Eden Bar

[dare]

is the Eden bar closed for good in Lamai?

[samui543]

Yes, greedy greedy landlord. Isn't the first to shut and far from being the last.

[starcandle]

Yes unfortunately Eden Bar is closing anyday now, his landlord saw fit to try and crucify him with extortionate rent. (KEY MONEY)

However Baz is going to be involved with Extra time Bar pretty much opposite the original Eden Bar, and I'm not sure whether the new Bar is going to be called Extra Time or Eden.

Edited May 30, 2011 by starcandle

[steelerian]

A greedy landlord? Im samui? Never!

[carmine]

Yes unfortunately Eden Bar is closing anyday now, his landlord saw fit to try and crucify him with extortionate rent. (KEY MONEY)

However Baz is going to be involved with Extra time Bar pretty much opposite the original Eden Bar, and I'm not sure whether the new Bar is going to be called Extra Time or Eden.

I find it astonishing that the locals are still asking for key money, even though they are without question the greediest people i have ever seen, and i travelled quite extensively.

Are there really still people out there that are that stupid who will actually pay it?!!!! WOW!!!!!

Edited May 31, 2011 by carmine

[joe84330]

i don't see any problem with key money. it's a common and sometimes necessary business expense in many different parts of the world. too many examples to list. the problem i think here on samui is that the most typical example of a key money transaction doesn't exist, i.e. that of a long term tenant with below market rent assigning a lease to a third party. in the US, where adherence to the rule of law is the norm and contracts are enforceable in a court of law, key money is an efficient way to entice the landlord to accept a rental contract in places that are burdened with rent controls or to buy goodwill in addition to brick and mortar or even get a great location with different lease terms. rent control (and perhaps goodwill) is foreign to samui, as is the rule of law. therefore there shouldn't be any need for key money transactions. just state your price and that's that.

landowners must be assuming that another rube will fall off the turnip truck right in front of their land every day. take a drive around the island on any particular day and it appears as though they just might be onto something.

[Boater]

i don't see any problem with key money. it's a common and sometimes necessary business expense in many different parts of the world. too many examples to list. the problem i think here on samui is that the most typical example of a key money transaction doesn't exist, i.e. that of a long term tenant with below market rent assigning a lease to a third party. in the US, where adherence to the rule of law is the norm and contracts are enforceable in a court of law, key money is an efficient way to entice the landlord to accept a rental contract in places that are burdened with rent controls or to buy goodwill in addition to brick and mortar or even get a great location with different lease terms. rent control (and perhaps goodwill) is foreign to samui, as is the rule of law. therefore there shouldn't be any need for key money transactions. just state your price and that's that.

landowners must be assuming that another rube will fall off the turnip truck right in front of their land every day. take a drive around the island on any particular day and it appears as though they just might be onto something.

i don't see any problem with key money. it's a common and sometimes necessary business expense in many different parts of the world.

maybe to cover the intial outlay of the building owners costs ect, but that building has been there for years, and from a friend that owned a bar near by ( untill the 3 yearly key money was up, moved out !! )

so if you look at it like this

Cost of land - 0 - I believe he was given it by his family

Cost of building - maybe 1 million THB TOPs when it was built 10 odd years ago

2 x 3 years set of key money ( for him 1.3 million odd THB )

120 Months of Rent @ say 25 a month

equals 5.6 million thb of an investment of 1 million THB, not taking into account his add ons for electric, water and you have to buy the bar stock from him !

so really there is no need to add more key money apart from greed , as it now will sit empty and he will lose his 25 K a month plus

edit

so he is trying to make a 50% return year on year on his money... not even the super powered bankers can achive this.... can the landlord be happy with a stable 10-15 % return year on year??? ................

Edited May 31, 2011 by Boater

[BusyBee123]

i think it would be prudent for other bar owners to merge their business in Lamai, half the rental overheads yet keep the same repeat customers coming year on year, sounds like a good move for the time being given numbers attending bars have been declining for the last 3 years with no end in sight for the next couple of years at least.

[itishothere]

.... can the landlord be happy with a stable 10-15 % return year on year??? ................

I don't think for one minute he is looking at internal rates or return, or margins, or pre-tax profits or any other such financial measure.

He asks for key money because he wants it and will lose face otherwise. Yes, pure greed. But like it has already been said, there is usually another one off the turnip truck (not heard that one before), or at the arrivals hall of Samui airport. And let's be fair, it has probably worked well for him for the last 20 years hasn't it?

[joe84330]

i don't see any problem with key money. it's a common and sometimes necessary business expense in many different parts of the world. too many examples to list. the problem i think here on samui is that the most typical example of a key money transaction doesn't exist, i.e. that of a long term tenant with below market rent assigning a lease to a third party. in the US, where adherence to the rule of law is the norm and contracts are enforceable in a court of law, key money is an efficient way to entice the landlord to accept a rental contract in places that are burdened with rent controls or to buy goodwill in addition to brick and mortar or even get a great location with different lease terms. rent control (and perhaps goodwill) is foreign to samui, as is the rule of law. therefore there shouldn't be any need for key money transactions. just state your price and that's that.

landowners must be assuming that another rube will fall off the turnip truck right in front of their land every day. take a drive around the island on any particular day and it appears as though they just might be onto something.

i don't see any problem with key money. it's a common and sometimes necessary business expense in many different parts of the world.

maybe to cover the intial outlay of the building owners costs ect, but that building has been there for years, and from a friend that owned a bar near by ( untill the 3 yearly key money was up, moved out !! )

so if you look at it like this

Cost of land - 0 - I believe he was given it by his family

Cost of building - maybe 1 million THB TOPs when it was built 10 odd years ago

2 x 3 years set of key money ( for him 1.3 million odd THB )

120 Months of Rent @ say 25 a month

equals 5.6 million thb of an investment of 1 million THB, not taking into account his add ons for electric, water and you have to buy the bar stock from him !

so really there is no need to add more key money apart from greed , as it now will sit empty and he will lose his 25 K a month plus

edit

so he is trying to make a 50% return year on year on his money... not even the super powered bankers can achive this.... can the landlord be happy with a stable 10-15 % return year on year??? ................

i'm not trying to advocate for key money on samui and i'm certainly not going to try and justify any particular land owners motive. unless you are trying to buy a successful and ongoing enterprise (current and future customers, branding, associations etc.) then there really isn't much reason to justify key money versus the empty shop house with no business or direction alternative.

[insertmembernamehere]

In the United Kingdom, it is illegal for landlords to require key money. I think this is also true in the US.

Why would these two outlaw this practice?

[joe84330]

In the United Kingdom, it is illegal for landlords to require key money. I think this is also true in the US.

Why would these two outlaw this practice?

i don't think this is true about the states. there is more than enough legitimate reason for an original lessee to turn over their lease (failed business, death in the family, etc.) to justify adding a supplement over the course of a year(s) to a third party. if your original contract doesn't allow for sub let and your country respects the rule of law then of course it's not going to hold up.

a prime location doesn't necessarily make for a profitable business. plenty of legit reasons for key money.

just not here on samui at the present time imo.

[ydraw]

Yes, the landlord asked for double the previous rate in key money and is asking for the same of all the other lots (e.g diamond bar, boom boom, comedy klub etc) they own on the street as their leases come up. If anyone is thinking of taking out that lease be aware that the Eden property needs a new roof which will come out of your pocket if you are silly enough to take on the lease there.

Ian is taking on Nang's bar around the corner near Zane's, and Baz is moving into Extra Time bar.

[carmine]

i don't see any problem with key money. it's a common and sometimes necessary business expense in many different parts of the world. too many examples to list. the problem i think here on samui is that the most typical example of a key money transaction doesn't exist, i.e. that of a long term tenant with below market rent assigning a lease to a third party. in the US, where adherence to the rule of law is the norm and contracts are enforceable in a court of law, key money is an efficient way to entice the landlord to accept a rental contract in places that are burdened with rent controls or to buy goodwill in addition to brick and mortar or even get a great location with different lease terms. rent control (and perhaps goodwill) is foreign to samui, as is the rule of law. therefore there shouldn't be any need for key money transactions. just state your price and that's that.

landowners must be assuming that another rube will fall off the turnip truck right in front of their land every day. take a drive around the island on any particular day and it appears as though they just might be onto something.

You generosity towards greedy landlords is to be commended.

[joe84330]

i don't see any problem with key money. it's a common and sometimes necessary business expense in many different parts of the world. too many examples to list. the problem i think here on samui is that the most typical example of a key money transaction doesn't exist, i.e. that of a long term tenant with below market rent assigning a lease to a third party. in the US, where adherence to the rule of law is the norm and contracts are enforceable in a court of law, key money is an efficient way to entice the landlord to accept a rental contract in places that are burdened with rent controls or to buy goodwill in addition to brick and mortar or even get a great location with different lease terms. rent control (and perhaps goodwill) is foreign to samui, as is the rule of law. therefore there shouldn't be any need for key money transactions. just state your price and that's that.

landowners must be assuming that another rube will fall off the turnip truck right in front of their land every day. take a drive around the island on any particular day and it appears as though they just might be onto something.

You generosity towards greedy landlords is to be commended.

i think you've missed the point of my post entirely, carmine. key money doesn't always go to the landlord. most of the time it involves only the lessee and sub-lessee. the landlord in the OP's example probably thought he was going to the bank with some extra cash and will now most likely be paying the price due to lost rents in multiple units.

this idea of key money used locally isn't much different from those gullible farang that have overpaid for their visas in nathon for years. pretty obvious it's the wrong thing to do yet unfortunately for the rest of us someone always seems to come along and pay extra for nothing in return. it's a shame really but for the most part our only outlet is griping on a forum.

[ESB7]

Foreigners are just as bad at asking for key money...in fact probably worse...how many expats do you know that arrange a 3 year lease, spend 50k on a few tables chairs and pictures, then advertise their bar for sale at 300k.............greed on everyones part...but the greed is also matched by the stupidity of the purchaser