is it easy to rent out simple style condos in Pattaya/Jomtian ?

[PattayaPhom]

Oh dear, usual suspects about lating doubt on a genuine enquiry from a fellow member.

OP, View Talay 1/2 Angket, Rimhad to name a few are all very popular and at most times full regardless of how many lights are on at night and what people on here say.

These are in your price range, low maintenace fees and well kept. 8/9% is possible.

Angket will have construction starting next door so not so good in the short term.

Stay away from Majestic and Park Lane

Take your time to look around

Hey I live at park lane, Its not that bad, has a brilliant pool.

Then again I only rent.

In a couple of years will need a lot of maintenance inside, have seen better quality furnishings.

Op why don't you buy in your own country a much safer investment, and if ever down on your luck will have a place to hang your hat.

Electric per unit???

[FiftyTwo]

300-500k condos (thai-style) and the rent out for 2000-3000bath a month yes it will work..

Where in Pattaya can buy units in the 300-500 price range? is it even freehold ?

Mostly I been looking at units in the 1-2 million BHT price range with monthly rental to expect 11000-14000 BHT.

However i doubt if they will be rented out the whole year ...Serious doubt it and if for example you cant rent out 3-4 months a year then it becomes a bad investment

5% return is achievable, on 2M, 8k/month.

I think your expectations are unrealistic, and asking 14k would result in an empty condo for much of the year.

[trogers]

300-500k condos (thai-style) and the rent out for 2000-3000bath a month yes it will work..

Where in Pattaya can buy units in the 300-500 price range? is it even freehold ?

Mostly I been looking at units in the 1-2 million BHT price range with monthly rental to expect 11000-14000 BHT.

However i doubt if they will be rented out the whole year ...Serious doubt it and if for example you cant rent out 3-4 months a year then it becomes a bad investment

5% return is achievable, on 2M, 8k/month.

I think your expectations are unrealistic, and asking 14k would result in an empty condo for much of the year.

I have been getting Bt15k a month for the last five years on my Bt2m condo unit...

[KittenKong]

I have been getting Bt15k a month for the last five years on my Bt2m condo unit...

But why would anyone in their right mind pay so much when there are so many other places available?

[flakes]

I have been getting Bt15k a month for the last five years on my Bt2m condo unit...

But why would anyone in their right mind pay so much when there are so many other places available?

What other places... 15 K month on a 2 M BHT condo is like 9 % probably fetching 8 % Net that is reasonable...

May i ask you Kittenkong how and where u would spend 2,000,000 BHT on then ?

[leggo]

Golden rule in real estate -buy at the bottom, sell at the top! Right now it's at the top and you're crazy to even think about as Thailand is about to fall off a cliff economically, too much credit out there which cannot be serviced, not competitive enough, too much corruption and not looking politically as well balanced as it might!

Sent from my i-mobile IQ 2 using Thaivisa Connect Thailand mobile app

[KittenKong]

I have been getting Bt15k a month for the last five years on my Bt2m condo unit...

But why would anyone in their right mind pay so much when there are so many other places available?

What other places... 15 K month on a 2 M BHT condo is like 9 % probably fetching 8 % Net that is reasonable...

May i ask you Kittenkong how and where u would spend 2,000,000 BHT on then ?

No, I meant who would pay 15K per month rent for a condo that was only worth 2MB to buy? I certainly wouldn't.

[stockholm1995]

If you are looking for 9% return/year you maybe should look at places like samui. There are already to many condos for rent in Pattaya which make it very difficult to get 9% net return/year

I bought a condo offplan in Samui for 5 years ago for 3 M Baht. I invested 200 000 more on decor and did some changes to make the condo look better than the average condo in same building.The occupancy rate has been 90% / year while most of the condos in same building 2-3 months/ year.

Why? Because of the interior.

Calculation:

12x 30000 x 90%= 324000 baht/ year

324000-52000 (maintenance)= 272000 baht/ year

272000/3200000= 8,5 % return/ year

Ok thanks and noted..

I already noticed that in Bangkok most buyers are thais and often they dont buy for rental returns but more as a long term investment for their money.Also they buy units/condos for them selfs or family members to live in.

The rental returns in Bangkok are already lower then in Pattaya that why i dont look much in Bangkok.

Does anyone know cities in Thailand with better rental returns then in Pattaya ?

[trogers]

I have been getting Bt15k a month for the last five years on my Bt2m condo unit...

But why would anyone in their right mind pay so much when there are so many other places available?

What other places... 15 K month on a 2 M BHT condo is like 9 % probably fetching 8 % Net that is reasonable...

May i ask you Kittenkong how and where u would spend 2,000,000 BHT on then ?

No, I meant who would pay 15K per month rent for a condo that was only worth 2MB to buy? I certainly wouldn't.

Location, location and location. Not all condo units are viewed in the same manner. Demand can be a bitchy thing, sometimes between units in the same building.

But my trick is simple - I buy them at the low point of the property cycle, and I buy only old condo units in choice locations and refurbish them for rental.

The Bt2m condo unit is in Sukhumvit, Bangkok and not Pattaya, and it is a proper 1-bedroom unit of 45 sqm. Units of this size and similar layout in newer projects are asking rents from Bt20 to 25k. Thus, I have a niche market.

Why would condo units in newer projects ask such high rents? Because they were purchased at prices from Bt80-90k per sqm.

Edited November 20, 2013 by trogers

[flakes]

Stockhom says :

I bought a condo offplan in Samui for 5 years ago for 3 M Baht. I invested 200 000 more on decor and did some changes to make the condo look better than the average condo in same building.The occupancy rate has been 90% / year while most of the condos in same building 2-3 months/ year.

Why? Because of the interior.

Flakes says :Then it seems to me that the Condo rental demand is pretty weak in Samui since the other condo owners can only rent out 3 months a year...I then guess they can only rent out on those 3 months in Samui where it is not raining non stop...Still you have alot of nerve buying off plan in Samui anyways congratulations.I wonder how many offplan projects has never started with construction after deposits been collected from the farangs...uncountable i assume.

[KittenKong]

But my trick is simple - I buy them at the low point of the property cycle, and I buy only old condo units in choice locations and refurbish them for rental.

The Bt2m condo unit is in Sukhumvit, Bangkok and not Pattaya, and it is a proper 1-bedroom unit of 45 sqm. Units of this size and similar layout in newer projects are asking rents from Bt20 to 25k. Thus, I have a niche market.

Why would condo units in newer projects ask such high rents? Because they were purchased at prices from Bt80-90k per sqm.

Sorry, still doesn't make sense to me.

15k is a fairly average wage for a Thai employee with a bit of responsibility. Who in his right mind would spend that to rent a 2MB condo? Unless perhaps there really is a huge accommodation shortage in Bangkok (of which I am not convinced)?

My condo was offered for rent at 20k. I offered half. This was accepted.

[trogers]

But my trick is simple - I buy them at the low point of the property cycle, and I buy only old condo units in choice locations and refurbish them for rental.

The Bt2m condo unit is in Sukhumvit, Bangkok and not Pattaya, and it is a proper 1-bedroom unit of 45 sqm. Units of this size and similar layout in newer projects are asking rents from Bt20 to 25k. Thus, I have a niche market.

Why would condo units in newer projects ask such high rents? Because they were purchased at prices from Bt80-90k per sqm.

Sorry, still doesn't make sense to me.

15k is a fairly average wage for a Thai employee with a bit of responsibility. Who in his right mind would spend that to rent a 2MB condo? Unless perhaps there really is a huge accommodation shortage in Bangkok (of which I am not convinced)?

My condo was offered for rent at 20k. I offered half. This was accepted.

You are correct on "Who in his right mind would spend that to rent a 2MB condo?". The value of the property is now worth more than Bt2m after refurbishment and with the property cycle nearing the peak.

[KittenKong]

You are correct on "Who in his right mind would spend that to rent a 2MB condo?". The value of the property is now worth more than Bt2m after refurbishment and with the property cycle nearing the peak.

Ah, that changes things. As far as I'm concerned you have to calculate the rent being paid today as a percentage of what the property is worth today, not on what it was worth when you bought. Anything else gives an erroneous figure.

[flakes]

You are correct on "Who in his right mind would spend that to rent a 2MB condo?". The value of the property is now worth more than Bt2m after refurbishment and with the property cycle nearing the peak.

Ah, that changes things. As far as I'm concerned you have to calculate the rent being paid today as a percentage of what the property is worth today, not on what it was worth when you bought. Anything else gives an erroneous figure.

Hi Flakes here,

Sorry but i dont think so...

You need to calculate your rental returns always based on your initial purchase price...not on what the property is worth 3 years lateron..

And regarding your previous comment that u would never rent a 2 M BHT unit for 15 K a month ..Well i personally never look much at the purchase price if i just want to rent a property in that case i look mostly at the rental price if it is in line with the property offered..

[trogers]

You are correct on "Who in his right mind would spend that to rent a 2MB condo?". The value of the property is now worth more than Bt2m after refurbishment and with the property cycle nearing the peak.

Ah, that changes things. As far as I'm concerned you have to calculate the rent being paid today as a percentage of what the property is worth today, not on what it was worth when you bought. Anything else gives an erroneous figure.

Hi Flakes here,

Sorry but i dont think so...

You need to calculate your rental returns always based on your initial purchase price...not on what the property is worth 3 years lateron..

And regarding your previous comment that u would never rent a 2 M BHT unit for 15 K a month ..Well i personally never look much at the purchase price if i just want to rent a property in that case i look mostly at the rental price if it is in line with the property offered..

This is what is on the mind of most potential tenants. The location, the quality of living in the space, and the quality of living in that community, and the facilities. Do these factors justify the asking rent?

To answer the OP, location and the quality of its community are the main factors why some area/building has high demand, and others poor demand - and these are the most important factors renting out a simple style condo as it is not easy to make it stand out above its competition that is in oversupply.

Edited November 22, 2013 by trogers

[KittenKong]

As far as I'm concerned you have to calculate the rent being paid today as a percentage of what the property is worth today, not on what it was worth when you bought. Anything else gives an erroneous figure.

You need to calculate your rental returns always based on your initial purchase price...not on what the property is worth 3 years lateron..

And regarding your previous comment that u would never rent a 2 M BHT unit for 15 K a month ..Well i personally never look much at the purchase price if i just want to rent a property in that case i look mostly at the rental price if it is in line with the property offered..

Many people seem to make this mistake of seeing the current rent as a percentage of the purchase price. You have to see it as a percentage of the current value. Why? Because if you sold the property in order to invest in something else you would have today's price, not the price you paid when you bought it. And the return you would get on that money will be according to what it is worth today. If you dont work it out that way then you cant actually calculate a proper rent at all.

Condo bought for 2.5MB in 2000. Rented out for 125K/year at that time. That's 5%.

Condo today worth 5MB, and current rent at 250K/year. That's still 5% and not 10%. The rest of the gain is capital appreciation.

You actually say this yourself in your last sentence: you judge a correct rent for today according to what the property is worth now, not according to what it was worth x years ago.

[trogers]

As far as I'm concerned you have to calculate the rent being paid today as a percentage of what the property is worth today, not on what it was worth when you bought. Anything else gives an erroneous figure.

You need to calculate your rental returns always based on your initial purchase price...not on what the property is worth 3 years lateron..

And regarding your previous comment that u would never rent a 2 M BHT unit for 15 K a month ..Well i personally never look much at the purchase price if i just want to rent a property in that case i look mostly at the rental price if it is in line with the property offered..

Many people seem to make this mistake of seeing the current rent as a percentage of the purchase price. You have to see it as a percentage of the current value. Why? Because if you sold the property in order to invest in something else you would have today's price, not the price you paid when you bought it. And the return you would get on that money will be according to what it is worth today. If you dont work it out that way then you cant actually calculate a proper rent at all.

Condo bought for 2.5MB in 2000. Rented out for 125K/year at that time. That's 5%.

Condo today worth 5MB, and current rent at 250K/year. That's still 5% and not 10%. The rest of the gain is capital appreciation.

You actually say this yourself in your last sentence: you judge a correct rent for today according to what the property is worth now, not according to what it was worth x years ago.

As a landlord of 5 condo units for the last 5-6 years, I do not set rents according to what I think my property is worth. I set rents at levels suited to the changing conditions in the rental market.

I have said that the value of my Bt2m condo has appreciated, but note also I have not adjusted the rent of Bt15k up since 5 years ago. This is because there is a growing oversupply of small condo units since the beginning of last year.

As an investor, my total return on investment is two-fold - rental income and capital appreciation. The latter can only be realised after selling, but for now, it is just an accounting figure.

[KittenKong]

As a landlord of 5 condo units for the last 5-6 years, I do not set rents according to what I think my property is worth. I set rents at levels suited to the changing conditions in the rental market.

I have said that the value of my Bt2m condo has appreciated, but note also I have not adjusted the rent of Bt15k up since 5 years ago. This is because there is a growing oversupply of small condo units since the beginning of last year.

I see it more as the market sets the rent, not the landlord. Just as the market sets the sale value of properties.

And as the one alters so will the other and normally they will track each other quite closely. If they dont then there is something going wrong somewhere.

If as you say there is a growing oversupply of units like yours, what makes you think that its value has really increased? If its value had increased then the sort of rental price you could achieve would also have increased, wouldn't it?

[trogers]

As a landlord of 5 condo units for the last 5-6 years, I do not set rents according to what I think my property is worth. I set rents at levels suited to the changing conditions in the rental market.

I have said that the value of my Bt2m condo has appreciated, but note also I have not adjusted the rent of Bt15k up since 5 years ago. This is because there is a growing oversupply of small condo units since the beginning of last year.

I see it more as the market sets the rent, not the landlord. Just as the market sets the sale value of properties.

And as the one alters so will the other and normally they will track each other quite closely. If they dont then there is something going wrong somewhere.

If as you say there is a growing oversupply of units like yours, what makes you think that its value has really increased? If its value had increased then the sort of rental price you could achieve would also have increased, wouldn't it?

There is usually poor correlation between rents and property values, even in developed countries, 'else you would not see housing bubbles as prices rise beyond fundamentals. The same happens constantly in stock markets with the fluctuating P/E ratios.

[Jerry Cornelius]

Sorry RGS2001UK are u swearing why? i hope they will delete your account from here.

Any ways

Yes condos have maintenance fees usually charged by amount of sqm...

Yes condos normally not rent out 100% of the time lets say u own a condo for 5 years then u lucky if can rent it out 80% of the time so it lowers your rental return average..

Why i need to explain you these basic things ?I thought u was Mr know it all !

yes besides that condos need care and attention A/C breaks down,window leaking , internet lines need be installed etc etc so if u calculate with out all these costs and u have 5 % annual returns then in fact most likely your annual gains will be 3,5 to 4 % now what is not clear for you ?

Yes i have condos with 9 % returns and net 8 % annual...it possible better believe that..

It a matter of doing your homework before you buy a property not afterwards.

Too be honest its hard to know who I am talking to here, you or your "friend"

Posted by you on a previous topic,

My friend sold his property for 7 million BHT.

He now wants to re invest it in such a way he be making 7-10% annual returns

http://www.thaivisa.com/forum/topic/681659-how-to-invest-7-million-bht/#entry7037998

Sorry RGS2001UK are u swearing why? i hope they will delete your account from here.

Not swearing, I have a better command of the English language than that.

Why i need to explain you these basic things ?I thought u was Mr know it all !

No need to explain yourself (or your friend has no need) to explain it all, actually I am not the one coming here asking for advice, but I am more than happy to kow tow to your superior knowledge, should it ever manifest itself.

A/C breaks down,

Why would you install a/c, let the renter install his own, when they leave they take it with them.

internet lines need be installed

Please tell me, who is your target audience, farang or Thai?

How many Thai style apt's have you ever been in, for the life of me I cant remember ever seeing internet installed.

Yes i have condos with 9 % returns and net 8 % annual...it possible better believe that..

Excellent stuff, please enlighten us to whereabouts these condos are, I may consider bowing to your superior knowledege and invest myself.

It a matter of doing your homework before you buy a property not afterwards.

No shit Sherlock.

Head for On Nut, buy 20 condos at 350 k, rent them out for 3k baht per month, no need for a/c or internet.

Lets use your figures, 20 x 3000 x 12 = 720 000

(720 000/7 000 000) x 100 = 10.3 (rounded up), acceptable or not?

The ability to read Thai helps (I feel sure such a shrewd Thai property investor can already read the language).

Good luck with your investments, or should I say good luck to your friend?

Not disputing the point you are making, but please get your arithmatic regarding your statements right first.

By the way, I totally disagree with your argument.

Jerry

[KittenKong]

There is usually poor correlation between rents and property values, even in developed countries, 'else you would not see housing bubbles as prices rise beyond fundamentals. The same happens constantly in stock markets with the fluctuating P/E ratios.

Neither variation seems to be very large to me. Certainly nowhere near as large as the difference between the purchase price of my last property and the sale price (5 times). If I had based my rental prices for that property on the purchase price I would have been looking rather stupid.

I dont worry too much about P/E ratios across entire markets either as the fluctuations dont amount to very much in the long term.

[trogers]

There is usually poor correlation between rents and property values, even in developed countries, 'else you would not see housing bubbles as prices rise beyond fundamentals. The same happens constantly in stock markets with the fluctuating P/E ratios.

Neither variation seems to be very large to me. Certainly nowhere near as large as the difference between the purchase price of my last property and the sale price (5 times). If I had based my rental prices for that property on the purchase price I would have been looking rather stupid.

I dont worry too much about P/E ratios across entire markets either as the fluctuations dont amount to very much in the long term.

Yes, in the long term, trends usually revert to the mean. That is why there are cycles, even for rents.

I have just increased rent last April for my 3-bedroom unit from Bt50k to Bt60k. This was possible due to reduced competition in that location.

[impulse]

One question I always like to ask day traders and real estate moguls is what they pay themselves for their time?

If it's a full time job to net a few thousand dollars a month on an investment, then the return looks a lot different.

Kind of like the guys who saved 100,000 baht "building their own home", but it took a year of toiling with contractors to get it done.

Not at all dissing real estate as an investment- far from it.

But I always wonder how the return would look if the investor had to pay himself a reasonable salary (or hire someone else to do the hard stuff).

Edited November 22, 2013 by impulse

[trogers]

One question I always like to ask day traders and real estate moguls is what they pay themselves for their time?

If it's a full time job to net a few thousand dollars a month on an investment, then the return looks a lot different.

Kind of like the guys who saved 100,000 baht "building their own home", but it took a year of toiling with contractors to get it done.

Not at all dissing real estate as an investment- far from it.

But I always wonder how the return would look if the investor had to pay himself a reasonable salary (or hire someone else to do the hard stuff).

I believe those who handle most things themselves are retirees. Those still holding fulltime jobs would likely have their spouses handle matters, and if they are single, will engage the services of agents.

[impulse]

One question I always like to ask day traders and real estate moguls is what they pay themselves for their time?

If it's a full time job to net a few thousand dollars a month on an investment, then the return looks a lot different.

Kind of like the guys who saved 100,000 baht "building their own home", but it took a year of toiling with contractors to get it done.

Not at all dissing real estate as an investment- far from it.

But I always wonder how the return would look if the investor had to pay himself a reasonable salary (or hire someone else to do the hard stuff).

I believe those who handle most things themselves are retirees. Those still holding fulltime jobs would likely have their spouses handle matters, and if they are single, will engage the services of agents.

Again, I'm not dissing real estate or its investors. Most of the wealthy people I know made a lot of their money on real estate.

Still I often see "return on capital" calculations that omit appreciation, vacancy rate, maintenance costs, tax implications, political risk, marital risk, and the labor required to get those "returns". Leads me to believe it's not a game for the feint of heart, especially in places where the legal system and status of foreigners is a moving target.

Kudos to the guys who are braver than I am.

Edited November 23, 2013 by impulse

[trogers]

One question I always like to ask day traders and real estate moguls is what they pay themselves for their time?

If it's a full time job to net a few thousand dollars a month on an investment, then the return looks a lot different.

Kind of like the guys who saved 100,000 baht "building their own home", but it took a year of toiling with contractors to get it done.

Not at all dissing real estate as an investment- far from it.

But I always wonder how the return would look if the investor had to pay himself a reasonable salary (or hire someone else to do the hard stuff).

I believe those who handle most things themselves are retirees. Those still holding fulltime jobs would likely have their spouses handle matters, and if they are single, will engage the services of agents.

Again, I'm not dissing real estate or its investors. Most of the wealthy people I know made a lot of their money on real estate.

Still I often see "return on capital" calculations that omit appreciation, vacancy rate, maintenance costs, tax implications, political risk, marital risk, and the labor required to get those "returns". Leads me to believe it's not a game for the feint of heart, especially in places where the legal system and status of foreigners is a moving target.

Kudos to the guys who are braver than I am.

After your first investment property, you will gather a feel on 'other costs' and risks and adjust thinking and expectations along the way.

But I still cannot quantify the risk of 'big fish eating small fish', creative accounting and insider trading in the stock market.

[Rakathaorai]

Hahaahah

yes indeed you have alot of imagination

Anyways i just try to gain more knowledge here and share what i know with others in this forum.

I thought that is the purpose of these online forums but if you want be sarcastic fine also..

I think its stupid and ignorant people maybe as your self that never ask advise...

But my free advise for you in this forum is that you should read posts more carefully before you begin to say who is a developer and who is not !

It's advice not advise!

I don't see any forthcoming there however it would be interesting to here in which location you are getting 9% net return (plus hopefully some capital appreciation)

[LennyW]

Hahaahah

yes indeed you have alot of imagination

Anyways i just try to gain more knowledge here and share what i know with others in this forum.

I thought that is the purpose of these online forums but if you want be sarcastic fine also..

I think its stupid and ignorant people maybe as your self that never ask advise...

But my free advise for you in this forum is that you should read posts more carefully before you begin to say who is a developer and who is not !

It's advice not advise!

I don't see any forthcoming there however it would be interesting to here in which location you are getting 9% net return (plus hopefully some capital appreciation)

I'ts hear not here!

[KittenKong]

But my free advise for you in this forum is that you should read posts more carefully before you begin to say who is a developer and who is not !

It's advice not advise!

I don't see any forthcoming there however it would be interesting to here in which location you are getting 9% net return (plus hopefully some capital appreciation)

I'ts hear not here!

That's it's not i'ts, isn't it?

Forum rules advise that it's all neither hear nor their anyway.

[LennyW]

But my free advise for you in this forum is that you should read posts more carefully before you begin to say who is a developer and who is not !

It's advice not advise!

I don't see any forthcoming there however it would be interesting to here in which location you are getting 9% net return (plus hopefully some capital appreciation)

I'ts hear not here!

That's it's not i'ts, isn't it?

Forum rules advise that it's all neither hear nor their anyway.

Just checking to see if anyone was paying attention!