Buying to rent?

[PattayaPhom]

VT1 Jomtien, you will get between 8-10% return, its proven year in year out so forget what the neysayers think. No real capitol gain but will sell without a problem.

But you won't buy one for 1.4 million THB

Yes you will and the OP has the advantage of being able to purchase in Thai name so even better.

[PattayaPhom]

VT1 Jomtien, you will get between 8-10% return, its proven year in year out so forget what the neysayers think. No real capitol gain but will sell without a problem.

Sounds about right !

WOW!!!! sounds fantastic!!! Where do I sign up? NOT!!!!

In Real Estate ....the often quoted "location, location, location" is said.....BUT remember in economics...."Supply and Demand"....Just guessing ...but what is the number of UNSOLD condos in Pattaya....100,000? 200,000? and how many of the ones sold sit empty? an equal number?...and How many projects are in the pipeline to be built?

So wishful thinking about the return, capital gains, etc!!!!

Here's a link to an interesting report on the Pattaya condominium situation in Q1 2012....(yes I know its old ...but look at the trends!)

http://pattayacondoguide.com/pdf/Pattaya-Market-Report-2012.pdf

Your shoebox in Hua Hin that you are desperate to sell may have been a bad choice but do you even know what VT1 is?

[Tazwa]

As some one who has several properties to rent, first of all, 1.4 mill will buy you a small house/condo

in the peripheries of Bkk or the boondocks in up country,

Being a landlord, you need to be able find suitable tenants, make sure they pay their rent on time

and look after and maintain the property up to a good living standard,

said amount invested will bring you no more than 5-7,000 baht a month in rent, of which, maintenance

fees, up keeps fees and taxes will have to be deducted and that if you're lucky the tenant did not

absconded with out pay and that you get paid in time all the time,

So as one who has several properties to rent, there must be some positives, right?

[bocceball1]

Pattaya Phom....glad to see you pay attention....first off ....its not MY condo ...its a friend of mine and I advised him against it....did it anyway and now he wants to sell his "shoebox" ( Which by the way is 34 sq meters)...so I do what I can for him...WHY...because that's what friends do!

As for VT1.....I'm guessing its short for that FABULOUS place that everybody wants to live in ,,,,in Pattaya....called "View Talay 1"

[cobra427]

Thanks everyone for the advise, so with an average of around 3% yield i could just leave my money locked in a 5 year high interest account..but i dont..i want to buy property. Was looking at pattaya/jomtien, bangkok seems to command higher prices, Hua hin is nice too. Chiang mai would be a ball ache to manage also anywhere west/ south west of bangkok.

Will check for repossesions too, theres seems to be alot out there.

[rgs2001uk]

^^^^^,

best you head over to Prakard.com, spend the next 6 months acquainting yourself with whats going on in the real estate world.

i want to buy property.

go ahead and buy it, fill your boots, but please dont come back on here when your property lies empty and you cant sell it.

On Nut, you could buy 3 properties and have them rented out for 4k each per month, but there is very little capital appreciation, and even less chance of selling.

Press on sounds like you have it sussed.

[bobthomas]

VT1 Jomtien, you will get between 8-10% return, its proven year in year out so forget what the neysayers think. No real capitol gain but will sell without a problem.

Sounds about right !

WOW!!!! sounds fantastic!!! Where do I sign up? NOT!!!!

In Real Estate ....the often quoted "location, location, location" is said.....BUT remember in economics...."Supply and Demand"....Just guessing ...but what is the number of UNSOLD condos in Pattaya....100,000? 200,000? and how many of the ones sold sit empty? an equal number?...and How many projects are in the pipeline to be built?

So wishful thinking about the return, capital gains, etc!!!!

Here's a link to an interesting report on the Pattaya condominium situation in Q1 2012....(yes I know its old ...but look at the trends!)

http://pattayacondoguide.com/pdf/Pattaya-Market-Report-2012.pdf

Empty units is a problem for many would be landlords. I would guess that those people didn't do their homework. but one thing trumps supply and demand and that's quality and good price for value. You have to offer a better condo at a cheaper price than all or most of your competitors, and you need to fill it with the type of person that has the ability and willingness to stay for years.

[SDM0712]

I think it's fair to say that a rental investment, like any other, offers no guarantees. The best advice is to do your homework, identify the kind of tenant you are looking for, for the green would-be investors that come to me I normally make these kind of suggestions.

Are you after long term or short term rentals. The first will give you a lower return but done properly should have limited void periods and aiming at foreign professionals will get a higher rent when compared with the local equivalent. Short term or holiday rentals can bring a lot of cash in but because they must be situated in established tourist locations will cost you a lot more to buy. Also you will have void periods and they are a lot more hassle to regulate in terms of deposits, damage, etc.

Take your time because the markets are being flooded with overpriced new developments and the equivalent resales, prices are high and demand is limited. You should be able to knock a good discount off asking prices, especially if you have funds readily available.

I can only speak for a Phuket, but 1.4 here will not get you a suitable holiday type condo. It will get you an entry level condo, a cosy 35/38 m2 in an expat area. You would expect to comfortably get 10/12, 000 for a 6/12 month rent. References as we are used to in the UK are very difficult to get and of no real value, but the eviction procedure is far easier, no S21 Notice to Quits or similar !

Good luck, I can't help you out with anywhere other than Phuket, but if you change location let me know !

Regards

Stephen

[bocceball1]

VT1 Jomtien, you will get between 8-10% return, its proven year in year out so forget what the neysayers think. No real capitol gain but will sell without a problem.

A generalized post to say the least!

"8-10% return"... Not bad if true....but you give NO examples of cost of property, expenses to maintain, and other factors such as "vacancy rate"

"proven"...does that mean guaranteed!....Past returns are NEVER a guarantee of future returns!

and best of all "sell without a problem" ...obviously depends on what you paid for it and how much of a loss you want to take when selling. AND when selling you have MORE expenses to pay ....Commission, transfer tax etc...

Easy to Buy .....Not so easy to SELL! .....

Key is to buy low....(easy to say ...Not so easy to find)

Good luck

Edited October 23, 2013 by bocceball1

[jinners]

There are no real laws protecting the landlord in Thailand. It can be difficult enough to manage a property in the UK, so I can imagine it will be dam_n near impossible in the Land of Opportunists.

If you're lucky you'll get a tenant who will pay you - maybe on time (also).

If you're lucky you'll get a tenant who may take care of your property.

But over a 5 year period (or more) I can bet that 70% of tenants will not do this.

You're a foreigner - so immediately Thais expect that anything like this does not need to be paid for. That you can afford it, so they can consider it a gift.

Please also note that rentals are generally more short-term here, so can be a real nuisance to make a profit.

If you're planning to rent to foreigners it's very seasonal, so expect gaps when you won't get money.

You will note that many Thai landlords can use more forcible means to ensure payment. Us as foreigners cannot afford to be anything other than gentlemen as guests in this country.

Andyfez, where exactly you get your info from? Thank <deleted> I didn't listen to you and others on here like you. Spouting from the well of know nowt. You don't even know where he's interested in buying <deleted>.

I have a house and condo. House rented for 6 out of 7 years (I also lived there) odd problem with property, as expected, but never (so far fingers crossed) with a tenant or payment being late. 70% of tenants over a 5 year period will not do what exactly??

I also have a condo. rented for 12 month lease from 1st month it was complete.

Buy right price, right place, have reasonable expectations, and you'll be fine.

[jinners]

VT1 Jomtien, you will get between 8-10% return, its proven year in year out so forget what the neysayers think. No real capitol gain but will sell without a problem.

A generalized post to say the least!

"8-10% return"... Not bad if true....but you give NO examples of cost of property, expenses to maintain, and other factors such as "vacancy rate"

"proven"...does that mean guaranteed!....Past returns are NEVER a guarantee of future returns!

and best of all "sell without a problem" ...obviously depends on what you paid for it and how much of a loss you want to take when selling. AND when selling you have MORE expenses to pay ....Commission, transfer tax etc...

Easy to Buy .....Not so easy to SELL! .....

Key is to buy low....(easy to say ...Not so easy to find)

Good luck

Why would you think he's making this up? I can attest that he isn't. And why are you (and others) on here so neg? I can only assume that you have no capital to invest, have a pension so pay rent, and envy those that are able to invest and earn income. Too many neg posts on here as ever.

[jinners]

Thanks everyone for the advise, so with an average of around 3% yield i could just leave my money locked in a 5 year high interest account..but i dont..i want to buy property. Was looking at pattaya/jomtien, bangkok seems to command higher prices, Hua hin is nice too. Chiang mai would be a ball ache to manage also anywhere west/ south west of bangkok.

Will check for repossesions too, theres seems to be alot out there.

Lots going on in Jomtien. My advice would be get in early on off plan with a proven, trusted developer, yes they DO exist despite the negative posts on here. Get it at right price in right place and you'll rent it at the right price. Yes there are a lot of developments going up, but as the land costs increase, so do the condo prices, so choosing a resale (a new one) might be a better way to go if you can't get the right thing new. For what you want to pay you'll get 12k a month long term (12 months).

[bocceball1]

Jinners.....did we get up on the WRONG side of the bed or what???? Read the post about "grumpy old men" seems to apply to you.

You seem to think I should take Pattaya Phom at his word! WHY??? I don't know him or you....this is a forum ...you want respect then give me CONCRETE examples of WHAT your talking about. I have and have no problem doing so.

Don't just sprout numbers like your GOD and think everyone should bow to you and believe....GET REAL.

As for me ....I have done well...thank-you very much....try reading my posts ...I have nothing to hide....Have 4 properties here (two houses) ...lake house in the states and a NUMBER of rental properties in Prime areas near Silcon Valley......so not only do I KNOW what I'm talking about ...I give examples....real life stuff , not the "pie in the sky" fantasy stuff people like you and Pattaya Puff seem to sprout....

Good luck in fantasy world

[beachproperty]

Jinners....what Real Estate Company do you work for? just like to know so I can avoid it. Is everybody as negative as you in Pattaya as you seem be the one with the negative attitude!

[Khun Jean]

I target Thai working people.

You know what? The country is full with those.

And they all need space to live, preferably close to work.

Sure, i don't have condos that i take my family on a tour to show them off.

They are just the typical condo Thais use.

I still keep them in good working order and floors, walls, ceiling etc is maintained very well.

I don't rent out with furniture. Too much hassle as then the tv beaks, or fridge stops working etc. Your roi will rapidly decline to an uninteresting level.

It also helps people making the place their own. And that keeps them to continue renting it.

I have many that are renting from the moment i bought them. Very close to 100% occupation as it is only empty a little while between tenants because that time is used to fix, clean everything into perfect condition.

I would say, buy to rent works extremely well. 10% is the minimum and there is a lot of appreciation. That however is also luck because of lucky timing. I do my best to take timing out of the equation buy buying a few every year.

Some have appreciated over 200% and they are still rented out. The rent on those also went up. About 50%. Those are owned around 10 years. Bought for 250k are now selling for around 550k (at that price it is a lot less interesting to buy though!). First rent i got was 2000 a month. Now 3000 a month.

They are all located in Bangkok. And i purposely do not market it to foreigners who are a minority and often they go back home to mommy because they can't handle women or Thai in general.

Edited October 23, 2013 by Khun Jean

[bocceball1]

I target Thai working people.

You know what? The country is full with those.

And they all need space to live, preferably close to work.

Sure, i don't have condos that i take my family on a tour to show them off.

They are just the typical condo Thais use.

I still keep them in good working order and floors, walls, ceiling etc is maintained very well.

I don't rent out with furniture. Too much hassle as then the tv beaks, or fridge stops working etc. Your roi will rapidly decline to an uninteresting level.

It also helps people making the place their own. And that keeps them to continue renting it.

I have many that are renting from the moment i bought them. Very close to 100% occupation as it is only empty a little while between tenants because that time is used to fix, clean everything into perfect condition.

I would say, buy to rent works extremely well. 10% is the minimum and there is a lot of appreciation. That however is also luck because of lucky timing. I do my best to take timing out of the equation buy buying a few every year.

Some have appreciated over 200% and they are still rented out. The rent on those also went up. About 50%. Those are owned around 10 years. Bought for 250k are now selling for around 550k (at that price it is a lot less interesting to buy though!). First rent i got was 2000 a month. Now 3000 a month.

They are all located in Bangkok. And i purposely do not market it to foreigners who are a minority and often they go back home to mommy because they can't handle women or Thai in general.

I think poster would do well to take a page from your book....good job....by the way ...where in Bangkok are these condo's?

[Khun Jean]

Around prakhanong until around on nut.

Sometimes a few km into the sois.

Public transport (song theaws, suziki minivan etc) in those sois has to be good to connect to the skytrain.

[beachproperty]

khun Jean ....if I understand correctly ....there are still condo's in that area (basic ...from the sound of it) for around 500,000 baht or so.

Size wise....are they studios (35 sq meters)

Have a bathroom?

Have a kitchen? simple sink setup?

Edited October 23, 2013 by beachproperty

[bocceball1]

I know the area.....I have a house in Prawet. Good spot.

[bobthomas]

khun Jean ....if I understand correctly ....there are still condo's in that area (basic ...from the sound of it) for around 500,000 baht or so.

Size wise....are they studios (35 sq meters)

Have a bathroom?

Have a kitchen? simple sink setup?

Thai channots are cheaper than Farang channots. At this price you are generally looking at an empty shell that has a bathroom. Besides, 10-15 years ago? That was whole different era. Most people that bought then made out real well!!!

[bobthomas]

khun Jean ....if I understand correctly ....there are still condo's in that area (basic ...from the sound of it) for around 500,000 baht or so.

Size wise....are they studios (35 sq meters)

Have a bathroom?

Have a kitchen? simple sink setup?

Thai channots are cheaper than Farang channots. At this price you are generally looking at an empty shell that has a bathroom. Besides, 10-15 years ago? That was whole different era. Most people that bought then made out real well!!!

[rgs2001uk]

khun Jean ....if I understand correctly ....there are still condo's in that area (basic ...from the sound of it) for around 500,000 baht or so.

Size wise....are they studios (35 sq meters)

Have a bathroom?

Have a kitchen? simple sink setup?

A lot of condos for sale in that area for 400k, rented for about 3,800 per month.

Size wise, less than 35sm, more like 20+.

Bathroom yes, kitchen on the balcony outside, yes simple sink set up.

[rgs2001uk]

VT1 Jomtien, you will get between 8-10% return, its proven year in year out so forget what the neysayers think. No real capitol gain but will sell without a problem.

A generalized post to say the least!

"8-10% return"... Not bad if true....but you give NO examples of cost of property, expenses to maintain, and other factors such as "vacancy rate"

"proven"...does that mean guaranteed!....Past returns are NEVER a guarantee of future returns!

and best of all "sell without a problem" ...obviously depends on what you paid for it and how much of a loss you want to take when selling. AND when selling you have MORE expenses to pay ....Commission, transfer tax etc...

Easy to Buy .....Not so easy to SELL! .....

Key is to buy low....(easy to say ...Not so easy to find)

Good luck

Why would you think he's making this up? I can attest that he isn't. And why are you (and others) on here so neg? I can only assume that you have no capital to invest, have a pension so pay rent, and envy those that are able to invest and earn income. Too many neg posts on here as ever.

The first thing I learned in my trade was, dont assume, check, then verify.

I have answered this before but am more than happy to answer your observations.

I can only assume that you have no capital to invest

Wrong, my rental income from the last 6 years has provided me with enough capital to buy another house for cash, in my country.

have a pension

Sorry, nowhere near retirement age, but my properties will play a part of my pension plan.

envy those that are able to invest and earn income.

Why should I envy those who invest and earn income, I am one of them, in fact I cant understand why more dont.

My investments include Thai stocks picked up when the SET was about 300, today about 1600, hows that property in Pattaya performed over the same period.

I can sell tomorrow, no need to pay Thai rates of 3%, or rip off farang rates of 10%.

If you need investing tips, head over to the finance forum.

Heres a couple to be going on with, Aberdeen and ING mutual funds.

The wife says those m/c vests provide an even better income, I feel such a shrewd investor such as yourself already knows this, so why would you be pimping dodgy property on an internet forum?

Sorry for being so negative, perhaps you can enlighten me where I can buy land and property in Thailand in my own name and have a chanote issued (not condos), you are the expert after all.

[GlobalCtzn]

If you are a Thai national and can own land then do NOT buy a condo. Buy a small house (near a university if possible). My choice would be Chiang Mai. If you are not staying where the house is you are going to need some local help. I applaud your thinking and spirit, but you had better have a handle on how you will realistically manage it before sinking the money.

[alexanderthai]

Well, investment in the right time in the right place is about your luck and wise. I manage many properties in Pattaya especially commercial properties. They will give you a good return properly 5% up per year. Then, you can wait for the capital gain in the last peroid. If you want to know more , you can send email to me [email protected] I can show you some example case ,you don't have to decide to invest any Baht with me.

[sirineou]

Just as an example....if your interested in Hua Hin ....Condo's at the Sports Villa ....(there is one available that I know of....PM if interested) for 880,000 Baht (studio) If you rent to an expat on long term basis for 4000/month your return is around 5%....should be easy to rent at that price....maybe can get more????

Interesting. I wonder what the net rental yield would be.

Assuming at studio of size 25 sqm.

Common fees - Bt875/mth x 12 - Bt10,500

Agent's fees 1.5 mths for a 2 year rental - Bt6,000

Gross rent received for 2 years - Bt96,000

Less: Agent's fee - Bt6,000 and common fees Bt21,000

Net rent received in 2 years - Bt69,000

Net rental yield per year - 3.92%

This calculation does not include loss of rental income between tenants.

Present fix deposit rates at bank for 2 years > 3% pa.

Would you invest in this condo unit with such a net rental yield?

A good analysis but it misses two very important points, ROI through property appreciation, and diminishing returns through principal depreciation.

A 2 year cd might provide a 3% return but the principal will loose a value equal to the 2 year inflation rate, subtract the inflation rate and the 3% return is significantly reduced.

on the other hand

A real estate investment might according to your analysis only provide a 3.92%return from rent but ignores the equity realized through property apreciation

Edited November 4, 2013 by sirineou

[trogers]

Just as an example....if your interested in Hua Hin ....Condo's at the Sports Villa ....(there is one available that I know of....PM if interested) for 880,000 Baht (studio) If you rent to an expat on long term basis for 4000/month your return is around 5%....should be easy to rent at that price....maybe can get more????

Interesting. I wonder what the net rental yield would be.

Assuming at studio of size 25 sqm.

Common fees - Bt875/mth x 12 - Bt10,500

Agent's fees 1.5 mths for a 2 year rental - Bt6,000

Gross rent received for 2 years - Bt96,000

Less: Agent's fee - Bt6,000 and common fees Bt21,000

Net rent received in 2 years - Bt69,000

Net rental yield per year - 3.92%

This calculation does not include loss of rental income between tenants.

Present fix deposit rates at bank for 2 years > 3% pa.

Would you invest in this condo unit with such a net rental yield?

A good analysis but it misses two very important points, ROI through property appreciation, and diminishing returns through principal depreciation.

A 2 year cd might provide a 3% return but the principal will loose a value equal to the 2 year inflation rate, subtract the inflation rate and the 3% return is significantly reduced.

on the other hand

A real estate investment might according to your analysis only provide a 3.92%return from rent but ignores the equity realized through property apreciation

The quantum of property appreciation, if any, depends on various factors like location, the type of community the property is in, the state of the general economy, and for holiday venues, the state of the world economy.

Deflation, instead of inflation, can also be a possibility, as seen in Japan.

I did not consider property appreciation nor deduct refurbishment cost to maintain the interior of the condo unit over time.

Investors also have to ask themselves the cost of illiquidity of real estate.

Edited November 4, 2013 by trogers

[Khun Jean]

khun Jean ....if I understand correctly ....there are still condo's in that area (basic ...from the sound of it) for around 500,000 baht or so.

Size wise....are they studios (35 sq meters)

Have a bathroom?

Have a kitchen? simple sink setup?

Thai channots are cheaper than Farang channots. At this price you are generally looking at an empty shell that has a bathroom. Besides, 10-15 years ago? That was whole different era. Most people that bought then made out real well!!!

There is a high probability that 10-15 years from now people will say the same.

I did not buy all of it 10-15 years. I did not have the money for it. i just bought one for about 150K. And started from there. Working and saving until i could buy the next. And so on. That first one i still have, it is getting 3500 baht a month and would be worth around 500k if sold. I started renting it out for 1500 baht a month. Every few years going up in price to compensate inflation.

It is an advantages of buying many cheap condos over time instead of one or few expensive ones. You can minimize the effects of boom and bust periods, but of course you will never be completely safe from them. As i have no mortgages i can wait. The locations are good for Thai workers so i do not expect long periods with low occupancy. I am close to 100% so even when that gets lower the average will be high enough.

Spreading out your buys over a year would not do any good. Spread them out over a decade or more.

[sirineou]

The quantum of property appreciation, if any, depends on various factors like location, the type of community the property is in, the state of the general economy, and for holiday venues, the state of the world economy.

Deflation, instead of inflation, can also be a possibility, as seen in Japan.

I did not consider property appreciation nor deduct refurbishment cost to maintain the interior of the condo unit over time.

Investors also have to ask themselves the cost of illiquidity of real estate.

I was under the impression that we were talking about Thailand, were the historical trend is for currency to depreciate as a result of inflation,and real estate values to appreciate.

except for the liquidity issue,( a lot easier to liquidate a cd as apposed to selling s property,) and the risk factor,( no risks associated with CDs as apposed to a certain amount of risk associated with real estate investment) which is absolutely true

all of the rest are true only in a limited sense .

Deflation is present in some places for some time, but it is the exception rather than the rule, The overwhelming trend for currencies is to inflate . And even though real estate could also depreciate , me being the victim of such situation being heavily invested in the North East Florida real estate market, Historically real estate has being a good hedge toward inflation.

A prudent investor will consider possibilities, assign a probability factor to them, and decide if the ROI is proportional to the risk involved..

I agree that when one is investing in Real Estate (or any other kind of investment)one should consider all the variables. such as , location, the economy at the time, condition of the property, etc. I thought that was a given.

Edited November 4, 2013 by sirineou

[Khun Jean]

I do not mind deflation at all. When owning and renting out i look what i can do with the money i earn.

If there is inflation i can do less, i raise the rent and then i can do the same again.

With deflation i can do more but probably have problem collecting the rent so you lower them.

My purchasing power stay about the same when income is made from rents. That is not the case when you have a job or have a mortgage.

The delays in adjusting your salary are not under your control.

The only situation that is not good is biflation and that is what is currently happening in my own country.

House prices fall, other prices rise. Salaries remain about the same.

My condos i have in my home country catch lower rents then 10 years ago as people are unable to afford it.

Occupancy rates go down to. 10 years ago when advertised i could choose between hundreds, now recently i am happy when i get 4 or 5 who respond to an advertisement. And of those 2-3 can only rent with government assistance!

Those condos still have a mortgage on them so they are not working in my favor. Taxes don;t help either.

In Thailand my situation is a lot different because i only bought with cash and there are no high taxes to be paid so it is not a drain even when it is not occupied.