Darrel]

Rental yield is over 6% pa after common fees.

I think you are lucky to be getting that much. I doubt I would pay that, unless it reflected a bargain purchase price.

It would be interesting to know the OPs purchase price for his units, and how that compares with 40,000B rent.

Edited March 13, 2011 by Darrel