Patong is dead.

[stevenl]

18 minutes ago, phuketjock said:

Key money is something that appears to have been invented by imaginative

Thai commercial property owners and it is basically a gift to the owner/lessor by the 

lessee for the vague privilege of renting their property?

They choose the amount and if you want to rent you pay, up to you. It used to be a

one time payment for as long as you leased the property but nowadays some

enterprising (for want of a better word ) Thai owners have found a way to extract

even more money by making the key money payment a 3 year payment or I have even heard of 

annual key money demands, it is something to steer well clear of, basically a grand ripoff

But as long as there is a mug who is willing to pay, and there usually is, they will keep

demanding it. Not something I would ever entertain, if asked for key money I walk away

period.

I too had never heard of it until I came to Phuket.

Key money is a well known concept in many countries. You pay money for the privilege of being allowed to rent/lease a property. Normally once paid per lease/rental term.

[phuketjock]

6 minutes ago, stevenl said:

Key money is a well known concept in many countries. You pay money for the privilege of being allowed to rent/lease a property. Normally once paid per lease/rental term.

Thanks stevenl, I have never come across it before, in my many travels, but I bow to your knowledge.

[KarenBravo]

The reason most leases are three years in length, is that any longer than that and it must be registered at the land office by law and will be notated on the land paper.

But, it also gives the opportunity to collect key money again. Of course, it very much depends on the location of the property.

[LivinginKata]

24 minutes ago, KarenBravo said:

The reason most leases are three years in length, is that any longer than that and it must be registered at the land office by law and will be notated on the land paper.

But, it also gives the opportunity to collect key money again. Of course, it very much depends on the location of the property.

 Exactly correct and it allows the property owner to fly under the income tax radar.

 

Also they hope the business fails quickly, as in the first year, then they lasso another mug. But I have to say that there are less mugs about these days. Still some, but harder to find.

Edited June 19, 2017 by LivinginKata

[madmitch]

Key money is paid to the landlord. It's often confused with money paid to a leaseholder to buy an ongoing business, though more and more people now just run their contract down, or even do a moonlight flit, as businesses become harder and harder to sell. As so often, greed gets the better of people and they often end up losing out because of it.

 

I'll give an example: our neighbour ran a failing massage business which she wanted to sell for 300,000 baht (approximately 250,000 baht more than the business was worth - the remaining 50k being the minimal assets). Someone offered 200,000 and instead of biting her hand off she declined. Two months later she had no money to pay her rent and disappeared with nothing! 

 

So many people believe their little businesses are worth much more than they are. A loss-making business is worth no more than the assets, and often furniture, fixtures and fittings are owned by the landlord anyway, as another neighbour of ours found out; and he actually used a lawyer to conduct the business purchase...obviously a pretty useless one that didn't even bother to read the contract.

[Na Lee]

Key money is paid to the landlord. It's often confused with money paid to a leaseholder to buy an ongoing business, though more and more people now just run their contract down, or even do a moonlight flit, as businesses become harder and harder to sell. As so often, greed gets the better of people and they often end up losing out because of it.
 
I'll give an example: our neighbour ran a failing massage business which she wanted to sell for 300,000 baht (approximately 250,000 baht more than the business was worth - the remaining 50k being the minimal assets). Someone offered 200,000 and instead of biting her hand off she declined. Two months later she had no money to pay her rent and disappeared with nothing! 
 
So many people believe their little businesses are worth much more than they are. A loss-making business is worth no more than the assets, and often furniture, fixtures and fittings are owned by the landlord anyway, as another neighbour of ours found out; and he actually used a lawyer to conduct the business purchase...obviously a pretty useless one that didn't even bother to read the contract.

TRUE TRUE AND ONE MORE TIME TRUE...!

Sent from my BLL-L22 using Thailand Forum - Thaivisa mobile app

[madmax2]

So key money, tea money same,same, never paid either ever in Aust and never would here if i could be bothered having a business

Edited June 20, 2017 by madmax2

[phuketjock]

4 hours ago, madmax2 said:

So key money, tea money same,same, never paid either ever in Aust and never would here if i could be bothered having a business

Tea money is not quite the same mm2 it is what is often referred to as protection money

or a monthly brown envelope to the bib to turn a blind eye to anything dodgy that you may

be up to, as I said in a previous post, if you are paying tea money you are probably doing

something illegal? Like everywhere that such practices exist once you start paying it can only

get worse. Basically it is bribe money.

Edited June 20, 2017 by phuketjock
addition

[LivinginKata]

1 hour ago, phuketjock said:

Tea money is not quite the same mm2 it is what is often referred to as protection money

or a monthly brown envelope to the bib to turn a blind eye to anything dodgy that you may

be up to, as I said in a previous post, if you are paying tea money you are probably doing

something illegal? Like everywhere that such practices exist once you start paying it can only

get worse. Basically it is bribe money.

 

Even no so dodgy business are pressed for 'tea money'.  We know a lady who started a legitimate small scale beauty salon on Nanai Rd. The (the BiB) wanted 3,000 baht a month so 'make sure she had no problems'. It's mafia stuff. She caved and paid ....costs too high and she went out of business in less than a year.

[phuketjock]

3 hours ago, LivinginKata said:

 

Even no so dodgy business are pressed for 'tea money'.  We know a lady who started a legitimate small scale beauty salon on Nanai Rd. The (the BiB) wanted 3,000 baht a month so 'make sure she had no problems'. It's mafia stuff. She caved and paid ....costs too high and she went out of business in less than a year.

I think they know an easy touch when they see it, still it is sad that she was bullied to that extent.

Touch wood we have never to my knowledge been approached for tea money but we were ripped off

once only by the "excise " police, made sure it will not happen again, their second try they left empty

handed. Sure they will be back to try it on again vigilance is a basic necessity daily.

It may be that my missus has one of those  " don't even think about it looks  " anytime they appear,

well that's what I put it down to, it scares me lol.

Edited June 20, 2017 by phuketjock
correction

[xylophone]

4 hours ago, LivinginKata said:

 

Even no so dodgy business are pressed for 'tea money'.  We know a lady who started a legitimate small scale beauty salon on Nanai Rd. The (the BiB) wanted 3,000 baht a month so 'make sure she had no problems'. It's mafia stuff. She caved and paid ....costs too high and she went out of business in less than a year.

Yes, just about any business can be pressed for tea money and often are and not because they are doing anything wrong. I know of several businesses which have been approached by the BIB with regards to this and some have paid a small amount (because they are very small businesses) whilst others have flatly refused.

 

Bone fide bars almost always pay up and not because they do anything wrong, but because they know what will happen if they don't, and I have seen this happen first-hand. No tea money paid means that the bar is visited by the BIB and the girls are harassed, asked to show identification and often taken to the toilets for urine samples, all while the BIB are milling around the bar, so no customers.

 

And this can happen several times until such time as the bar owner knows he had better pay up or business will suffer, so he does.

[xylophone]

On 6/18/2017 at 10:14 PM, LivinginKata said:

 

I agree. Not so many for sale signs on display. But I for sure know many owners would like to sell but want premium price ... not realistic .  My Thai wife has a huge sell price expectation. I just laugh at her figures. Luckey I can walk away and not look back. Oh well .

.

 

 

 

 

 

Quite right LIK about there being many owners who would like to sell and as my friend in this business has said, you will only see for sale signs outside when folk are desperate or when they have all but given up, or have walked away from a closed business. This for obvious reasons.

 

A short while ago we were discussing the situation with regards to guesthouses and small hotels being for sale and I mentioned that despite the fact he said there were many for sale I hadn't seen too many "for sale" signs around the place.

 

We were standing just outside of Starbucks near the new middle road and he rattled off a whole host of guesthouses/small hotels down that strip that were for sale, and others around the place and there were many for sale.

 

So if one adds those to the businesses that Schlog has seen around the place, one will get a better idea of the state of play in this market at the moment.

 

And just yesterday a friend from way back told me that she wanted to sell her small hotel (no signs up) and at the moment she had three guests staying in her 20 room establishment and although the high season had been fairly good for her, she really couldn't hold out much hope for the future. So, about 23 million baht will buy a 20 room small hotel, complete with lift, kitchen, small restaurant/dining area and small bar and a good amount of parking space, all in a quiet location not too many metres from the nightlife.

 

 

[madmitch]

15 minutes ago, xylophone said:

Yes, just about any business can be pressed for tea money and often are and not because they are doing anything wrong. I know of several businesses which have been approached by the BIB with regards to this and some have paid a small amount (because they are very small businesses) whilst others have flatly refused.

 

Bone fide bars almost always pay up and not because they do anything wrong, but because they know what will happen if they don't, and I have seen this happen first-hand. No tea money paid means that the bar is visited by the BIB and the girls are harassed, asked to show identification and often taken to the toilets for urine samples, all while the BIB are milling around the bar, so no customers.

 

And this can happen several times until such time as the bar owner knows he had better pay up or business will suffer, so he does.

Apparently, since the installation of a new police chief a couple of years ago, all bars under the Karon Police District now pay tea money. Previously protection money was only paid by those bars catering for the takeaway trade, late opening establishment and those selling drugs. Not sure what the situation is in Patong for "legitimate" bars?

[simon43]

and I mentioned that despite the fact he said there were many for sale I hadn't seen too many "for sale" signs around the place.

 

Many business owners don't want to openly advertise that their business is for sale - they will list the business online with a business broker.

 

Although not in Patong ex #3's hotel at the airport is for sale, but there is no for sale sign (hotel guests are hardly likely to recommend to friends to stay if there is a for sale sign outside the property!).

 

In her case, business is fine, (but that's because she is right next to the airport), and she's building 2 more guest rooms.  But she wants to sell up and move back to Issan.

 

I just checked on a couple of the business broker websites.  There are dozens of bars and guesthouses for sale, many at what may look like 'giveaway' prices. That giveaway price equates to the minimum amount of money that you'd be throwing straight down the drain.

[LivinginKata]

28 minutes ago, xylophone said:

<snip>

And just yesterday a friend from way back told me that she wanted to sell her small hotel (no signs up) and at the moment she had three guests staying in her 20 room establishment and although the high season had been fairly good for her, she really couldn't hold out much hope for the future. So, about 23 million baht will buy a 20 room small hotel, complete with lift, kitchen, small restaurant/dining area and small bar and a good amount of parking space, all in a quiet location not too many metres from the nightlife.

 

 

 

Does that 23 million include buying the land ... if yes might be worth a look by an investor with money.

 

I'm wondering if it's on Rat-u-Tit just before OTOP ? Place there been offered for sale for many years on various websites  ... no signs outside. 

[Rimmer]

A personal attack has been removed

[xylophone]

The information came direct from a man whose business is selling these places and obviously I can't name him and nor would he want to be named.

 

As for a sales pitch, well sorry that you saw it that way, but then again that's one of your assumptions, because it was merely to point out that there are places for sale and this particular one is close to the action and I know of it. I want nothing to do with selling it, nor have I ever advertised that fact.

 

For the record LIK it is in the new middle road as I call it, and it is Thai freehold.

 

So sad that one poster seems to have to denigrate the poster and his integrity because that's not what this thread is all about. 

[Scott]

Off-topic, baiting post removed.  

 

Please stay on topic.

[phuketjock]

8 minutes ago, xylophone said:

The information came direct from a man whose business is selling these places and obviously I can't name him and nor would he want to be named.

 

As for a sales pitch, well sorry that you saw it that way, but then again that's one of your assumptions, because it was merely to point out that there are places for sale and this particular one is close to the action and I know of it. I want nothing to do with selling it, nor have I ever advertised that fact.

 

For the record LIK it is in the new middle road as I call it, and it is Thai freehold.

 

So sad that one poster seems to have to denigrate the poster and his integrity because that's not what this thread is all about. 

So now you are telling us it is one guy selling all these properties/businesses then? and why can't you name

him is he a dodgy dealer? or are you now telling us your information is from a property salesman because

everyone know how honest they are, so exactly where is your information coming from? If what you say has

any truth to it surely it would be the exact opposite he would want everyone to know who he is, how else could

he possibly expect to sell something by keeping it secret?? 

The only thing sad about this thread mate is that there is one poster who thinks he is so superior to all others

that his opinion is the only valid one and anyone else's opinion means nothing, unfortunately his opinion has no

factual or credible substance, only anonymous input from second hand sources. Just because someone claims

to be very good at something doesn't mean they are.............................the proof of the pudding etc,etc,.     

[NamKangMan]

On 19/06/2017 at 4:12 PM, phuketjock said:

When you start commenting from a credible knowledge base, ie run a business in Patong , then perhaps there is a chance 

that someone may listen to your fantasy rants???

 

Another side step to questions put to you.

 

You continue to play the poster, not the post.  It's you with zero credibility.

 

You claim to pay no key money and no tea money and run a successful business here, but refuse to say in what industry and in what location.

 

I'm calling TROLL. 

[NamKangMan]

@ PJ.   Here's some random "third hand" businesses for sale on the internet.

 

http://businessforsale.c2b.asia/

 

http://businessforsale.c2b.asia/restaurants-for-rent-lease/

 

http://businessforsale.c2b.asia/hotels-for-rentlease/

 

Can the internet be "third hand information?" 

[phuketjock]

1 minute ago, NamKangMan said:

 

Another side step to questions put to you.

 

You continue to play the poster, not the post.  It's you with zero credibility.

 

You claim to pay no key money and no tea money and run a successful business here, but refuse to say in what industry and in what location.

 

I'm calling TROLL. 

Wrong again NKM I posted the location and number of our ventures the nature of our

business has no relevance whatsoever and I have claimed nothing other than the facts

pertaining to this thread and my wife and I's businesses.

I you do not wish to accept what I say as truth then that is your prerogative good luck.

 

[NamKangMan]

@ PJ   

 

Stumbled across this random website.

 

It states 369 businesses for sale on Phuket.

 

http://thailand.businessesforsale.com/thai/search/businesses-for-sale-in-phuket

 

Business must be booming to have 369 commercial properties for sale here.  Of course, all these 369 businesses must had poor managers.  Right.  

[NamKangMan]

4 minutes ago, phuketjock said:

Wrong again NKM I posted the location and number of our ventures the nature of our

business has no relevance whatsoever and I have claimed nothing other than the facts

pertaining to this thread and my wife and I's businesses.

I you do not wish to accept what I say as truth then that is your prerogative good luck.

 

 

"the nature of our business has no relevance whatsoever" - 

 

The "nature" of certain businesses here is crucial to their survival, or death. 

 

[NamKangMan]

4 minutes ago, phuketjock said:

You should invest in one of those attractive offers NKM then you might have some

small idea what you are talking about.                      

 

 

The best investment in Phuket is NO investment in Phuket. 

 

I've been proved correct, many many times, when every time I see a broke and unhealthy expat have go back to his home country, to live out the rest of his life on benefits. 

 

But hey, why not make your post about NKM, without facing the reality that 369 businesses are for sale on Phuket, on just one website. 

 

 

Edited June 20, 2017 by NamKangMan

[phuketjock]

3 minutes ago, NamKangMan said:

 

You wanted "first hand" information.  You got it. 

 

Go ahead and say all those businesses for sale, are not really for sale. 

 

369 for sale in the next post.  That's 369 "For Sale" signs displayed on the internet.  Hardly rumor, or "third hand information." 

 

Get a brain man. 

NKM  there are businesses for sale on Phuket all the time and at the beginning of low

season there are usually more than at the beginning of high season, does that help you?

I have never said there were not any businesses for sale I have said that I don't believe

Patong is dead or any where near dying and I have nothing more than the facts of how

our businesses are doing, which I have relayed to this thread, which after all is what the

op is about no? 

You can choose to accept what I have posted or not up to you it is what it is.                 

[Flustered]

Pretty obvious why the OP does not post on this thread anymore. It has moved a thousand miles away from the original topic, a lack of tourists in Patong.

[phuketjock]

3 minutes ago, Flustered said:

Pretty obvious why the OP does not post on this thread anymore. It has moved a thousand miles away from the original topic, a lack of tourists in Patong.

I don't know but perhaps " Patong is dead " may not have been the correct

title for the OP?

[Flustered]

2 minutes ago, phuketjock said:

I don't know but perhaps " Patong is dead " may not have been the correct

title for the OP?

It's all about context.

 

From his point of view, Patong was dead. Not many people at  the bowling alley and fewer tourist and he was right.

 

He was not commenting on the sleeze bars and brothels just the normal tourist areas.

 

There is always a market for the bottom feeders.

[madmax2]

10 hours ago, Flustered said:

Pretty obvious why the OP does not post on this thread anymore. It has moved a thousand miles away from the original topic, a lack of tourists in Patong.

No you are wrong,its Hans that has probably shifted a thousand miles away

Probably driven there by his driver