Buying Condos And Doing Rental Business...profitable?

[cleggit]

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I'm rather at a loss as to why you think renting to Thais would produce a more stable income stream and lower vacancy rate than renting to foreigners. My guess is the result would be exactly the opposite.

<end quote>

As there is something like 60 millions Thais and considerably less foreigners I think it is a fair assumption to make.

I would have thought it fairly obvious that I was speaking to the issue of tenant quality, not quantity.

Apparently I have once again woefully overestimated the intelligence of some people reading this board. In the future, I will try to keep that lesson clearly in mind.

You specifically mentioned vacancy rate in your original post. I also fail to see why renting to Thais would result in lower quality tenants but maybe that is because i don't like to negatively generalise the Thai people as most 'Old Asian Hands' seem far too eager to do.....

[Dakhar]

As someone that has spent at least 75K on a 7 town house turnkey structure... I say no to the plan.

Here is the deal, at least in my situation, I probably make 5% on investment. A savy person can do that on CD's without the landlord headaches. Heck I don't even like to go near my town houses, it only raises the blood preasure when you see a person tie a bent bumber to a colum and try to pull his bumper straight, or spray paint something on your parking lot, or hang clothes on the porch, keeping stinking muts around, change oil on a car and it spill all over your parking lot etc.

Keep your money in a bank.

I have the cash back home to go deeper into realestate.... but I prefer not to

[number6]

As someone that has spent at least 75K on a 7 town house turnkey structure... I say no to the plan.

Here is the deal, at least in my situation, I probably make 5% on investment. A savy person can do that on CD's without the landlord headaches. Heck I don't even like to go near my town houses, it only raises the blood preasure when you see a person tie a bent bumber to a colum and try to pull his bumper straight, or spray paint something on your parking lot, or hang clothes on the porch, keeping stinking muts around, change oil on a car and it spill all over your parking lot etc.

Keep your money in a bank.

I have the cash back home to go deeper into realestate.... but I prefer not to

i agree my wife whos thai says thais are expert at turning nice places into slums. she says only rent to up market forangs or thias who can spent 20,000+ a month on rent and then not much hazzle still some. but then only 6-7% return on that ype of property a bit better than USA or UK but not much considering extra risk we do a bit here but most out of Thailand

[think_too_mut]

As someone that has spent at least 75K on a 7 town house turnkey structure... I say no to the plan.

Here is the deal, at least in my situation, I probably make 5% on investment. A savy person can do that on CD's without the landlord headaches. Heck I don't even like to go near my town houses, it only raises the blood preasure when you see a person tie a bent bumber to a colum and try to pull his bumper straight, or spray paint something on your parking lot, or hang clothes on the porch, keeping stinking muts around, change oil on a car and it spill all over your parking lot etc.

Keep your money in a bank.

I have the cash back home to go deeper into realestate.... but I prefer not to

I have a friend in Pattaya who bought a block of land (with his Thai wife) and built a 10 rooms "building".

He rents them out for 2000B each, almost always full.

One unit is even rented by a farang as his store room - keeps his suitcases, boxes and other bulky stuff in there.

The price of land and building was 4 mil baht. Don't know where it is, must be tucked away if it's only 2000B per unit.

So, 4 mil baht investment and his work around the building bring him 20K baht per month. Somehow, exactly the same amount as Australian banks would pay in interest on that kind of money. And you can take it at a whim, no advertising, agencies, negotiating, waiting...

Somebody had a similar plan, I took this picture from Bangkok Pattaya Hospital, this 10 room/condo building is behind it. No idea how much it cost and what the rents are.

[teej]

Paperworks is right. I did the numbers on it too.

Don't target foreigners, but target the low end of the market. Buying is cheap. Use the buy and lease back method. Preferable in the neighbourhood of a big factory or in the centre of a big city. You are guaranteed to have a very high aoccupancy rate. It probably will be 100%. Try to spread out your properties. Don't invest to much in appartments in one building. If it is of a worse quality than you estimated or if some bad things happen like a fire you can loose a lot.

There are always people in need of money and if you do a buy and lease back it can be a win/win situation. The person needing money is helped and you will have invested in a condo that already has an occupant. Rent without anything, only the empty space between the walls. No furniture. That will keep maintenance low. Just take care of the structure. If you do this right it can be profitable for many many years. ROI of 10-30% are possible.

First, to the OP: don't let anybody's negative comments dissuade you. Many people on this forum will tell you to stay away from property etc. but it all depends on your level of expertise and how well you've thought it out. There are many variables that can affect your investment, and if you aren't willing to lose the 100K or some large portion of it, do not invest. Always prepare for the worst case scenario.

The way I deal with my rentals is exactly the opposite of what was suggested above. I have 3 properties in BKK which I rent out for 60k, 60k, and 80K totalling 200K/month. I specifically target Japanese and Scandinavian tenants as per experience they have proven to be the best renters in terms of payment, cleanliness, etc (and the area has many Japanese tenants). For 20 million baht, I had initially had made the decision to rent at the higher end (or at least middle-high-end, because 60-80K/month is definitely not the high end in BKK no matter what people tell you, some houses rent for 300K/month) instead of say buying 20 1-million baht condos and targeting the lower end. I also disagree with the "no furniture" idea as presented above as it just makes your condo less attractive on the rental market. I furnished each of mine at around 2million per, and it makes a huge difference when the potential renter comes to view the condo. My reason was simple (tenant's willing to pay a 3 month deposit and then 60K-80K/month were less likely to be the type to not pay on time, etc. etc. etc., although this is not a certainty, just my own opinion, as it's my money. In addition, I didn't want the hassle of following 20 tenants around for their monthly rental payments).

As I am not a resident of Pattaya, I have no authority to speak about the property market there, but as mentioned previously, I would venture to guess that it is a more seasonal market than that of BKK. However, I urge you to consider all of your options very carefully as I wouldn't want you to lose the money you've worked so hard to save.

Another real estate play in thailand is the trading of property before completion of construction. Pretty much everyone on the forum will scoff at this kind of real estate play and give you 100 examples of how some poor shmuck lost all of his savings buying condos off-plan. That is their opinion and they are entitled to it. However, there is a definite profitability in this type of investment but it is essential that you choose the right properties. 6 months ago I bought about 200sqm of condominium space at around 62k/sqm. By "bought" I am only referring to the booking fee and contract fee, and about 2 months of downpayments. Within 2 months, all property was sold at 80-85K/sqm. ROI ~280% in less than 2 months. Trust me, it CAN happen, I've done it myself. Yes there will always be a fellow who buys in a doomed project (like that poor guy in another thread who bought in "The Trendy") but if you are diligent and understand real estate and it's risks, you can enjoy quite a windfall.

Final advice: It seems as if you have an idea and only that. You need a more solid business plan and you need to outline all worst-case scenario risks, expecially if this 100K USD is your nest egg. Real estate can be risky, but it doesn't have to be (or at least you can reduce your risk tremendously by being diligent about your research and plan), remember this if nothing else.

Just my 2 cents.

Good luck on your venture, I hope it works out for you.

p.s. Why, may I ask, Pattaya?

[~G~]

I have had the same idea as you, heart.

The main reason I did not do it was because I realized, that it would not be stress-less at all, and that it is very possible to optain the same level of return from other much more maintainable investments. I invested in a mutual fund.

And what kind of yield did your mutual fund do since the beginning of the year?

ask about last 3 years miones averaged about 10% but this year since jan has been bad lost about half gain but still up about 5-7% per annum compounded - i look at long term 10+ years and in UK and USA property has been thing but here in LOS i tihnk your better of with mutuals - but who knows u takes your chance and live with it or just blow it all and go back to UK or USA and live of social

I asked about this year for a reason... did around 25% in 2005, 3% so far 2006. Mutuals funds? No. Stick to ETFs. Anyway, markets are on their way down I believe. But, enough with that, this is a real estate thread.