Guesthouse Set-up Advice

[ouagadougou]

Hi,

I’m looking into renting a guesthouse that is already up and running. Trying to sort out details as to how best to set up the business and myself.

Scenario:

** 16 room guesthouse that also includes a few small shops that are leased out.

** I’m single, under 50, on a Tourist Visa, not American….no Amity.

** Have a Thai partner that I’ve known for 10 years and trust like family.

** Likely be 3 Thai staff…including partner who is proactive.

** Guesthouse is unlikely to generate a huge profit so I’d guess either a sole proprietorship or some form of partnership would be best.

Hypothetically, what would be the best way to set-up the business?….assuming that I can trust my Thai partner 100%. As I understand it, a foreigner is able to lease land/business in their own name. But, I’m also under the impression that once you attach a foreigners name to a Thai business you attract extra expenses, paperwork and attention.

Following are a few ideas that I’m contemplating:

1. Marry Thai partner, get a Non-Imm ‘O’ visa and have bt400,000 in a bank account for extensions and live off of any profit that may come. Create a sole proprietorship in wife’s name only.

2. Marry Thai partner, get a Non-Imm ‘O’ visa and work permit based on 2 Thai staff. Create a partnership with either Thai names only or mine as well.

3. Not get married, get a Non-Imm ‘B’ visa and work permit after incorporating a business. Not likely to be an effective option due to expenses involved.

I’m sure there are many other practical options to consider. My head is full of question marks that can ultimately only be sorted out through legal advice but looking to learn a little more before I start paying for consultation.

Any advice, corrections, insight greatly appreciated….

Edited September 3, 2015 by ouagadougou

[swissie]

How about living here for 3 to 6 months and check into the guesthouse-scene on location. After that, your desire to to get involved in Business-Ventures (including Guest Houses) may have diminished greatly.

Having been here for a while, I know of 9 Guest Houses that are for sale (only private channels, I am not in the real-estate business.) 7 of them have not turned a profit within the last 3 years.

LOOK before you leap !

Cheers.

[ouagadougou]

Hi Swissie, ageee with your comment. I've been in Thailand for a while now looking into different ways of making cash and know of many GHouses for sale or closed down. So far I'm willing to give this particular one a try and trying to sort out how best to organize it....if it does happen.

[ouagadougou]

"There is no reason for you to rent a guesthouse in your girlfriends name. If you have the lease in your name, you can do some work as a 'owner' without having a work premit."

I copied that from a post made in 2009. Is this still true?....anyone know more?

[aarn]

I took over the lease of a guest house last year. Fairly straight-forward, just meet the owner, decide how many years you want to lease for, try to only pay a month in advance (no deposit) in case things go pear-shape. Can leave monthly wifi/elec/water bills in owner's name, just pay them yourself.

In my case, lease was for two years, owner wanted one month bond (forget getting that returned - standard practice here is you get a 'free' month at the end of contract). The GF and my own name were on the contract. The contract was the standard rental contract (costs 5 baht in a newsagent, maybe some TVer can post a link to download the .pdf [which is A4])

We did a few improvements without consulting the owner - painting, repairing electrics, rerouting plumbing, fixing doors etc - that is at your own expense. I would have requested owner's permission to undertake major structural changes eg. knocking out a wall.

'In case it goes pear-shape'? My GF shot through soon after I gave her 43kB to buy a new motorbike for the business, with the week's takings... what a silly old fawker I am. AA

[ouagadougou]

Hi aarn, few questions:

** What kind of visa are you on?....Tourist, 'O', 'B' ?

** Did you form a sole proprietorship, partnership or corporation?

** Do you have a work permit?

Thanks....

[happyme]

"There is no reason for you to rent a guesthouse in your girlfriends name. If you have the lease in your name, you can do some work as a 'owner' without having a work premit."

I copied that from a post made in 2009. Is this still true?....anyone know more?

Not true you need work permit and to get 1 you need 6 staff and a salary of 35,000 Bt per month

speak to a lawyer

[chicowoodduck]

A fool and his money......heed the advice and do some checkout time before you make the leap of faith....?

[macahoom]

I took over the lease of a guest house last year. Fairly straight-forward, just meet the owner, decide how many years you want to lease for, try to only pay a month in advance (no deposit) in case things go pear-shape. Can leave monthly wifi/elec/water bills in owner's name, just pay them yourself.

In my case, lease was for two years, owner wanted one month bond (forget getting that returned - standard practice here is you get a 'free' month at the end of contract). The GF and my own name were on the contract. The contract was the standard rental contract (costs 5 baht in a newsagent, maybe some TVer can post a link to download the .pdf [which is A4])

We did a few improvements without consulting the owner - painting, repairing electrics, rerouting plumbing, fixing doors etc - that is at your own expense. I would have requested owner's permission to undertake major structural changes eg. knocking out a wall.

'In case it goes pear-shape'? My GF shot through soon after I gave her 43kB to buy a new motorbike for the business, with the week's takings... what a silly old fawker I am. AA

"My GF shot through"

Can someone translate this into English, please?

[Absolut]

I took over the lease of a guest house last year. Fairly straight-forward, just meet the owner, decide how many years you want to lease for, try to only pay a month in advance (no deposit) in case things go pear-shape. Can leave monthly wifi/elec/water bills in owner's name, just pay them yourself.

In my case, lease was for two years, owner wanted one month bond (forget getting that returned - standard practice here is you get a 'free' month at the end of contract). The GF and my own name were on the contract. The contract was the standard rental contract (costs 5 baht in a newsagent, maybe some TVer can post a link to download the .pdf [which is A4])

We did a few improvements without consulting the owner - painting, repairing electrics, rerouting plumbing, fixing doors etc - that is at your own expense. I would have requested owner's permission to undertake major structural changes eg. knocking out a wall.

'In case it goes pear-shape'? My GF shot through soon after I gave her 43kB to buy a new motorbike for the business, with the week's takings... what a silly old fawker I am. AA

"My GF shot through"

Can someone translate this into English, please?

The GF took off, never to be seen agaIn.

[oxo1947]

Have a Thai partner that I’ve known for 10 years and trust like family.

I can trust my Thai partner 100%.--------OP

Don't see any problem here OP...........just put it all in her name...

..........drop us all a line in a year or so will you, lets us know how the business is progressing.................

[ouagadougou]

"There is no reason for you to rent a guesthouse in your girlfriends name. If you have the lease in your name, you can do some work as a 'owner' without having a work premit."

I copied that from a post made in 2009. Is this still true?....anyone know more?

Not true you need work permit and to get 1 you need 6 staff and a salary of 35,000 Bt per month

speak to a lawyer

Hi Happy, I've read that 4 Thai staff are necessary to sponsor 1 foreigner for a work permit....2 Thai staff if married....this sometimes depends on the region you're in.

Also read that Europe and Australia, Canada, Japan, the United States of America (except Russia) requires a min. salary of bt50,000 per month.

Any idea what is true?

I assume it would be possible to create a business, sign the lease myself, not get a work permit or work, and live off profit.....this possible?

And yes, I plan on seeing a lawyer soon.

Thanks for your help....

Edited September 7, 2015 by ouagadougou

[fred Kubasa]

All your ideas are sound but to guarantee success : Hire female staff with large mammary glands,

arrange tailoring of tight blouses, shortened micro mini skirts, tape faces into permanent smiles,

teach them old fashioned, but highly effective, " Bunny Bend" from Playboy days. Won't see many

female guests but all seats filled anyway ! With all this in place soiled sheets, cold food, warm

beer will be, cheerfully, overlooked ! Good luck.

[SOTIRIOS]

...stop your nonsense...wake up...

..don't try to 'save the world' starting with your wife....

..if you have to unload your life savings to prove anything to her...she is not the one for you...

..and please do not start with 'It was all your idea'...

...proceed at your total peril...

..especially if you are putting it all in her name to begin with...

...ask around...learn 'the score'.....

....if you have enough money to live for the next 10 years...then do so...invest nothing...

...even with marriage...you lose half immediately....from hereonin.....and good luck getting your half back...

..did you hear the one about 'The man knew his Thai friend for 20 years...like family...so he built a house on his friend's land....

...as soon as there was the slightest disagreement...the gate locks were changes....along with some 'key paperwork'....long story short....the man ended up paying well over double the value of the house...in legal and related expenses......over 3 years...and came away with nothing....'

...it's not love...it's not even friendship...it is a premeditated calculation....and pretend......

Edited September 7, 2015 by SOTIRIOS

[shaurene]

I had a 9 room one in Pattaya for 2 years.

If you trust her go in her name.

If you want to work in it in any way you need to get a work permit but that could be very difficult as the job you will do can be done by many THAIS.

One day a Thai guy came to ask about a room, we had a laundry leased out on the ground floor the lady called me, I went down to see him. I said my wife is in the shower she will see to you. He asked to see a room, I took him to the top floor where our room was and showed him the room opposite. He started to ask me a price, I said not sure my wife will come in a minute. He kept on asking me and said he has to go and pick his wife up from school she was a teacher. I ended up saying "I think the room is 1600 month with water and power.

He then said ok I will talk with my wife and come back, then my wife came out of our room and spoke to him in Thai then he left. She said he will bring his wife back to see the room.

20 mins later 3 cop wagons arrived with immigration police, they told me I was working, this guy that looked at the room was with them, he worked undercover.

They said we take you to the police station and lock you up. I called my lawyer, he spoke to the head guy and told me 24,000bt would get me off, so I paid it to him at the immigration place.

Bastards,. So be very carefull.

My advice is leave it alone, there are to many around and mostly empty. You will never make any money. The police of immigration will be around every month for their tips.

Best thing to get into is invest in a 7/11 or family mart. Big layout but a money maker. Or a good pitta, get the machines from the USA, A good pizza will make you money.

I went into this few years back. Very easy cheap setup.

[Nemesis7]

Best of luck mate. Hope your dream comes true.

but always and always remember, its Thailand and here everything has its own unique way

[ggt]

Before you purchase a Guesthouse and a Thai wife...do yourself a favor and spend a few sessions with a clinical psychologist...you will be glad you did...

[Colabamumbai]

If it is making money now, why is it for rent.? Because it is costing the owner money every month?

[maidee]

if you plan to make a small fortune in thailand, start with a BIG one

[jamie2009]

I live in Pattaya which has 'wall to wall' Guest Houses most of which are currently empty, vacancy signs all over the place. I was looking for a room last Christmas/New Year, high season,spoilt for choice. Good luck but I think you will struggle not unless you can fill it with half decent Farangs who live here.

Edited September 7, 2015 by jamie2009

[smotherb]

I took over the lease of a guest house last year. Fairly straight-forward, just meet the owner, decide how many years you want to lease for, try to only pay a month in advance (no deposit) in case things go pear-shape. Can leave monthly wifi/elec/water bills in owner's name, just pay them yourself.

In my case, lease was for two years, owner wanted one month bond (forget getting that returned - standard practice here is you get a 'free' month at the end of contract). The GF and my own name were on the contract. The contract was the standard rental contract (costs 5 baht in a newsagent, maybe some TVer can post a link to download the .pdf [which is A4])

We did a few improvements without consulting the owner - painting, repairing electrics, rerouting plumbing, fixing doors etc - that is at your own expense. I would have requested owner's permission to undertake major structural changes eg. knocking out a wall.

'In case it goes pear-shape'? My GF shot through soon after I gave her 43kB to buy a new motorbike for the business, with the week's takings... what a silly old fawker I am. AA

"My GF shot through"

Can someone translate this into English, please?

Apparently, she called for a Mulligan on his double-bogie and continued with the front foursome.

[Swampypoom]

Make sure you have insurance to cover flooding during the monsoon season and research flood-prone areas and avoid them at all costs!

Start a guesthouse near a BTS/MRT station and advertise on airbnb to gain a steady influx of tourists and business travelers. Make sure you ask for cash deposit for all arriving guests refundable upon departure.

In-room safe should be provided and of course air-conditioning and 24-hour guest services. CCTV should be installed at reception and all relevant areas to protect yourself from theft and deception.

Wi-Fi is always a plus especially for travelers and finally for added revenue, perhaps an airport transfer service would generate more revenue.

There are many guesthouses & hotels so do something different than the rest and enjoy the rewards.

Consistency and customer care are paramount for repeat business and establishing a rapport with your guests. Think about the future and not what little money you can earn tomorrow.

And finally, save some of your profits and store them in your own savings account which no one but you had access to.

Even with trust, there can always be deception. There is an expression: greed breeds greed. Careful who you trust and ALWAYS HAVE PLAN B and remember only YOU can take care of YOU.

Good luck and take the SMART risk!

[khunPer]

If you run the guesthouse as a Thai company limited, you will need 4 Thai workers for 1 Work Permit, and a registered capital of 2 million baht (for 1st WP). No minimum salary required, but immigration may not grant you a WP without tax being paid of an income leveled around 50k baht a month, depending of country of your origin.

If partnership limited with Thai wife, only 2 Thai workers needed for 1 WP, wife can be one of them. Not sure about registered capital, but a lawyer can give you exact and up-to-date answers to all questions, first meeting with a lawyer is normally free-of-charge.

Any lease agreement up to 3 years can be made on a standard contract or just a contract your lawyer writes – best if it’s made in both Thai and English. Be aware, that if you are successful and wish to renew the lease, the leasing fee will go up.

Any lease agreement over 3 years needs to be registered at the Land Office and tax paid. That’s a security for you and it may be worth offering to pay the tax (quite low, use to be 1 percent of the lease). If a lease agreement for more than 3 years is not registered – also if it's are made as two separate agreements, each under 3 year – the agreement is illegal and void; i.e. you can be kicked out of your successful guesthouse business at any time.

Listen to advice from others who have been into business and guesthouse lease in Thailand; some have been successful and made money – I know one foreigner starting a small guesthouse and in few years ending up with both a fortune, big hotel, country club and real estate business – and some have had less success, i.e. lost (all) their money. So listen and think carefully, before you head into any investment.

I wish you good luck with you plan.

[ozyjon]

I remember a similar post recently.

[MiKT]

I took over the lease of a guest house last year. Fairly straight-forward, just meet the owner, decide how many years you want to lease for, try to only pay a month in advance (no deposit) in case things go pear-shape. Can leave monthly wifi/elec/water bills in owner's name, just pay them yourself.

In my case, lease was for two years, owner wanted one month bond (forget getting that returned - standard practice here is you get a 'free' month at the end of contract). The GF and my own name were on the contract. The contract was the standard rental contract (costs 5 baht in a newsagent, maybe some TVer can post a link to download the .pdf [which is A4])

We did a few improvements without consulting the owner - painting, repairing electrics, rerouting plumbing, fixing doors etc - that is at your own expense. I would have requested owner's permission to undertake major structural changes eg. knocking out a wall.

'In case it goes pear-shape'? My GF shot through soon after I gave her 43kB to buy a new motorbike for the business, with the week's takings... what a silly old fawker I am. AA

"My GF shot through"

Can someone translate this into English, please?

Apparently, she called for a Mulligan on his double-bogie and continued with the front foursome.

Load of balls.

[Friendly Stranger]

Hi,

Im looking into renting a guesthouse that is already up and running. Trying to sort out details as to how best to set up the business and myself.

Scenario:

** 16 room guesthouse that also includes a few small shops that are leased out.

** Im single, under 50, on a Tourist Visa, not American.no Amity.

** Have a Thai partner that Ive known for 10 years and trust like family.

** Likely be 3 Thai staffincluding partner who is proactive.

** Guesthouse is unlikely to generate a huge profit so Id guess either a sole proprietorship or some form of partnership would be best.

Hypothetically, what would be the best way to set-up the business?.assuming that I can trust my Thai partner 100%. As I understand it, a foreigner is able to lease land/business in their own name. But, Im also under the impression that once you attach a foreigners name to a Thai business you attract extra expenses, paperwork and attention.

Following are a few ideas that Im contemplating:

1. Marry Thai partner, get a Non-Imm O visa and have bt400,000 in a bank account for extensions and live off of any profit that may come. Create a sole proprietorship in wifes name only.

2. Marry Thai partner, get a Non-Imm O visa and work permit based on 2 Thai staff. Create a partnership with either Thai names only or mine as well.

3. Not get married, get a Non-Imm B visa and work permit after incorporating a business. Not likely to be an effective option due to expenses involved.

Im sure there are many other practical options to consider. My head is full of question marks that can ultimately only be sorted out through legal advice but looking to learn a little more before I start paying for consultation.

Any advice, corrections, insight greatly appreciated.

Not to be wise guy, but the questions about the visa are a bit basic, have you inquired with a lawyer? You can kill both birds with a consultation.

Ive looked into owning a GH, but the further into it I got, the more red flags:

Trust

local shakedowns

Competition meddling

saturation

low profit margins

Just do your homework inside and out, understand Thai psychology and don't invest an amount that will change your life.

[ouagadougou]

KhunPer, thanks for confirming some of the finer details.

How much different is running a limited partnership (or even sole proprietorship) once you have a foreigner as one of the owners and/or holding a work permit?...in terms of registration, taxes, yearly paperwork, eyes on business etc.

If things get excessively more expensive and complicated then I should at least have it as an option to stay out of the business entirely and live off of a Non-Imm O visa and profit. But, I'm not sure how that would work as some form of capital gains tax would need to be paid....I'm not into doing anything illegal.

To everyone else....thanks for the concern, wisdom and entertainment.

Guesthouse I'm looking into is not in Bangkok, Pattaya, Phuket or Chiang Mai....if that helps stimulate ideas.

[NOC]

"There is no reason for you to rent a guesthouse in your girlfriends name. If you have the lease in your name, you can do some work as a 'owner' without having a work premit."

I copied that from a post made in 2009. Is this still true?....anyone know more?

Not true you need work permit and to get 1 you need 6 staff and a salary of 35,000 Bt per month

speak to a lawyer

Hi Happy, I've read that 4 Thai staff are necessary to sponsor 1 foreigner for a work permit....2 Thai staff if married....this sometimes depends on the region you're in.

Also read that Europe and Australia, Canada, Japan, the United States of America (except Russia) requires a min. salary of bt50,000 per month.

Any idea what is true?

I assume it would be possible to create a business, sign the lease myself, not get a work permit or work, and live off profit.....this possible?

And yes, I plan on seeing a lawyer soon.

Thanks for your help....

I'm not sure which will be the worst investment. Throwing your money away on a guest house investment, or throwing your money away on a lawyer!

Follow the advice offered. Look around! Take your time. Run some counter-intelligence on your GF. Look for red flags. Have a back-up plan.

[shirtless]

Dont do it, there is a massive over supply and very few are making money, wait and see what happens this high season remember they will not tell you the pitfalls.

[thailand49]

You not need to explain how you got convinced into doing this.... the decision is up to you and if you do it be ready to lose money. I have a number of rental and wish I didn't.. First the more rooms you have the more problems.

Second, if the surveys are correct by Thais 70 plus % do not have a idea how to budget.

The main reason I say no is from your own words which you have doubts over " trust like family " then you say " Assuming " Make up your mind?

First sit down with her and go over what you are shelling out! Sit up accountant procedures for her.. set aside 1-or 2 rooms rent each month to emergency expenses and taxes.

The list goes on but I say no but you are already too deep to back out of a real rough ride! Run it like a Business and not you doing her a favor. It does not matter where it is located as they say here " same " the lower the rent the more problems!

Good luck,

Edited September 8, 2015 by thailand49