Key Money In Karon

[IrishIvan]

I was just down in Karon having a light snack and I noticed a 3 story shop house for rent. Now it was a perfect venue for a business my TGF has been thinking about. Nice building and reasonable rent. Then out came the words. "Key money". Now I am not daft enough to pay this extortion. My questions to the forum are:

Do they give you a receipt or is it written in the contract? Or can the landlord just keep upping the price whenever they want to buy another fortuner for the mia noi?

[stevenl]

It is an official part of the lease, so should be included in the contract.

So yes, the landlord will be able to up the ante when the lease runs out.

And this is how the landlords make most money here: renter pays a lot of key money for a e.g. 3 year lease, after 6 months the business goes broke, and somebody else comes in with again a shitload of keymoney for another 3 year lease. And that just seems to be going and going and going.

Most landlords here have enough money, and would rather leave the place empty for years in a row than lower the rent or keymoney. So you probably have no choice: accept or find a lesser location. There are exceptions, still, but they're hard to find.

Edited February 25, 2013 by stevenl

[hansgruber]

Funny thing is that the greedy westerners started the key money thing in Phuket. Sub leasing and making a killing.

Monkey see, Monkey do and now its common place.

[Old Croc]

http://www.thaivisa.com/forum/topic/77014-what-is-key-money/

[lavender19]

Have a look at this thread.

http://www.thaivisa.com/forum/topic/77014-what-is-key-money/

I always though key money was like paying goodwill for an existing business but it seems I am wrong

[NomadJoe]

In my experience, at least with the shop houses we have looked at on our street, the more key money paid, the less the monthly rent, and vice verse. At the end of the term the same amount of money will have been paid whatever the keymoney or monthly rent is.

[lavender19]

http://www.thaivisa.com/forum/topic/77014-what-is-key-money/

You beat me too it

[LivinginKata]

In my experience, at least with the shop houses we have looked at on our street, the more key money paid, the less the monthly rent, and vice verse. At the end of the term the same amount of money will have been paid whatever the keymoney or monthly rent is.

Aaah ... but the 'key money' is up front money for the property owner, who is then hoping that the rentor's business fails before the end of the key money time.

[DonaldBattles]

Better for you to take your money and run. For farangs contracts for short term lease are never enforced by the Thai courts. Your Thai girl friends needs your money not your work to do. T money is another way of screwing dumb farangs. Please consider that you are making a serious mistake to get yourself involved in a business that you are going to loose your ass like all the others do. Have a good time, get laid, pay the bill and forget about it. After all, you did not come here because you love the rice.

[taninthai]

Have a look at this thread.

http://www.thaivisa.com/forum/topic/77014-what-is-key-money/

I always though key money was like paying goodwill for an existing business but it seems I am wrong

that's what I thought too.

[IrishIvan]

Better for you to take your money and run. For farangs contracts for short term lease are never enforced by the Thai courts. Your Thai girl friends needs your money not your work to do. T money is another way of screwing dumb farangs. Please consider that you are making a serious mistake to get yourself involved in a business that you are going to loose your ass like all the others do. Have a good time, get laid, pay the bill and forget about it. After all, you did not come here because you love the rice.

can we get a "very like" button?

[keestha]

Funny thing is that the greedy westerners started the key money thing in Phuket. Sub leasing and making a killing.

Monkey see, Monkey do and now its common place.

No. Key money is a Chinese tradition: relatively low rent, but on signing the contract key money has to be paid.

[IrishIvan]

Just was talking with my landlord. She is quite a reasonable lady and her and her family own a lot of properties around the island. She explained to me that generally key money is added on by relatives of the actual owner of the property. For example the main wealth of the family may be in Bangkok and they build a row of shophouses. They give grandma one of these shops so she can run a small restaurant and have a room upstairs. Its then Grandma who chucks on the key money to pocket some extra cash herself. If it doesnt rent then she just tells Bangkok its low season or something. If the true landlords are actually in Phuket they arent interested in Key money. They want long term rentals

Also its like all the bars in say Soi Sea dragon. Do you think the guy who built that is dealing with all the idiot farangs that become pimps and buy bars? No he has a team of minions running around extorting people. The main dude just wants his monthly 50 million baht

Edited March 14, 2013 by IrishIvan

[stevenl]

I know quite a few real owners in Kata, living in Kata as well, who are asking key money. Simply because they can.

[IrishIvan]

I know quite a few real owners in Kata, living in Kata as well, who are asking key money. Simply because they can.

how would you know? They might pretend to be the outright owner. I think I am right on this one.

[stevenl]

I know quite a few real owners in Kata, living in Kata as well, who are asking key money. Simply because they can.

how would you know? They might pretend to be the outright owner. I think I am right on this one.

Because they own outright lots and lots of real estate in the area.

I think in some cases what you say is true, with my landlord e.g., they care much more about continuity and somebody who takes care of their property than as much money as quickly as possible, but I think the 'generally' in your statement is at least overdone.