best condo to buy to rent ? where for best return. 3.5 budget.

[RickvanHeijningen]

Try before you buy

https://www.facebook.com/groups/1411744682370576/

Move into your new home straightaway and rent it, giving you time to decide to buy.

Would you like a new home, but you’re not sure it’s the right time? Or maybe saving for a deposit whilst renting is proving too difficult. Getting a mortgage is not always easy, even at the best of times.

Well, here’s a great idea that may be just up your street called 'Try before you buy'. If you choose to buy, you get up to your first 12 months’ rent towards your deposit.

Win, win, win

You get the home you want – no waiting, no messing around, no fuss. Plus you get time to find the mortgage that’s right for you while saving for your deposit. You get the opportunity to live in your new home, to see if it really does live up to your expectations. Not just the house itself, but the location, everything.

'Try before you buy' is such a good opportunity for lots of people who are unsure whether to buy right now. And for those of you whose temporary and financial circumstances are making it extra difficult, we’re sure this innovative scheme will be a real help. In the meantime, you can sit back and enjoy your new home safe in the knowledge that your rent isn’t being wasted as it can go towards your deposit.

How it works

You sign up to a rental agreement (it’s called an assured shorthold tenancy) which is simply the legal contract between you and us. The level of rent will be set at the current market value, so it’s a completely reasonable rent – what you would pay anyway.

When you move in, all you’ll need is the first month’s rent plus another month’s rent as a deposit. When you sign up to your rental agreement you also secure the option to purchase at an agreed price. Your rent can only be used towards a deposit and is non refundable. And that’s it

[seancbk]

What return do you want? Based on 3.5M here's the numbers - gross before expenses and assuming 100% occupancy.

Monthly Rent Annual Rent % p.a. Return

10,000 120,000 3.42%

12,000 144,000 4.11%

15,000 180,000 5.14%

20,000 240,000 6.86%

30,000 360,000 10.29%

As you're unlikely to get 30k rent on a 3.5M condo (more like 12-15,000) and it would be unlikely to maintain 100% occupancy, the best return you could probably expect on average after allowing for reduced occupancy and expenses will be circa 4%.

Plus you have the drama of trying to release your capital eventually by selling the condo, and of course it will be a seller's market for years to come (joke).

I know 4 people that have done this and all regretted it with a passion. One chap owns three condos and is virtually cashflow destitute because he can't sell them and can't get regular tenants. Russian tenants trashed one of them last year and he can't afford to get it repaired. Another chap is getting 25,000 baht a month on a shop building he paid 17M for and can't give it away at 12M. His return is a massive 1.76%. p.a.

A return of arguably 4% is hardly worth the risk compared to a bank deposit, unless you want to hang your hat on capital gains and appreciation of the Baht over the next 3 to 5 years. I wouldn't, but then I'm naturally averse to residential property for investment purposes.

Three or four mill is a decent sum - consider the sharemarket balanced with TD's for a better return, not much more risk if done wisely, and certainly much more liquid.

EDIT: I should balance this with another aquaintance who I know very casually, but seems believable. He claims to have 8 condos and works them like a business. He's constantly networking friends overseas to be casual holiday tenants in some of them at inflated rents and also runs a website with online bookings/reservations etc. He essantially runs it like a business and is always on the hunt for tenants - to the point that he can become a nuisance to his resident friends/aquaintances. He claims to make over 1.5M a year, but I have no idea what the overall value of the condos are. If I assumed total value at say 18M, his return would be 8.33% p.a.

Interesting numbers.

The OP (and anyone else with property for rent in Thailand) may want to look at doing what Gsxrnz talks about and run it as a business. Take a look at Airbnb.com if you can deal with short term rentals of between 2-10 or so days, then you can charge way over the odds for people to stay. Getting bookings is down to location and how well you promote your unit. Some people do a very good job of it and subsequently have pretty good occupancy rates.

Your mileage may vary of course.

[sulasno]

I have condo for sale at 3.65 m and can be rented out at 15k a month

[ggt]

Currency...left in a bank...is actually losing money...

Investing wisely in a commodity is a good hedge against inflation...

I don't know where you live so it is hard to speak of the future of the condo market there...I have had good luck...buying, renting, and selling condos in LOS...common sense...attention to detail...so as not to get scammed...applies...

Another...good investment...is gold...or silver...can purchase gold locally...or both online...the price of both are depressed at the moment...and have great potential to the upside...over the next few years...as fiat currency goes south and inflation goes north...

Kitco.com...and many others...give a moment by moment...of what is called...the "spot price"...of precious metals...you will have to pay a "premium" above the spot price to purchase...if you purchase enough...you may get free shipping...

Also, there are many companies that can either store your metals...or ship them to someone who can...if you do not want to take delivery...

Good luck!

[dotpoom]

3.5 budget maybe stretch to 4 , doing some homework on this first . bang saray ? bangkok ? ban chang ? rayong ?

definately not jomtien !!!!!!

Don't know why you say the above. I have a 101 Sq. Mtr condo in Jomtien. High season I get 50,000 a month for it. Low season I was asking for 35,000 a month but the agent lets it out for 30,000 a month (I don't argue with her, I'm not pushed either way and she gets me the good price). I have it on the market for 4.5 MB. If an agent wants to sell it they can add on the commission. I am not worried if it sells or not, am very happy with the rent I get and not too sure about keeping that amount of money in the bank in Thailand under the present circumstances.

I was interested reading Gsxrnx post...I never really got the hang of how to work out the return in percentages. It always amuses how seriously people delve into the figures and forecast returns, I have never done that or learned how to do it. If I seen a condo that I would like to live in I would buy it for that reason alone and never think about what returns I can get from it........... Have not made a bad buy yet.

[JohnMintra]

Does anybody know if the banks deduct tax on behalf of the Govt on interest earned?

[mrfaroukh]

Keep your money in cash. You never know when you need it. Once you buy it is for you almost life time unless you sell it at big loss.

[KittenKong]

Does anybody know if the banks deduct tax on behalf of the Govt on interest earned?

They do. Some can be claimed back, depending on your individual circumstances.

[KittenKong]

I have condo for sale at 3.65 m and can be rented out at 15k a month

I have a 101 Sq. Mtr condo in Jomtien. High season I get 50,000 a month for it. Low season I was asking for 35,000 a month but the agent lets it out for 30,000 a month ....... I have it on the market for 4.5 MB.

Hard to imagine how one could get two situations more different and yet so similar. I suppose that both reports are true (and I have no reason to doubt them though the first one does bear much more resemblance to things I have experienced myself than the second one does).

But if they are both true then I dont want anything to do with a market that is so bizarre.

[Strangebrew]

Open a bar free beer and poddy tat less bribes to BIB Profit 30% on investment.And still buy condo for self to live in.

[GOLDBUGGY]

Cash is King!

I agree you need to get a better return on your money but why would you want to go into Real Estate? There are just so many problems associated with this especially you being a Farang! I mean from that nice couple that walked away with your TV Set! Or couldn't pay their rent that month. Or looking for renters all the time in the low season. Or trying to get out of it later and sell your Condo, when the market is flooded with them for the same reason as yours. I do agree it works for some people but not for me.

So..."No Thanks!"

Why not invest it into some Good Paying Dividend Stocks? Not sure about Thailand but Banks and Utilities Stocks usually pay fare Dividends and are pretty safe to invest in. I own one now that has paid Dividends for over 10 years without fail and is now paying about 9%. After Taxes it works out to be 7.65% and it is safe as they get. No muss or fuss either.

There must be some banks in Thailand that pay quite well and for sure more than a saving account. After all, they are using your money to make theirs. Bank Stocks are also as good as cash, when it comes to selling in a hurry.

[properperson]

3.5 budget maybe stretch to 4 , doing some homework on this first . bang saray ? bangkok ? ban chang ? rayong ?

definately not jomtien !!!!!!

have sent you a pm......

[zig]

Consider that you usually need to invest also in furniture, air conditioners, TV, fridge, washing machine etc. to rent it out and this stuff will just keep depreciating.

[bennooitbezig]

Just Google Pattayaparcs. It's a Dutch based company and only work with condos. A guaranteed 6% net tax free. They do all maintaince, cleaning, payments etc. Also they will buy it back if you need the money.

[DavidMavec]

Just Google Pattayaparcs. It's a Dutch based company and only work with condos. A guaranteed 6% net tax free. They do all maintaince, cleaning, payments etc. Also they will buy it back if you need the money.

Their website looks a bit shady to me, what can you say about them?

[KittenKong]

Just Google Pattayaparcs. It's a Dutch based company and only work with condos. A guaranteed 6% net tax free. They do all maintaince, cleaning, payments etc. Also they will buy it back if you need the money.

From a new TV member in his first post.

[RAZZELL]

My condo in Sukhumvit cost approx. 60,000 baht per square m.. It's 2 br, 2 bath, 65 sqm. Paid 3.9 mill baht (fully furnished). 9 Floor building, well maintained, top-floor condo, city views from living area and both b'rs.., lots of natural light during day...Pool and functional gym, 6 mins walk to BTS, walking distance to golf driving range. 7/11 downstairs, BIG C close by, plenty of quailty / cheap food options close by.

Bought it 4 yrs ago, lived / living in it. Love it. Have rented it out for 30,000 baht per month for 12 months and had no problems there at all. For the (foreign) tenant, I covered / paid 500 baht month for unlimited internet, about 3,000 annual for Happy Home Cable TV... 27,000 baht nnual for condo management fees, about 1500 baht month for electricity (3 a/c's on all day during hot season) - virtually zero for electricity during cooler months, 200 baht month for water.

Even if there is no capital growth or I can't / don't want to sell it.., I'm still able to get better than 8 % annual ROI should I choose that as an option..

Yes, there are horror stories, but if you look around, pick the right place (location & building maintenance) in a nice / convenient area then you can do OK. If nothing else, you (or your family) will always have a nice, cheap to live and easy place to stay. :-)

What condo building?

RAZZ

[RAZZELL]

What return do you want? Based on 3.5M here's the numbers - gross before expenses and assuming 100% occupancy.

Monthly Rent Annual Rent % p.a. Return

10,000 120,000 3.42%

12,000 144,000 4.11%

15,000 180,000 5.14%

20,000 240,000 6.86%

30,000 360,000 10.29%

As you're unlikely to get 30k rent on a 3.5M condo (more like 12-15,000) and it would be unlikely to maintain 100% occupancy, the best return you could probably expect on average after allowing for reduced occupancy and expenses will be circa 4%.

Plus you have the drama of trying to release your capital eventually by selling the condo, and of course it will be a seller's market for years to come (joke).

I know 4 people that have done this and all regretted it with a passion. One chap owns three condos and is virtually cashflow destitute because he can't sell them and can't get regular tenants. Russian tenants trashed one of them last year and he can't afford to get it repaired. Another chap is getting 25,000 baht a month on a shop building he paid 17M for and can't give it away at 12M. His return is a massive 1.76%. p.a.

A return of arguably 4% is hardly worth the risk compared to a bank deposit, unless you want to hang your hat on capital gains and appreciation of the Baht over the next 3 to 5 years. I wouldn't, but then I'm naturally averse to residential property for investment purposes.

Three or four mill is a decent sum - consider the sharemarket balanced with TD's for a better return, not much more risk if done wisely, and certainly much more liquid.

very very good solid advice, i like replies like this. common sense . thankyou

Dunno if this bloke owns all them but has 35 condos listed.

https://www.airbnb.co.uk/users/show/6550953

RAZZ

[kranuan]

1,2m 29sqm fully furnished renting out for 9000baht a month 100% occupancy since completed 2 years ago..

location location.. =)

1.2 M 100% occupancy. 9000 x 12 = 108.000 per annum , take off maintanence charges , what are you left with ?

looks like too much of a gamble to me.

[kranuan]

Open a bar free beer and poddy tat less bribes to BIB Profit 30% on investment.And still buy condo for self to live in.

<deleted>....there is allways one isnt there

[falkan]

I have condo for sale at 3.65 m and can be rented out at 15k a month

that is really really bad!

[KittenKong]

I have condo for sale at 3.65 m and can be rented out at 15k a month

that is really really bad!

Quite similar figures to a unit I rented for two years. So I would describe it as a normal price.

To pay more than 5% of the sale price as rent seems insane to me given the vast oversupply of condos everywhere and the current global economic situation. And it's not limited to condos: I saw an agency ad just the other day for a house for sale at 24MB or for rent at 90K/month. The sums are easy to do.

[falkan]

I have condo for sale at 3.65 m and can be rented out at 15k a month

that is really really bad!

Quite similar figures to a unit I rented for two years. So I would describe it as a normal price.

To pay more than 5% of the sale price as rent seems insane to me given the vast oversupply of condos everywhere and the current global economic situation. And it's not limited to condos: I saw an agency ad just the other day for a house for sale at 24MB or for rent at 90K/month. The sums are easy to do.

insane? nope it's all about location and brand nowadays if you have that you will get 7-10% easy!

[KittenKong]

insane? nope it's all about location and brand nowadays if you have that you will get 7-10% easy!

Not from anyone with a brain you wont!

There is no shortage of good units in good locations anywhere in Thailand that I know of.

[belg]

one has to wonder why the deposit guarantee is to drop to only 1 million , making it very risky of having all in one bank

some read the fortune cookie that a crash is imminent ?