Buying Condo in Pattaya to rent

[petr92]

Hello everyone,

I'm planning to buy a condo in Pattaya to rent it out either for tourists or for long term. Would like to hear from anyone who has done it, if it is worth it, and if someone can suggest a good lawyers & property management?

Thanks

[blackman]

i don't think its a good investment

buy a 1 million baht condo

get 8-10, 000 a month in rent

buy a good car with manufacturers warranty (fortuner, pajero, pickup) 1 million baht

rent out 20,000-25,000 a month

[moonseeker]

I have 20+ yrs. in doing this. Major headaches and problems nonstop. Yes, can make a decent return if on top of things yourself. But talking about only one unit and administered by some agent or office??? Would not call this a worthwhile investment, You will end up with 4-5% on capital if very lucky. Now, if you wanna buy now, to use yourself part-time or move in later and just make a bit of cash to cover cost. Why not? But do your homework well. I advise all my friends against it. MS>

[Gsxrnz]

Assuming 70% occupancy, purchase price 2M Baht, zero debt, rental income 18k Baht pm, management fees 10k Baht pa, R&M 10k baht pa.

Annual Income 151,200

Annual Outgoings 20,000

Net Income 131,200

Net Yield (Net Income/Purchase Price x 1/100) 6.56% p.a

To calculate the Risk Free Rate of Return, deduct the value of a "safe" bank investment at say 3%. Your "risk" return is therefore 3.56%.

Add in any capital gains you think you'll make over say 5 years (probably zero, but many will disagree), and theirs your ROI.

Use the same calculation for whatever you believe are reasonable numbers.

Do you have any idea how many unoccupied (but available for rent) condos there are in Pattaya/Jomtien? Thousands.

[petr92]

What about buying a condo within resort and rent to tourists? Or there is still too many places where people can stay?

Thanks

[Gsxrnz]

What about buying a condo within resort and rent to tourists? Or there is still too many places where people can stay?

Thanks

petr - I don't rent properties and never have done. I have a slightly warped view on both the risk and returns of residential type properties that is in the negative. I invest in commercial properties (not in Thailand), and that is done through companies that have a genuine reason to occupy and trade from the property. That's a different story.

If you're a novice buyer and don't have a network of potential occupants for your condo - I'd say you're possibly looking in the wrong direction from an investment perspective. If however you have lazy money and perhaps intend occupying the condo in the medium term, then you have different reasons for purchasing.

For me it's all about risk v return and comparative investments. My earlier reply implied you can get a 3% return (and better in some countries) from a rock solid bank. So if you buy a condo you can expect an additional 3-4%, maybe a little more. You have to decide if that profile fits your investment desires.

Do the math - if you unit is only occupied 30% of the time (and that is quite normal over here), then you're really losing investment opportunity on your money.

There is generally no wrong or right in making investments at the time of the investment. It's only TIME that proves the initial decision wrong/less wrong/right/more right etc. I've made investment decisions that on the face of it should have been wise......until the fan gets hit with the dung. Made other investments that were basically throw away money, and they've paid big dividends.

Spread your risk, don't put all the eggs in one basket.....old fashioned clichés but no less relevant today.

[pattaya_girl]

If you do go ahead and buy one, do not kit it out with expensive furniture, most tenants renting, ruin it and leave it filthy.