Location Advice: Best area to buy a condo for rental income

[puukao]

Reckless Ron if you have 750k and want 7500 a month have a look at JC Hill Place on Canal Road close to Maya. Good management, will be painted, pool to be renovated. Many now rented at 7500/8000. Don't let negative people put you off old condo blocks.

Sent from my GT-N7100 using Thaivisa Connect Thailand mobile app

Looked at 2 studios today in JC Hill Place. Both recent reno's - one with no balcony at 905k and one with at 1050k. Suggested rent 8k, but 7k more likely I feel.

Tatty building and from answers to questions, desperately needed repainting not happening any time soon and pool re-opening maybe late 2015 if lucky.

Not a very good location in my view and unexciting. Perhaps that makes me a 'negative person' but sometimes hard to distinguish between realistic and negative?

Time will tell.

so 1 million baht for 7,000 baht a month. so 84,000 baht a year on a million. that is 8.4%. that is the max, i'm guessing. OK, now we have condo fees, maintenance, maybe an eviction now and then, and possibly furniture and tons of other stuff i forgot. not sure if there is a property tax. i'm also assuming no mortgage.

in america, you can get almost risk-free municipal bonds for a tax-equivalent yield of about 7%. and yields are pretty low from a historical perspective.

i wonder if you could buy a place for say 500,000 baht and try to rent it out for say 5,000 baht. ah, i don't know. but i do think you will get better margins at a lower-priced asset. unless, of course, you want to live there after you are done renting.

my 1.09 cents. likely worth only half that.

[beau thai]

Reckless Ron if you have 750k and want 7500 a month have a look at JC Hill Place on Canal Road close to Maya. Good management, will be painted, pool to be renovated. Many now rented at 7500/8000. Don't let negative people put you off old condo blocks.

Sent from my GT-N7100 using Thaivisa Connect Thailand mobile app

Looked at 2 studios today in JC Hill Place. Both recent reno's - one with no balcony at 905k and one with at 1050k. Suggested rent 8k, but 7k more likely I feel.

Tatty building and from answers to questions, desperately needed repainting not happening any time soon and pool re-opening maybe late 2015 if lucky.

Not a very good location in my view and unexciting. Perhaps that makes me a 'negative person' but sometimes hard to distinguish between realistic and negative?

Time will tell.

so 1 million baht for 7,000 baht a month. so 84,000 baht a year on a million. that is 8.4%. that is the max, i'm guessing. OK, now we have condo fees, maintenance, maybe an eviction now and then, and possibly furniture and tons of other stuff i forgot. not sure if there is a property tax. i'm also assuming no mortgage.

in america, you can get almost risk-free municipal bonds for a tax-equivalent yield of about 7%. and yields are pretty low from a historical perspective.

i wonder if you could buy a place for say 500,000 baht and try to rent it out for say 5,000 baht. ah, i don't know. but i do think you will get better margins at a lower-priced asset. unless, of course, you want to live there after you are done renting.

my 1.09 cents. likely worth only half that.

'almost risk-free muni-bonds' ?? Can you really get almost risk free returns of 7% in a sophisticated economy/market? Surely risk/reward sets the rate?

How do Muni bond holders in Detroit feel right now?

[puukao]

Reckless Ron if you have 750k and want 7500 a month have a look at JC Hill Place on Canal Road close to Maya. Good management, will be painted, pool to be renovated. Many now rented at 7500/8000. Don't let negative people put you off old condo blocks.

Sent from my GT-N7100 using Thaivisa Connect Thailand mobile app

Looked at 2 studios today in JC Hill Place. Both recent reno's - one with no balcony at 905k and one with at 1050k. Suggested rent 8k, but 7k more likely I feel.

Tatty building and from answers to questions, desperately needed repainting not happening any time soon and pool re-opening maybe late 2015 if lucky.

Not a very good location in my view and unexciting. Perhaps that makes me a 'negative person' but sometimes hard to distinguish between realistic and negative?

Time will tell.

so 1 million baht for 7,000 baht a month. so 84,000 baht a year on a million. that is 8.4%. that is the max, i'm guessing. OK, now we have condo fees, maintenance, maybe an eviction now and then, and possibly furniture and tons of other stuff i forgot. not sure if there is a property tax. i'm also assuming no mortgage.

in america, you can get almost risk-free municipal bonds for a tax-equivalent yield of about 7%. and yields are pretty low from a historical perspective.

i wonder if you could buy a place for say 500,000 baht and try to rent it out for say 5,000 baht. ah, i don't know. but i do think you will get better margins at a lower-priced asset. unless, of course, you want to live there after you are done renting.

my 1.09 cents. likely worth only half that.

'almost risk-free muni-bonds' ?? Can you really get almost risk free returns of 7% in a sophisticated economy/market? Surely risk/reward sets the rate?

How do Muni bond holders in Detroit feel right now?

"almost" risk-free implies not at the same level as a Treasury bond, but AAA or aa or even a rated paper.

i'm not talking about junk paper that trades at 80 (100 is par) and goes out 30 years.

double-tax exempt means quite a bit.

just go to municipal bonds dot com and check it out.

ten year note now around 2.70. high-quality munis on a TEY (tax equiv. yield) is around 7, give or take a little bit.

buying a condo in CM is more risky, in my opinion.

here is a New Issue, so on the lower-end of what's out there

6.2 TEY. it's not the best, but there are plenty around 7% still available to buy.

NEVADA ST CAP IMPT AND CULTURAL AFFAIR 04.00000% 04/01/2033BDS SER. 2014A 4.000 04/01/2033 AA2 AA AA2 -- 101.807 3.780 No 6.259 OPEN ORDER PERIOD 04/22/2014 IR SFP Edited April 8, 2014 by puukao

[WinnieTheKhwai]

Also I am looking at paying anywhere between 600,000 and 1.2M depending mainly on market rental demand and value based on its location. And for those that don't know it there are LOTS of available units in that price range (so many that a lot of people would see this as a bad 'investment', eh, but I'm here for the long run).

Could you show us one website link where there are "LOTS" of units in the 600-1.2 range?

ddproperty.com

( They're all in horrific buildings, but they're there. )

Edited April 9, 2014 by WinnieTheKhwai

[WinnieTheKhwai]

Reckless Ron if you have 750k and want 7500 a month have a look at JC Hill Place on Canal Road close to Maya. Good management, will be painted, pool to be renovated. Many now rented at 7500/8000. Don't let negative people put you off old condo blocks.

Sent from my GT-N7100 using Thaivisa Connect Thailand mobile app

Looked at 2 studios today in JC Hill Place. Both recent reno's - one with no balcony at 905k and one with at 1050k. Suggested rent 8k, but 7k more likely I feel.

Tatty building and from answers to questions, desperately needed repainting not happening any time soon and pool re-opening maybe late 2015 if lucky.

Not a very good location in my view and unexciting. Perhaps that makes me a 'negative person' but sometimes hard to distinguish between realistic and negative?

Time will tell.

so 1 million baht for 7,000 baht a month. so 84,000 baht a year on a million. that is 8.4%. that is the max, i'm guessing. OK, now we have condo fees, maintenance, maybe an eviction now and then, and possibly furniture and tons of other stuff i forgot. not sure if there is a property tax. i'm also assuming no mortgage.

in america, you can get almost risk-free municipal bonds for a tax-equivalent yield of about 7%. and yields are pretty low from a historical perspective.

i wonder if you could buy a place for say 500,000 baht and try to rent it out for say 5,000 baht. ah, i don't know. but i do think you will get better margins at a lower-priced asset. unless, of course, you want to live there after you are done renting.

Well, a friend of mine did exactly that. Same building we're talking about too. Except it's not renting out at 5000. People just don't want to live in run down building it seems, that's a walk up the Canal Road. (Although for some the deal breaker may have been that there was no ADSL internet included. If you rent out anything these days there better be Internet; it's about as essential as water and electricity.)

Edited April 9, 2014 by WinnieTheKhwai

[Thighlander]

Also I am looking at paying anywhere between 600,000 and 1.2M depending mainly on market rental demand and value based on its location. And for those that don't know it there are LOTS of available units in that price range (so many that a lot of people would see this as a bad 'investment', eh, but I'm here for the long run).

Could you show us one website link where there are "LOTS" of units in the 600-1.2 range?

ddproperty.com

( They're all in horrific buildings, but they're there. )

When I first found that site; I thought I had finally found a good site. So many old listings, half the people never return your email, and quite a few are people selling their contracts. Then there is good ole Uncle V........

[elektrified]

Also I am looking at paying anywhere between 600,000 and 1.2M depending mainly on market rental demand and value based on its location. And for those that don't know it there are LOTS of available units in that price range (so many that a lot of people would see this as a bad 'investment', eh, but I'm here for the long run).

Could you show us one website link where there are "LOTS" of units in the 600-1.2 range?

ddproperty.com

( They're all in horrific buildings, but they're there. )

Right. We looked at a condominium about a month ago (just for the heck of it since it was so dirt cheap) near Lanna Hospital. It was 450K THB. What a dump! I mean it was in a total sa-lam (slum) with leaky, run down buildings all around and dozens of factory workers and tattooed Tai Yai sitting outside drinking booze and eating meatballs. There is no way anyone would have paid more than 2,000 THB per month in rent.

And...it needed tons of work to make it even liveable. Perhaps 300K THB or more worth of work. I doubt anything had been done to it in more than 20 years.

Edited April 9, 2014 by elektrified

[worgeordie]

You have to remember,the 7K rent would be gross, if doing everything legally you have

to pay 15% tax,then if you use agent they will take 1 months rent as fee,then you have

upkeep and repairs,tenants calling you anytime in day or night wanting something fixed.

Theres a lot of downside,renting on paper is great,its the tenants that spoil it !,you don't

just collect the rent every month,theres work,stress and headaches involved.and for 7K

pm gross think carefully,sorry for been so negative,but better to know what you are getting

into.

regards Worgeordie

[Thighlander]

That's why I suggested the 40-50% rule, earlier.

[elektrified]

You have to remember,the 7K rent would be gross, if doing everything legally you have

to pay 15% tax,then if you use agent they will take 1 months rent as fee,then you have

upkeep and repairs,tenants calling you anytime in day or night wanting something fixed.

Theres a lot of downside,renting on paper is great,its the tenants that spoil it !,you don't

just collect the rent every month,theres work,stress and headaches involved.and for 7K

pm gross think carefully,sorry for been so negative,but better to know what you are getting

into.

regards Worgeordie

People don't realize that the 15% tax has to be paid. There was a guy who was a forum member years ago, who was banned, who used to openly brag on here that he never paid any tax on his rental properties. The g/f's mother has an apartment building with 10 or 11 apartments. There is a book hanging outside and I don't know how often they come, but the government comes along to collect the tax on the rentals. It really burns her up when she hears from people around her moobaan or in the city about farang landlords of condominiums that don't pay tax.

[Thighlander]

You have to remember,the 7K rent would be gross, if doing everything legally you have

to pay 15% tax,then if you use agent they will take 1 months rent as fee,then you have

upkeep and repairs,tenants calling you anytime in day or night wanting something fixed.

Theres a lot of downside,renting on paper is great,its the tenants that spoil it !,you don't

just collect the rent every month,theres work,stress and headaches involved.and for 7K

pm gross think carefully,sorry for been so negative,but better to know what you are getting

into.

regards Worgeordie

People don't realize that the 15% tax has to be paid. There was a guy who was a forum member years ago, who was banned, who used to openly brag on here that he never paid any tax on his rental properties. The g/f's mother has an apartment building with 10 or 11 apartments. There is a book hanging outside and I don't know how often they come, but the government comes along to collect the tax on the rentals. It really burns her up when she hears from people around her moobaan or in the city about farang landlords of condominiums that don't pay tax.

and technically all those who buy/bought with lease agreements have to pay, also. It just never gets collected, but when I was in that situation, I was a little concerned about it piling up over the years...and there could be penalties & interest, too. I was always assured that it wouldn't happen. An apartment building is a registered business, almost like a hotel..so they are sitting ducks. In Phoenix, if you had three or fewer units (and self managed); you were exempt from the rental tax. Has anyone ever seen it added on to their rent in apartment complexes? Or do the landlords pay it here?

[WinnieTheKhwai]

Also I am looking at paying anywhere between 600,000 and 1.2M depending mainly on market rental demand and value based on its location. And for those that don't know it there are LOTS of available units in that price range (so many that a lot of people would see this as a bad 'investment', eh, but I'm here for the long run).

Could you show us one website link where there are "LOTS" of units in the 600-1.2 range?

ddproperty.com

( They're all in horrific buildings, but they're there. )

Right. We looked at a condominium about a month ago (just for the heck of it since it was so dirt cheap) near Lanna Hospital. It was 450K THB. What a dump! I mean it was in a total sa-lam (slum) with leaky, run down buildings all around and dozens of factory workers and tattooed Tai Yai sitting outside drinking booze and eating meatballs. There is no way anyone would have paid more than 2,000 THB per month in rent.

And...it needed tons of work to make it even liveable. Perhaps 300K THB or more worth of work. I doubt anything had been done to it in more than 20 years.

Yeah, AND near Lanna Hospital, so even outside the superhighway ring. It completely baffles me why high-rises make sense in the middle of B.F-Nowhere. Renters are looking at joining the traffic mess of Khuang Singh intersection (or Mae Jo Rd intersection) to even get past the superhighway and into town.

At least something like Wang Sing Kham Mansion is on the inside of the super highway ring. But I still wouldn't want to live there.

Anyway I don't mind run down if it's in a central area. Central area means I can WALK to the city moat (preferably Thapae Gate / Moon Muang side) in under half an hour.

Someone asked if I considered Maya downtown.. I've never set foot in there as the traffic at Rincome intersection is not something I ever want to experience and especially not on a daily basis. This of course extends to places like the Hillside Condominium on Huay Kaew, which is reasonable enough to get INTO town, but becomes quite difficult to get back there again, as you're now sentenced to a lifetime of negotiating RIncome intersection / Superhighway.

And with the new Nimmanhaemin condominiums, this will get worse. A lot worse. Potentially a traffic melt-down of Bangkokian proportions. Everyone seems hell-bent of creating a miniature Bangkok around Nimmanhaemin.

EDIT: Please tell me though if/when I reach Beetlejuice-like levels of negativity. It is strangely satisfying to do a nay-saying rant.. I should get a walking stick to shake while saying it.

Edited April 9, 2014 by WinnieTheKhwai

[onthedarkside]

You have to remember,the 7K rent would be gross, if doing everything legally you have

to pay 15% tax,then if you use agent they will take 1 months rent as fee,then you have

upkeep and repairs,tenants calling you anytime in day or night wanting something fixed.

Yes, my wife has many rental properties and she has to pay the property rental tax. More like 12% of rental income and there is a lot of wiggle room such as allocate a portion to the building and a portion to furnishing (my wife allocates 50/50) and only the tax is paid on the building rent. Don't forget to register occupancy or not at your area Tesibaan office, as if vacant no tax need be paid.

As for a 30 year lease, I had one of those in my early days as expat in Thailand. I had to pay the landlord (of the ground) tax burden on the 30 year lease payment. It was built into the lease agreement, leaser pays all taxes. So the tax per year was the payment for the 30 year lease (of the land only/not the building cost) divided by 30 and multiple by 12%

//edit - and contrary to a post just above. These taxes ARE collected

[worgeordie]

You have to remember,the 7K rent would be gross, if doing everything legally you have

to pay 15% tax,then if you use agent they will take 1 months rent as fee,then you have

upkeep and repairs,tenants calling you anytime in day or night wanting something fixed.

Yes, my wife has many rental properties and she has to pay the property rental tax. More like 12% of rental income and there is a lot of wiggle room such as allocate a portion to the building and a portion to furnishing (my wife allocates 50/50) and only the tax is paid on the building rent. Don't forget to register occupancy or not at your area Tesibaan office, as if vacant no tax need be paid.

As for a 30 year lease, I had one of those in my early days as expat in Thailand. I had to pay the landlord (of the ground) tax burden on the 30 year lease payment. It was built into the lease agreement, leaser pays all taxes. So the tax per year was the payment for the 30 year lease (of the land only/not the building cost) divided by 30 and multiple by 12%

//edit - and contrary to a post just above. These taxes ARE collected

Yes they are collected,and as the Government seems to be short of cash to pay all kinds of things,

they will be looking for every possible way to collect tax,in past years officials have been around our

MooBahn asking if there are any Farangs renting property,and maybe a lot of landlords don't know

if your tenant is Farang ,you have to register them at immigration,failure to do so results in a fine.

regards Worgeordie

[WinnieTheKhwai]

^ any non-Thai national actually. Farang or not doesn't matter.

[Thighlander]

You have to remember,the 7K rent would be gross, if doing everything legally you have

to pay 15% tax,then if you use agent they will take 1 months rent as fee,then you have

upkeep and repairs,tenants calling you anytime in day or night wanting something fixed.

Yes, my wife has many rental properties and she has to pay the property rental tax. More like 12% of rental income and there is a lot of wiggle room such as allocate a portion to the building and a portion to furnishing (my wife allocates 50/50) and only the tax is paid on the building rent. Don't forget to register occupancy or not at your area Tesibaan office, as if vacant no tax need be paid.

As for a 30 year lease, I had one of those in my early days as expat in Thailand. I had to pay the landlord (of the ground) tax burden on the 30 year lease payment. It was built into the lease agreement, leaser pays all taxes. So the tax per year was the payment for the 30 year lease (of the land only/not the building cost) divided by 30 and multiple by 12%

//edit - and contrary to a post just above. These taxes ARE collected

They never collected mine at BWT, and when I cancelled the lease, the moment we sold, the subject didn't come up whatsoever. My lease was 500K for thirty years, so it would have only been under 2000 thb per year..but mole hills turn into mountains on unpaid taxes.

[onthedarkside]

You have to remember,the 7K rent would be gross, if doing everything legally you have

to pay 15% tax,then if you use agent they will take 1 months rent as fee,then you have

upkeep and repairs,tenants calling you anytime in day or night wanting something fixed.

Yes, my wife has many rental properties and she has to pay the property rental tax. More like 12% of rental income and there is a lot of wiggle room such as allocate a portion to the building and a portion to furnishing (my wife allocates 50/50) and only the tax is paid on the building rent. Don't forget to register occupancy or not at your area Tesibaan office, as if vacant no tax need be paid.

As for a 30 year lease, I had one of those in my early days as expat in Thailand. I had to pay the landlord (of the ground) tax burden on the 30 year lease payment. It was built into the lease agreement, leaser pays all taxes. So the tax per year was the payment for the 30 year lease (of the land only/not the building cost) divided by 30 and multiple by 12%

//edit - and contrary to a post just above. These taxes ARE collected

They never collected mine at BWT, and when I cancelled the lease, the moment we sold, the subject didn't come up whatsoever. My lease was 500K for thirty years, so it would have only been under 2000 thb per year..but mole hills turn into mountains on unpaid taxes.

In my case I bought the balance of the 30 lease about 5 years into that lease, never thought about taxes then a couple of years later I was hit with 7 years of back taxes. Sure it was not such a big money amount, just saying it eventually needs to be paid by someone.

[Thighlander]

were there penalties and/or interest?