Opening A Guesthouse In Thailand

[qqatsi]

Here's my thoughts. VERY general question...

I have 2 million baat saved, and want to return to Thailand for a quiet life owning and living in a bed and breakfast kind of place. Or small hotel, or land to build.

Simple, right? I realize the task is more complicated than all of that.

I am just looking to hear your story, if similar, and gauge whether my idea is realistic.

I can only be online briefly, so I may not get back to your answers.

Thank you ahead of time.

[allane]

As a foreigner, you can not simply open a business in Thailand. You can have a maximum 49% interest, with a Thai partner holding 51% or more. You didn't indicate that you have found someone with whom you would be in partnership. Speaking as someone who has lived in Thailand for more than 10 years, I haven't yet met anyone whom I would trust with 2,000,000 baht of my money. And that is exactly what you would be doing; with them holding a 51 % interest, you may never see your money again. Of course, if you are simply leasing premises owned by someone else (and paying them rent on a regular basis), you wouldn't have nearly as much at risk as would a foreigner in a business with substantial assets.

Foreigners are not permitted to own land here, at least with only the small sum of money you have to invest. Do not believe anyone who tells you otherwise. Any "loophole" in the law which they claim to have found might be taken away from you after the fact, with your land and buildings being taken too.

[Chang_paarp]

You may want to read the business forum for a better answaer to this question.

The short answer is that it depends where you are from.

If you from the US contact someone like forum sponsor Sunbelt Asia or Indo Siam to set up a company now, and move when you can. There are special rules for US citizens that are due to expire soon.

As a non Thai, you cannot own land but you can own the building on the land. There are some businesses you can own 100% such as operating a hotel, but there are some rules that make that interesting.

Do a search on the Business sect for lots of information. It has been discussed several times in the last few months.

[IMA_FARANG]

Here's my thoughts. VERY general question...

I have 2 million baat saved, and want to return to Thailand for a quiet life owning and living in a bed and breakfast kind of place. Or small hotel, or land to build.

Simple, right? I realize the task is more complicated than all of that.

I am just looking to hear your story, if similar, and gauge whether my idea is realistic.

I can only be online briefly, so I may not get back to your answers.

Thank you ahead of time.

1. Two million baht is not a lot and will leave you short at starting that kind of business in most places in Thailand.

2. What location, where? The places where that kind of investment is enough to do what you want is in the areas where tourists are too few to support your operating costs.

3. As was said, foriegners can't own land.

4. Yes it is possible to lease, but that is another problem.

5. Believe it or not, the costs of labor for maids and hotel workers are going up all the time. You may not be able to get good staff.

6. If you really want to go ahead, get legal and financial advice from layers that have experience in this business long before you put any money into it.

[GuestHouse]

As my username suggests, I've spent a lot of time looking at this as an option.

The problem is capital outlay. My estimate is that to achieve a living income you need a guesthouse/hotel of at least 15 rooms, and that fixes a base price way above 2 million. Our own plans range around the Bht14million mark - inclusive of land.

Iterestingly, SunbeltAsia mentioned Guesthouses/Small hotels and their estimate was also 15 rooms to make a living.

Steve46(ish?) has recently established a small hotel and might be a good reference for information on what is involved.

[sbk]

I'll move this into the business section so that the OP may get better response there.

But, to be perfectly honest? My in-laws own a bungalow business and you would not have a "quiet life" in this kind of business unless you have a manager running the entire thing and you are not involved at all. Take it from me, I know

[buddhafly]

actually to say that you need 15 rooms to make money seems odd.

it would depend on what price range your guest house was, how good the place was, your occupancy rate, your costs etc.

someone could set up a real unique boutique 10 room place, do all the things that would keep him full most of the time, charge more for better accomodation,and make a good living. or you could conversley have 20 rooms, the wrong comfort/style, empty all the time, and make little money. so amount of rooms should have nothing to do with.

original poster, check out a book called 'start up and staying up' about business in thailand.

but i do believe if you didnt have a thai partner involved, youll have a tough time thus eliminating the dreamy easy retirement. and if you were going in with a thai partner i would think you should know and trust them for many years or so first.

i'm also in plans to open a guesthouse as a retirement plan, but have done tons of thinking on every aspect of the business, i have a thai girlfriend of 5 years that i trust implicitly so it will be easier to have her handle communications with thai's involved.

talk to some of the owners of guesthouses you stay at.

the tough thing for me is finding the right piece of land. most of the really good locations are expensive. a bigger cost than building the place for me. i think the thais that run guesthouses can survive (even while offering crap) becuase its family land they dont pay for.

what city you want to open a guesthouse?

and mr.Guesthouse, what city are you thinking?

[GuestHouse]

mr.Guesthouse, what city are you thinking?

To say would be to give away a lot of hard earned research, suffice it to say we are not in a city.

As you rightly say, the right location and piece of land is critical, we searched for months and where very lucky to find a piece of land that almost perfectly fitted the specification we had written out (location/size/condition/price) – The ‘Almost’ was due to the price, despite buying during the big land give away AKA ‘Back end of the Financial Crisis’ we still had to pay quite a lot more than I anticipated for the land.

Also as you say, marketing to a 'Niche' (I hate the term Bijou) can be a winning formula, but doing so requires a whole lot of effort and even more research. Again, as you suggest, talking to current owners is a great source of information.

One consideration we've given a lot of thought to is 'Should we employ family members?'. My wife has been dead against the idea from the start, she doesn't want to take on more responsibility than she already has (sensible I think, especially given that her family are nowhere near the location we have chosen). But that then entails finding, training and paying staff, so my idea of getting cheap help went out of the window.

More than one of the current owners we spoke to had very strong views on the idea that 'Nothing is for free - and in particular family help is not for free'.

Advice we have heard often is that to run a successful GH business (especially niche) we would have to enforce Farang Standards but sympathetically to Thai ways, with an emphasis on maintaining standards and not letting Thai ways get in the way. That becomes a problem, say, where you need a family member to come up to the mark on performance.

One owner, who was quoting from what he called his own bitter experience, cautioned not to employ family members on the grounds that with paid staff you can lay them off if business is slow or personal performance is poor without causing a family feud. While alternatively, if things are going well, enjoy the rewards without having an alternative family feud over who's business the place is and who gets the rewards.

Having to ballout or sack family members or enjoying conspicuous rewards of your business while family members remain as employees is asking for problems no business needs.

There are a huge range of things to think about and address, doing so absorbs a tremendous amount of our time, but that’s all part of the appeal of starting any business, doing things your own way and planning for times ahead.

Do keep the conversation going, I love discussing this plan, apart that is from where and the details of the niche we have in mind.

Edited September 20, 2006 by GuestHouse

[buddhafly]

gh,

what you say about the potential downside of family members is very good foresight.

i have no qualms saying that i will be starting in chiang rai. hope this isnt a conflict as it would be good to exchange info! i have done lots of research and tons of thinking... if we are in different cities we could share valuable info...

bf

[Heng]

my 2 cents:

You might want to consider whether your niche can be defended as well... and if not, whether your first mover advantage is going to provide enough momentum to strengthen your position or diversify your businesses. Poster Guest House's secrecy is along the right track, but considering the nature of the enterprise, it's possible that it's going to be public knowledge after the first week he is in business, hopefully not.

Myself, I started out with far less capital, and used one single facet in both of my principle profit engines (orchid/plant export and fish feed import and later on in my stake in the family pawn shops)..... speed. I'd answer emails/faxes immediately or at least within a few hours and have quotes ready within the same day... when at the same time our competitors might take several days to a week to reply and respond with a proforma invoice. That edge, like most niches, has slowly eroded over the years as most importers/exporters in the same field nowadays have stepped up their speed of service. I pretty much saw that coming, so at the same time I was building up my capital to make use of our family pawnbrokers license. We weren't the forerunners with quick service (as comparatively, you have always been able to get a loan faster from a pawn shop than a bank)... but I could see that the business was in a defensible position, both legally and practically. One, they aren't issueing any more licenses (no new direct competition). Speedwise: if you wanted 2 million from us, it would take about 30 minutes -if you showed up with a property deed worth 4 million and assuming that was during land office operating hours, whereas you would be lucky to have a bank do that for you within the same week. Cultural and traditional reasons have kept that speed of service fairly stagnant for them. That said, you still have to keep an eye on the competition (you used to not be able to bank on weekends here... now you can... it probably won't be too long before they'll have full service banking 7 days a week...), you never know when they'll turn on the afterburners and close the gap.

Good luck!

Edited September 22, 2006 by Heng

[GuestHouse]

Some very valid points made by Heng regarding copying of business ideas. You’ll see this throughout Thailand, a business starts up, gets going and within a very short time a competitor opens next door and often with a confusingly similar name.

(The book ‘Starting up and Staying up in Thailand’ has some good background information).

I don’t think you can do much about it, other than pay attention to the details Thais often miss. Copying a business idea is one thing, copying a business model and way of working is quite something else. As Heng says, promptly answering queries is an example of an edge – The Farang/Thai connection can also be a great advantage where the business has both Farang and Thai partners. The trick is finding the right Thai – and let’s not miss this – the right Farang too.

What is clear is that many (but not all) Thai rip-off businesses fall far short of the competition they enter into. Yes there might be a string of almost identical stores setting up along side of you, but are they providing the service they promise?

We should also keep in mind, I certainly do, that we may be moving into an business/area that is already being worked by Thais. This is, I believe, one of the trickiest things to deal with, competing with Thais on their own turf is not going to make any friends. A clearly different business set-up distinguishing a different main market might at least alleviate some of the inevitable friction.

I have a French friend who set up a business (Let’s call it ‘Paris Solutions’) within 18 months he had a Thai competitor (former employee) set up right across the street with something called the equivalent of ‘French Solutions’ – Can you possibly imagine the outcome if a foreigner did that to a Thai?!

Nor should we only consider Thais as the only people looking to rip off the new Farang Idea. Thailand is awash with Farang guys looking for an idea (someone else’s will often do nicely).

Business is, as we all know, about competition – If you don’t want to compete, stay out of business.

[davidjtayler]

Some very valid and interesting points from everyone on this thread ....

I think when making business in Thailand (and possibly other countries to some extent) is never sit on your laurels ... if you become complacent and start taking things for granted thats when your business starts to slip ... it doesnt take long ....

Im always thinking how can I imrove my service/business to keep my edge ... things are continuously evolving (often very small adjustments) to improve the business as a whole.

Keep on your toes and listen to your customers as they are the ones that know what they want .. if you keep providing and improving for them then you will keep them and they will refer more customers to you.

The biggest assets Ive found here in Thailand are the simplest to provide ... honesty and reliable and prompt service ...

Good luck in your endevours ....

[Scottbiker1976]

2 million baht is more then enough, you can go a whole end what that kind of money in Los.....

Focus yourself on 1 kind of customers and keep it simple and not to big, like 5-10 rooms.

Offer service to the customers and you will be fine

And there is always Cambodia nowadays.......no competition and lots of visarunners....and cheap

Greetz

Scottbiker

[Moonfruit]

As Scottbiker said, 2 million baht is plenty if you choose leasehold, which is the best bet right now.

Example, i owned a guesthouse in Phuket, leasehold. Took the place over in the April after the Tsunami. It had 11 rooms, one of which i ditched to replace with a common room.

We offered something different. Every place in Thailand tries to offer something different, even those who try to offer something different. Our prices were comparable to the hotel over the road who had swimming pool, and all the facilities, yet from the moment i took over, we had occupancy rates of over 75%. In the low season, within 6 months of the Tsunami. Just from a little bit of thought. I cant emphasise enough the fact that you need to be different from others, and that doesnt mean giving people free internet, or an airport transfer. It doesnt mean reducing prices and putting big stickers in your windows. You have to look at the competition, and come up with something yourself.

We had backpackers sleeping 8 people in a room with just 1 double bed, and we had medical tourists paying full rate on their own. Be imaginative. Thats what this country lacks.

I ended up selling the place for a pittance within a year through Sunbelt as family circumstances needed me back in Bangkok, but it was a great time.

Ive never been to Chiang Rai, but im sure you can do something up there.

As an example of what you can find, if you arent in a hurry. I just leased a 4 storey shophouse in Bangkok this week on a 30 year + 30 year lease. The place needs a lot of work, but it cost me 40,000THB, plus 5,000THb/month. This is within walking distance of the skytrain at On Nut.

you dont need millions to get going, you just need to set your mind on what you want, and keep chipping away.

Good luck

[johnnyk]

I know a couple of guys who bought a lease on a 9-room GH in Jomtien next door to Pattaya about 2 years ago.

They paid about 1.4 million for a proper 3X3-year lease so they are safe for 9 years.

Monthly rent is about 20K so with the key money factored in the rental nut is about 33K.

The rooms go for 450-550 a night, some are bigger or have better light etc.

One room is small and dark, the crappiest room in the place.

This room brings in 750-1000 or more a day(!) because the gay bar across the soi has no ST rooms.

A neighbourhood cop uses the ST room 2 or 3X a week, no charge and no pompems either.

OK, there's most of the rent.

They are close to the beach and guess what? There is no pi*ser at the beach.

They charge 5 baht a pee (standard rate at many bars etc). This brings in 5000 a month!

So rent is covered from the ST room and the can.

They sell cold drinks at a profit and they have a big kitchen they could do more with, such as renting it to a cook as they have a double shophouse to put in tables and chairs.

For about 12-15 weeks a year they are 100% booked so average nightly rent of 500X 8 rooms X 100 nights = 400K baht.

Assume occupancy the rest of the year is only 35% so that could generate about 350K.

So, rent is paid and there is 400K + 350K = 750K + drinks profit.

They have 2 staff at 4000 a month each so 8K for staff = 96K a year.

So, 750 -100 staff = 650K annually + drinks profit less taxes, electric, water and repairs.

They sleep rent-free on the premises when they are there because there is one large aircon bedroom they don't rent out.

Key is location, location, location.

Edited September 22, 2006 by johnnyk

[Moonfruit]

I know a couple of guys who bought a lease on a 9-room GH in Jomtien next door to Pattaya about 2 years ago.

They paid about 1.4 million for a proper 3X3-year lease so they are safe for 9 years.

Monthly rent is about 20K so with the key money factored in the rental nut is about 33K.

The rooms go for 450-550 a night, some are bigger or have better light etc.

One room is small and dark, the crappiest room in the place.

This room brings in 750-1000 or more a day(!) because the gay bar across the soi has no ST rooms.

A neighbourhood cop uses the ST room 2 or 3X a week, no charge and no pompems either.

OK, there's most of the rent.

They are close to the beach and guess what? There is no pi*ser at the beach.

They charge 5 baht a pee (standard rate at many bars etc). This brings in 5000 a month!

So rent is covered from the ST room and the can.

They sell cold drinks at a profit and they have a big kitchen they could do more with, such as renting it to a cook as they have a double shophouse to put in tables and chairs.

For about 12-15 weeks a year they are 100% booked so average nightly rent of 500X 8 rooms X 100 nights = 400K baht.

Assume occupancy the rest of the year is only 35% so that could generate about 350K.

So, rent is paid and there is 400K + 350K = 750K + drinks profit.

They have 2 staff at 4000 a month each so 8K for staff = 96K a year.

So, 750 -100 staff = 650K annually + drinks profit less taxes, electric, water and repairs.

They sleep rent-free on the premises when they are there because there is one large aircon bedroom they don't rent out.

Key is location, location, location.

I disagree there Johnny. Location isnt the key, as generally there are 10's or even 100's of guesthouses in the key locations in most places in Thailand.

The key, as i said before if offering something different, and marketing that wisely. Taking the majority of your bookings over the internet, through agreed service providers, negates the location factor. If marketed properly, you done have any rooms available for the walkpast trade that a prime location would give you anyway.

Also, another major point is that i hate is 'key money'. I will/would/have never rented a place demanding key money. Granted, if you dont pay the key money, the rent maybe a littl ehigher, but you need a place with a decent landlord anyway. A decent landlord means a guy who wants your business to succeed so that he may also reap the rewards in rent increases over the coming years. I accept that this logic is hard to find in thailand, but it is possible.

[Heng]

Also, another major point is that i hate is 'key money'. I will/would/have never rented a place demanding key money. Granted, if you dont pay the key money, the rent maybe a littl ehigher, but you need a place with a decent landlord anyway. A decent landlord means a guy who wants your business to succeed so that he may also reap the rewards in rent increases over the coming years. I accept that this logic is hard to find in thailand, but it is possible.

What you hate is your dissatisfaction with what you have to pay out. Most landlords I know, myself included would be happy to pass on the key money (seng) if the tenant was willing to sign to the equivalent rental rate paid in advance). 5 years at 25,000 a month + 1,500,000 seng, or if you don't like the lump sum seng payment, 5 years at 50,000 a month payable in advance (3 million). If you hate key money on principle, then you'd prefer to pay the 3 million in advance, yes? It's important to remember that all key money is, is the right to rent for an X time period, no different than signing a lease paid up in advance for the same time period. If you went bankrupt under the key money deal, you'd still have the right to sublease to someone else (unless subleasing wasn't allowed in the rental contract) for the rest of your key money period.

From the landlord's point of view, key money (seng), screens out a lot of would be business folks who are undercapitalized. We have properties that were originally rented out with a key money payment that also have key money requirements upon each renewal.... and also properties with no key money requirements (typically residential). The difference is also quality of location. No one is 'forcing' you to lease in the areas of town that are in demand. Yes, we'd like your business to succeed, but like anything else in life, there aren't going to be any financial aid/grants here.

*edit: I should say that when folks opt to pay up in advance, we usually discount 1 month's rent, so it's actually a bit less than the 3 million figure after 5 years... but the point wasn't to compare present values,.... and at the most we typically only collect 1 year's rent in advance. The point is that key money is a tangible 'right to rent' that you are purchasing, so in business areas, they difference between a key money and non-key money rental arrangement would be more than just a "little higher."

Edited September 23, 2006 by Heng

[johnnyk]

These guys don't use internet at all and don't advertise other than word of mouth.

Nobody likes key money.

That's fine, don't rent the place.

Heng is right, there is key money either up front or buried in the monthly.

If the landlord wants it and you want the lease then tough titty, pay up.

The landlord, IMO, doesn't give a <deleted> if you succeed or not.

If you go tits up he still owns the property and there will be someone else tomorrow.

A falang telling a Thai landlord, "I don't want to pay key money" will get a loud 5555.

[~G~]

The key, as i said before if offering something different, and marketing that wisely.

Bad location equals much higher marketing expenses. Isn't that obvious?

Taking the majority of your bookings over the internet, through agreed service providers, negates the location factor.

First, in each hotel booking site there are thousands featured hotels, you still compete with all of those. Second, you make much less money from guests arriving from agents than from walk-bys. You can't really afford paying significant agent comissions with 500-1000 baht rooms, and no agent will list or promote your hotel for pennies.

Also, another major point is that i hate is 'key money'.

Me too, so what. That's the way it is being done here, your personal preferences are not relevant.

[GuestHouse]

Part of the attraction of a Guest House, for us anyway, is it is a business we can do together from home. Almost thirty years on the road with the Oil and Gas business has me pining for spending time in my own home.

So we've bought, not rented, and if the business is not as good as we hoped, we still have our land and home.

That of course accounts of the high setup price we are budgetting for, it's land/home with a guesthouse tacked on.

I'd really not want to run a business that I know I'm going to give back to the landlord after having got it running and making proffit.

As some have said here, the guesthouse is part of the business, the other part is all the added value and added extras and that is where a guesthouse offers a huge advantage to a foreigner. Guests want to hire a bike/car/driver etc, then with a properly set up business and work permit structure, you can tack on bike/car/driver hire.

(I'm making a note of those who don't mind paying keymoney, just incase we decide to rent the place out ... )

Don't take that seriously!!

[~G~]

Guesthouse, your posts are interesting, I hope it's OK if I ask you a few questions.

buying during the big land give away AKA ‘Back end of the Financial Crisis’ we still had to pay quite a lot more than I anticipated for the land.

That was years ago, did you just own the land during that time?

My estimate is that to achieve a living income you need a guesthouse/hotel of at least 15 rooms, and that fixes a base price way above 2 million. Our own plans range around the Bht14million mark - inclusive of land.

Didn't quite get if you've bought an existing structure/s or constructing it yourself. Is it correct to assume this figure includes construction costs and everything else apart from running costs? May I ask how many rooms will you have?

Edited September 23, 2006 by ~G~

[Heng]

The landlord, IMO, doesn't give a <deleted> if you succeed or not.

There are certainly those who don't care at all, but it'll definitely vary from property to property and landlord to landlord. 'Not caring' of course should not to be confused with a lack of leniency when you're late (sometimes a several months -and sometimes even YEARS- in arrears) with the rent, as that's just business. Sure, malls and many shophouse owners might not care as much as there is only so much maintainence to be done when a lease is broken because of business failure. There are plenty of properties where the tenants have made modifications to the property (say, build a bunch of tennis courts, a driving range, and yes, sometimes a bunch of termite trap bungalows or whatever permanent/semi permanent fixtures that limit future tenants to doing the exact same business without significant investment on their part to ready the rental property for business) out there though where the salvage effort is not so clear cut and the potential to re-lease the property in question is limited by the failure of the previous tenant. In other words, like many retail and wholesale business, landlords often DO like to deal with the same familiar 'customers.'

[rono]

I am a foreigner married with thai, have a good running business and I now start looking to set up another business. The plan is to buy a few rai of land and build a shop on it for my wife and myself.

The rest of the land I plan to build a row of buildings in a L or U shape ( depends of the width ), a building can be rent for shop, guesthouse,....whatever. I hope to have the land by the end of this year so I can start with contruction the beginning of next year. My shop should be ready to open by the end of april. Anyone interested pm me.

rono

[Moonfruit]

The key, as i said before if offering something different, and marketing that wisely.

Bad location equals much higher marketing expenses. Isn't that obvious?

Taking the majority of your bookings over the internet, through agreed service providers, negates the location factor.

First, in each hotel booking site there are thousands featured hotels, you still compete with all of those. Second, you make much less money from guests arriving from agents than from walk-bys. You can't really afford paying significant agent comissions with 500-1000 baht rooms, and no agent will list or promote your hotel for pennies.

Also, another major point is that i hate is 'key money'.

Me too, so what. That's the way it is being done here, your personal preferences are not relevant.

Hey G, let me expand somewhat.

First of all, i never said anything about a bad location. Im talking about the difference between being on beach road, and being on second road. Of course, if you have a bad location its not gonna work, whatever the business, but what im saying is stay away from the inflated rents of prime locations.

Secondly, through using sites like hostelworld and paying a fixed yearly fee of all of 25USD my guesthouse was at 70% occupancy thoughout the low season. Not a bad effort. Add to this the ability of booking through our own website (again, no commisions due there) and we generally didnt have space for walk in guests, especially in the high season when we were booked out for a 4 month period.

Oh, and marketing expenses? I think our total marketing budget for the year was 20,000THB which included web hosting fees, business cards etc. Dont forget, the best marketing of all is free. Word of mouth. If you have a little secret, and those that stay with you enjoy it, they will tell their friends. Travellers in Thailand speak to each other. There not a lot of point in marketing a guesthouse in the local thai press now is there. Those guys reading it are visitors who generally already have a room. Now, doesnt that make more sense?

Regarding key money, personal preferences are indeed relevant. Thats the point of a discussion forum in the first place isnt it? Sure, many people accept that key money is the norm here, however, there are those like myself who dont like the idea of it. I dont charge key money for the locations that i lease out, either here or in my own country. I do however charge a reasonable and fair rent. Key money is nothing but buying the right to give somebody your money, but this is a topic well covered in other threads on here. Anyway, my point is, as you said, you dont like it too. Thats what you say above. Then why dont you do something about it! Find a place where the landlord doesnt charge it. Sure, the rent may be a little higher, but isnt that lump sum better off invested by you, giving you a return rather than the landlord? Just a thought...

[~G~]

First of all, i never said anything about a bad location. Im talking about the difference between being on beach road, and being on second road. Of course, if you have a bad location its not gonna work, whatever the business, but what im saying is stay away from the inflated rents of prime locations.

Second street is pretty good. You just confirm what I said about good location being important.

Secondly, through using sites like hostelworld and paying a fixed yearly fee of all of 25USD my guesthouse was at 70% occupancy thoughout the low season. Not a bad effort. Add to this the ability of booking through our own website (again, no commisions due there) and we generally didnt have space for walk in guests, especially in the high season when we were booked out for a 4 month period.

Sounds good, but quite irrelenent due to your good location.

Dont forget, the best marketing of all is free. Word of mouth. If you have a little secret, and those that stay with you enjoy it, they will tell their friends. Travellers in Thailand speak to each other.

They certainly do. And they could start speaking with each other after they found your guesthouse, which was is a good location to begin with.

Regarding key money, personal preferences are indeed relevant. Thats the point of a discussion forum in the first place isnt it? Sure, many people accept that key money is the norm here, however, there are those like myself who dont like the idea of it. I dont charge key money for the locations that i lease out, either here or in my own country. I do however charge a reasonable and fair rent.

You are being a bit vague here. You are talking about renting but now speaking as a landlord? Bottom line: Did you rent a guesthouse in second street with no keymoney or is all that in theory?

[Moonfruit]

First of all, i never said anything about a bad location. Im talking about the difference between being on beach road, and being on second road. Of course, if you have a bad location its not gonna work, whatever the business, but what im saying is stay away from the inflated rents of prime locations.

Second street is pretty good. You just confirm what I said about good location being important.

Secondly, through using sites like hostelworld and paying a fixed yearly fee of all of 25USD my guesthouse was at 70% occupancy thoughout the low season. Not a bad effort. Add to this the ability of booking through our own website (again, no commisions due there) and we generally didnt have space for walk in guests, especially in the high season when we were booked out for a 4 month period.

Sounds good, but quite irrelenent due to your good location.

Dont forget, the best marketing of all is free. Word of mouth. If you have a little secret, and those that stay with you enjoy it, they will tell their friends. Travellers in Thailand speak to each other.

They certainly do. And they could start speaking with each other after they found your guesthouse, which was is a good location to begin with.

Regarding key money, personal preferences are indeed relevant. Thats the point of a discussion forum in the first place isnt it? Sure, many people accept that key money is the norm here, however, there are those like myself who dont like the idea of it. I dont charge key money for the locations that i lease out, either here or in my own country. I do however charge a reasonable and fair rent.

You are being a bit vague here. You are talking about renting but now speaking as a landlord? Bottom line: Did you rent a guesthouse in second street with no keymoney or is all that in theory?

Nothing vague about being a landlord and also using rental property. Something i would guess many foreigners do here.

And yes, I rented a guesthouse in 'second street' with no key money. The new owners lease still has no key money payment.

[~G~]

And yes, I rented a guesthouse in 'second street' with no key money. The new owners lease still has no key money payment.

New owner? Do you mean the new Tenant?

[Moonfruit]

And yes, I rented a guesthouse in 'second street' with no key money. The new owners lease still has no key money payment.

New owner? Do you mean the new Tenant?

No, i mean the owner. He is the owner of a guesthouse business, and the owner of a lease on a building. An assett that can be sold on at any time.

[Sir Burr]

Unless you own the land your business, any business, is on, you will be a slave to the land-owner.

[Moonfruit]

Unless you own the land your business, any business, is on, you will be a slave to the land-owner.

Quite right Sir Burr. Unfortunately, taking that literally though means that it is therefore impossible for a foreigner to do business in Thailand as we all know that we cannot own land.