Bangkok Condo - Trendy

[ace]

Hi,

I've been over to look at the new "Trendy" Condo development on Bangkok Sukhumvit Soi 13. I got all the sales stuff and have done a few back of the envelope estimates figuring that the rental returns will cover the interest payments on the loan needed to purchase the property. However, with the various charges, maintenance & so on I figure there is little profit to be made, unless the property increases in value and/or rental rates increase.

Now I've been coming to Thailand since '99 and I have not seen any increase in rent rates in 6 years. Well, it's about time they started going up isn't it?

Advice I've had from friends is basically that it is too risky for the expected ROI what with various current factors in politics, royalty, expected pandemics & extremism. But then again, if there were no risk, there would be no profit.

Does anyone have any opinions, experience on this, things I should look out for? Recommended m2 prices, etc?

Cheers,

Ace.

[Firefan]

You are very right that rental income seems out of whack compared to actual prices most places. As many (both Thais and foreigners) chose to invest in real estate (beyond their own home) they will somehow have to rent it out in the open market. I.e. supply/demand at work.

Getting up to 10% return per year is still possible but is getting harder - at least based on my limited research sofar. Smaller apts in cleaper areas seem to be able to do that, rahter than the new fancy projects in the center of town (where a 12M Baht apt can rent out for a measly 50-60000 Baht...).

Cheers!

[charles]

Wouldn't bank on any rise in property value as far as the Trendy is concerned.

Personally, I think this is a project to be avoided:

- Over 60K per sq.m. (I think) for a non Grade A project is seriously overpriced. It's not even "new" as such either.

- Views will be poor - especially compared to its price - seems to be pretty closed in on all sides, one side will be blocked off by the Regent and will have the pleasure of being next to a building site for 2 years (not a pleasant experience).

Basic units also seem to be of the long and narrow type which isn't a great design.

- Location is good for mass transit but bad for living in unless you want to confront massage parlour and timeshare salesman every time you pop out the door, not to mention having to wade through tourist markets to get to the BTS plus avoid freelance hookers/ladyboys after 9 p.m. at night.

- The name "Trendy Condominium" is downright embarressing and could even put off some potential renters. If the developers can't choose a passable name for a condo marketed at foreigners can they be trusted witht the other aspects of the project?

- To get a satisfactory rental return, although location is quite favorable, I'd worry you might find yourself between two stools. You would want more than the 6-10,000 that the English teacher and "local" expat (sexpat in that part of town?) might be looking to pay while potential renters with much more money to spend are going to expect (and will easily be able to find) somewhere much better than the Trendy. Not to mention that there will be plenty of competition for tenants from other units in the Trendy itself.

Just my opinion!

Edited October 4, 2005 by charles

[Guest George Bush]

The building sat for many years due to structural problems which were finally "fixed" via payoff. Not the best building to buy in.

I would guess the studio could fetch about 10,000 / month, maybe a bit more. Just a guess. Definitely would not get 20,000 / mo rent.

[CarlBkk]

Charles said: "- The name "Trendy Condominium" is downright embarressing and could even put off some potential renters. If the developers can't choose a passable name for a condo marketed at foreigners can they be trusted witht the other aspects of the project?"

Absolutely! If there are no other reasons not to buy into this development, this alone is enough. Thai developers seriously need to start using foreigners for naming their developments in English if they want to appear upscale. When will they learn. "Trendy" deserve to have no sales from foreigners at all for that blooper - I have visions of spectacled young Thais trying to be trendy by living there. "Wilshire" is another classic....how about "Wiltshire"?! Spend billions of baht on developing apartments for foreigners but can't be bothered to research the name properly. doh!

[ace]

Guys,

Thanks for your valuable advice. No one I've asked yet has recommended I go ahead so I am inclined to agree and keep my wallet firmly planted in my pocket! The structual point is interesting, I did have my suspicions about some of the build quality, even in the show rooms. And I was estimating rental return of 17-20k p/m, not 10 (though cost is relatively low at 2-3m thb for a studio, 35-47 m2).

Thanks again,

Ace

[expatinasia]

The Trendy used to be the serviced apartments of the Ambassador Hotel. The previous posting commenting that the building had structural defects and is only being used now is because of bribery is absolute nonsense. The serviced partments never created an acceptable cashflow to the heirs of the Ambassador hotel owner. A very nasty, extended court battle between a son and a daughter was eventually settled, and the property was sold to the same developer of the Regent next door.

[charles]

post deleted

Edited October 7, 2005 by charles

[taxexile]

"Wilshire" is another classic....how about "Wiltshire"?!

how about wiltshire indeed.

wiltshire is a county in england inhabited mostly by buck toothed village idiots and cider swilling jakeys.

wilshire , however , is the name of a famous long tree-lined boulevard in los angeles , california , noted for its fine restaurants and museums.

Edited October 7, 2005 by taxexile

[CarlBkk]

how about wiltshire indeed.

wiltshire is a county in england inhabited mostly by buck toothed village idiots and cider swilling jakeys.

wilshire , however , is the name of a famous long tree-lined boulevard in los angeles , california , noted for its fine restaurants and museums.

<{POST_SNAPBACK}>

Ok, I can't disagree there as I live right next to the county. Hadn't heard of the LA street, but I had thought I read somewhere that the development owner (hi-so female) had wanted to name it after places of natural beauty (Salisbury, Stonehenge etc. in Wiltshire). But I'm probably mistaken as I skim-read a long time ago. Wilshire in LA sounds more likely.

[The_Other_Mac]

Just goes to show how illiterate those southern Californians are. :-)