Bangkok Condo investment

[mccw]

A contradiction in terms in some peoples opinion 55.

But despite the bluster I like to know from peoples experience:

- how is the market at top end rentals- targeting international company employees on placement.

- best locations for this.

- prices ball park for purchase and rental / what to expect.

- particular quality buildings/ developments of note.

- any "second hand" buildings of quality where yields might be higher on rental than a "New" purchase?

I am not expecting huge returns around 4 to 5% on a new build or maybe 6-7% on a second hand.

Looking at it as an easy and less hassle way to produce bht income from a physical asset . Hold period 5 years or so - it doesn't matter.

I saw one place in passing the other for example near Nana BTS ; almost finished; 108sqm , 2 bed and living room for on the way to 20million bht- 34th floor- brand new , great facilities- they said expected rental value of around 75k to 80k pm. Is that realistic?

Cheers

[mccw]

Test test

[Senechal]

108sqm for 20 million baht is not realistic. There are no shortage of larger units for a third of that price in similar areas. And Nana is sketchy as you know.

If it's a mint condition, incredible unit, offer 10-12 million baht. If they laugh at you, laugh back.

And never ever believe a seller's assessment or prediction of rental revenue. Ever.

Edited May 1, 2014 by Senechal

[wordchild]

I don't think the numbers really work in Bangkok for this anymore, a combination of overbuild, tighter or zero inflation expat accom budgets and developers hyping new build prices (like the one you saw) mean that yields have fallen. I am told 3 to 4% if you can let is more the norm at the high end. It may work at 5% if you can find a good well maintained older building near to the sky train but there are few of these. More or less,as a rule of thumb, if you take the sqm size and half it, then that will equate in baht thousands to what you could get as a monthly rent for a new top end well located condo close to sky train and close to the CBD. eg 108 sqm 54k is realistic if a desirable well decorated and furnished unit. Though frankly In the Nana area this maybe ambitious, many expats with families just wont live there. As advised above ,do not believe a word of what the agents or the developer say about future rental returns. They will be economical with the truth to say the least.

Edited May 1, 2014 by wordchild

[MeowBundit]

Nana... never

I know my friend's 100 sq.m condo in Asoke cost about 100k per month in 10 year old building. But this is exception and you can look tenant for months...

IMO I better split this amount and buy 3 condo units with 20-25k rental rate. In different districts.

[Tmymaimee]

Would you not be better off invention in a Real Estate Income Trust? Someone else does all the legwork and your risk is far more spread out across different countries, currencies, etc. Plus, you can leverage out your capital for a better return over the long term. I know a few worthwhile if you want to PM me.

My ex-wife receives 100,000 per month from Wong Amat, Pattaya on 20 million....but they're not always rented plus the headaches of looking after them. I think people that have tried both end up going with a trust. Simple, equal or better return and lower risk. Sorry if you wanted something more on-topic.

[mccw]

Thanks for all posts.

Btw I only mentioned the Nana condo as example because I wali g past on way to the UK visa offices in the "Trendy" office tower- not that I love to hang out around there or anything. It looked a lot less seedy than it was the last time I passed 10 years ago though that's for sure.

[mccw]

So ; please - what is the most desirable locations to live/ rental demand in do you think then?

[Senechal]

The bigger question is, are we about to hit the top of the cycle. (Or have we already hit it).

Thailand's GDP growth this year is looking anemic and household debt has stalled. Chinese buyers are suddenly a giant question mark as China slows rapidly and the Yuan devalues. The hordes of Russian buyers in Pattaya and Phuket are another giant question mark as the Ruble tanks under European sanctions. Australia looks positively ill. The US housing market is down 3 months in a row. And with ASEAN about to come online, there are about to be multitudes of new beach and island developments everywhere. All of which makes me cautious about Thailand. (And that's besides the ballooning of residential units under construction and the political uncertainty on top of it all).

My two baht of course. Predicting macro-economics is a fools game at best... and we can only hope to be the best of fools.

So ; please - what is the most desirable locations to live/ rental demand in do you think then?

I would pay less attention to neighborhood, and more attention to proximity to BTS stations. The BTS has changed all the rules of Bangkok neighborhoods. Traffic in Bangkok is only going to get worse.

Edited May 1, 2014 by Senechal

[ezzra]

From an RE investor who has several mid range units for rent, the bottom line is that the

market is saturated with newly built condos and houses, competition is fierce rental fees are

weak, in short, no money to be made here to cover investment and expenses...

[fletchsmile]

Personally for the returns you're looking at, I'd prefer REITs as mentioned above. Much less hassle and much more liquid.

200k per square metre sounds expensive for Nana area. If the 20mio price tag is realistic - not sure it is - then the yield is reasonable. Personally I wouldn't be paying 80k a month for a 2 bed on Sukhumvit, especially Nana, but each to their own. That suggests something really nice. Sukhumvit has plenty older places a cheaper rents than that for larger places - often seemed to be Indian owned.

Quite a lot of competition in that area.

Cheers

Fletch

[MichaelJohn]

I personally think more cheaper condo's give a better investment.

You can buy good 45/50 SqM condo's for B2-2.5M and get B15k per month return (7%). Of course the "market" for B15k per month is far greater than that paying B100k per month and hence less likely to have empty property.

[aussiebebe]

Thanks for all posts.

Btw I only mentioned the Nana condo as example because I wali g past on way to the UK visa offices in the "Trendy" office tower- not that I love to hang out around there or anything. It looked a lot less seedy than it was the last time I passed 10 years ago though that's for sure.

Less seedy? You mean Sukhumvit soi 13? I beg to differ. There are several table stalls selling all manner of sex toys - they weren't even there just a few years ago. I'd say things have become seedier.

[mccw]

Thanks for all posts.

Btw I only mentioned the Nana condo as example because I wali g past on way to the UK visa offices in the "Trendy" office tower- not that I love to hang out around there or anything. It looked a lot less seedy than it was the last time I passed 10 years ago though that's for sure.

Less seedy? You mean Sukhumvit soi 13? I beg to differ. There are several table stalls selling all manner of sex toys - they weren't even there just a few years ago. I'd say things have become seedier.

But the huge big grimey concrete block of whore bars seems to have disappeared. More cafés and restaurants around. Generally come up market a bit it looked like to me. Next soi over is all younger people; quite trendy- Q bar b that; lots of high end cars roling by. Not so much the fat old guys sporting beer chang wife beaters.

Anyway- thanks for all posts.

I decided against this idea after further research.

Cheers.

[Globalist]

Given the strong supply of condos in BKK, especially B and B+ grade, to minimize risks, be sure to buy as close to BTS or MRT as possible, preferably max 100 metres.