Buying an apartment for rental purposes as investment

[DavidTS]

Hi Guys.

 

I am considering buying an apartment on the Sukhumvit main road near a BTS station and either renting it out on AirBNB or renting it for long term.

Was considering something around the $130,000 investment for a 1bed 1bath place on one of the high rises.

I do not intend on staying in the long run in Thailand but would like to keep it running if it's profitable from another country. 

Do people here have experience with such an investment ? Pros and cons would be great!

 

Thanks,

David

[chiang mai]

No, but you have to ask yourself what sort of investment, property or otherwise, 130k would buy you in your home country, somewhere that is regulated and where your investment is protected under law AND, more importantly, isn't an oversupplied commodity.

[Peterw42]

Not sure if you have read all the recent posts about crackdowns on short term rentals. It is illigal to rent out your condo for less than a month unless you are a hotel. Its always been the law, recently being enforced more and more. So Air BnB probably not a great option.

Long term rental in some areas can get a great return, better than the same money in the bank.

[trogers]

Great if you are happy with getting USD5,000 net return per annum on your USD130,000 capital outlay, before depreciation.

[coxo]

I have a couple of condo's on Sukhumvit rented out permanently, if you pick the right location you will get a good return, I get 7% per annum and the agent takes there chop above that, all in my name and I live off the income, works well for me.

 

[cyberfarang]

Requires a work permit to run a property renting business and to be registered with the tax office.

[williamgeorgeallen]

if you are not living nearby to keep an eye on it forget it. and forget air BnB. condo ownership bans short term rentals. not to mention there is quite a workload with running an air BnB rental.

[williamgeorgeallen]

17 hours ago, trogers said:

Great if you are happy with getting USD5,000 net return per annum on your USD130,000 capital outlay, before depreciation.

minus agent fees and repairs and condo fees. probably not much left over at the end for you. can borrow against your 130k and buy in your home country. probably there you can trust your agent to look after the place and get some capital growth. why buy in thailand?

[coxo]

My Thailand property gives me a better return than my Aus property, unless you own property here you are not qualified to comment period as you don't know, you do not need a work permit to own and rent a condo on a permanent rental basis using an agent, the annual fee's work out at one months rent.

 

[williamgeorgeallen]

4 minutes ago, coxo said:

My Thailand property gives me a better return than my Aus property, unless you own property here you are not qualified to comment period as you don't know, you do not need a work permit to own and rent a condo on a permanent rental basis using an agent, the annual fee's work out at one months rent.

 

i have owned many properties in thailand. rents did not improve over the 7 years i owned them and the value of them went down with time. the small amount of rent did not justify the hassle. i have relocated all my funds to new zealand where i can hold  a portfolio of about a million dolllars on a 50% mortgage. my rental returns run around 7% and my capital growth is about the same, some years more.

[lvr181]

With any investment and the associated financial risks, you MUST also consider "political" risk.

 

Do not invest any more than you can afford to lose outright. Many people have made a small fortune in Thailand, out of a large one. 

[mcfish]

Buy right next to Nana or Asoke bts and you will always have a steady western occupied income source.

 

I have no trouble renting my places out on air bnb monthly. You would have to enjoy seriouse pain to rent out nightly even if it were legal.Air bnb tenants are very needy people..

[F4UCorsair]

Nuts to invest in property............... ANYWHERE in my opinion.

 

Buying and selling costs must be factored in, maintenance issues, idiot tenants causing damage, poor returns compared with equities, time to sell, little, if any, legal protection, and on it goes.

Invest in blue chip shares, preferably in your home country, with advice, and you'll do better, e.g., if you invested in Australian equities right now, there is good capital growth and outstanding dividends, 7%+ is not unusual, and in the biggest, safest companies.  if I ever decided to buy property, it wouldn't be in a foreign country, and never, ever in Thailand.

Edited August 15, 2016 by F4UCorsair
spellcheck

[Peterw42]

1 hour ago, coxo said:

My Thailand property gives me a better return than my Aus property, unless you own property here you are not qualified to comment period as you don't know, you do not need a work permit to own and rent a condo on a permanent rental basis using an agent, the annual fee's work out at one months rent.

 

This is Thai visa, you don't let the facts get in the way of a good story.

My condo gets a better return than Australian property as well. There are some great rental returns in the right location. 

[bark]

1 hour ago, williamgeorgeallen said:

minus agent fees and repairs and condo fees. probably not much left over at the end for you. can borrow against your 130k and buy in your home country. probably there you can trust your agent to look after the place and get some capital growth. why buy in thailand?

130,000 will buy only a slum home in most countries.

His name is David, not Dude from bombed out Syria.

[F4UCorsair]

1 hour ago, coxo said:

My Thailand property gives me a better return than my Aus property, unless you own property here you are not qualified to comment period as you don't know, you do not need a work permit to own and rent a condo on a permanent rental basis using an agent, the annual fee's work out at one months rent.

 

 

 

I disagree coxo.   That's like saying that unless you own a Honda, you are unqualified to comment on Hondas.

 

Research will throw up the answers for anything, anywhere.....this is 2016, and the internet has been with us for a while now.

 

I can't comment on WP's.

 

Compare the buying/selling costs of a property with a similar value in shares.  To sell a million $$ property in Australia costs 2%, $20,000 PLUS advertising, and I've been quoted $5000.00.   

 

Sell a million $$ worth of shares on Commsec, and the cost is about .15% = $1500.   Then there are all the other issues with owning property!!

[F4UCorsair]

1 hour ago, williamgeorgeallen said:

minus agent fees and repairs and condo fees. probably not much left over at the end for you. can borrow against your 130k and buy in your home country. probably there you can trust your agent to look after the place and get some capital growth. why buy in thailand?

130,000 will buy only a slum home in most countries.

His name is David, not Dude from bombed out Syria.

 

Gotta read what he said bark.   "...can borrow against your $130K, etc".

[Thaidream]

If this is your  total savings- I would never use this as an in vestment in Thailand . There is too much uncertainty  both politically and economically. If this is extra money that you can afford to lose you can certainly consider it. However, before I spend anything in the housing market- I do all the research myself to include a personal visit to the land office to find out who the owner of the land is and are there any encumbrances. in addition, I would investigate the Condo, condo Board and any proposed projects  or liens against the condo. If you invest in Thailand- you should really live here to watch over your investment. Frankly speaking, unless you fully understand the Thai system; Thai psychology and the nuances of business here- I would hold onto my money. Remember, cash is king and you can't eat land or the air a condo is built on. Thailand is rife with beautiful brochures and booklets on land and condo deals. Unfortunately too many of them end up never being built or way overpriced,

[vukovar77]

Buy condo in Thailand as a investment is very bad idea!!!

To rent condo ,you need work permit !

[bazza40]

2 hours ago, F4UCorsair said:

Nuts to invest in property............... ANYWHERE in my opinion.

 

Buying and selling costs must be factored in, maintenance issues, idiot tenants causing damage, poor returns compared with equities, time to sell, little, if any, legal protection, and on it goes.

Invest in blue chip shares, preferably in your home country, with advice, and you'll do better, e.g., if you invested in Australian equities right now, there is good capital growth and outstanding dividends, 7%+ is not unusual, and in the biggest, safest companies.  if I ever decided to buy property, it wouldn't be in a foreign country, and never, ever in Thailand.

100% agree. The number one rule of investment is never to invest in anything you don't understand. If anyone on this thread thinks they understand all the ramifications of condo ownership, renting and political risk in Thailand, they are kidding themselves.

[mcfish]

57 minutes ago, vukovar77 said:

Buy condo in Thailand as a investment is very bad idea!!!

To rent condo ,you need work permit !

Idiot post of the month!! well done as there were a lot to choose from

[trogers]

6 hours ago, williamgeorgeallen said:

minus agent fees and repairs and condo fees. probably not much left over at the end for you. can borrow against your 130k and buy in your home country. probably there you can trust your agent to look after the place and get some capital growth. why buy in thailand?

 

My figure of USD5,000 is net, already less agent fees, maintenance and 6-8 weeks vacancy period between tenants.

[thaibook]

strangely, no-one has mentioned foreign exchange risk.  Property should be viewed as a medium to long term investment (unless you are flipping which is labour intensive and may prove tricky for a farang in Thailand).  Hence the first consideration is where will you be or where do you wish the income to be when you will need it?  If you will not be in Thailand, start researching the property market in the country where you will be unless you expect the Thai Baht to appreciate in the long-term against your home currency.  The exchange rate will be even more of a multiplier (or divider) for any capital appreciation on sale as typically you are likely to try to realise that in a single spot transaction.

 

 

 

[coxo]

I live in Thailand and have done for nineteen years, hence I am not worried about foreign exchange rates as my property pays me in Thai baht and that is what I use to live on, for the past ten years I have had a good earn from my condo's, enough to live on with my family, at the end of the day I can sell them and get capitol back, prior I had blue chip shares and the quarterly cash return was useless, the best thing I ever did was sell ALL my Aus shares and buy property in the country where I live, no regrets at all, I am considering selling my house in Aus to invest in a couple more Bangkok condo's as the monthly return is a lot better. 

Know lets get all the negative comments from those that know nothing about real estate in Thailand and probably have no property in there home land or here!

[lvr181]

2 hours ago, coxo said:

I live in Thailand and have done for nineteen years, hence I am not worried about foreign exchange rates as my property pays me in Thai baht and that is what I use to live on, for the past ten years I have had a good earn from my condo's, enough to live on with my family, at the end of the day I can sell them and get capitol back, prior I had blue chip shares and the quarterly cash return was useless, the best thing I ever did was sell ALL my Aus shares and buy property in the country where I live, no regrets at all, I am considering selling my house in Aus to invest in a couple more Bangkok condo's as the monthly return is a lot better. 

Know lets get all the negative comments from those that know nothing about real estate in Thailand and probably have no property in there home land or here!

 

You have a GUARANTEE of getting all your capital back (plus inflationary growth)? Good luck, many won't!

 

As for your "blue chip" shares, I think you needed to have a savvy financial adviser because income streams, tax paid or not, ( depending on your tax position) for many shares have done investors well. Or maybe the shares were your perception of "blue chip"?

 

Shares, like property are both long term investments.

 

Do you think that someone like Warren Buffet is a speculator or dumb?  Maybe your knowledge of share investing is limited hence your decision to put all your eggs in one basket and that could lead to your downfall. Heard of risk diversification?

 

Do not take this a a criticism but as advice.  As a Thai person may say, up to you 

[chrisandsu]

3 hours ago, coxo said:

I live in Thailand and have done for nineteen years, hence I am not worried about foreign exchange rates as my property pays me in Thai baht and that is what I use to live on, for the past ten years I have had a good earn from my condo's, enough to live on with my family, at the end of the day I can sell them and get capitol back, prior I had blue chip shares and the quarterly cash return was useless, the best thing I ever did was sell ALL my Aus shares and buy property in the country where I live, no regrets at all, I am considering selling my house in Aus to invest in a couple more Bangkok condo's as the monthly return is a lot better. 

Know lets get all the negative comments from those that know nothing about real estate in Thailand and probably have no property in there home land or here!

No offence here but is your house in Australia really a shed ? 

[pipeflaw]

21 hours ago, williamgeorgeallen said:

i have owned many properties in thailand. rents did not improve over the 7 years i owned them and the value of them went down with time. the small amount of rent did not justify the hassle. i have relocated all my funds to new zealand where i can hold  a portfolio of about a million dolllars on a 50% mortgage. my rental returns run around 7% and my capital growth is about the same, some years more.

This nails it on the head as to expected returns on rentals.  I have 7 rental properties in Thailand and won't acquire any more, and I can't sell until the market improves.

[williamgeorgeallen]

18 minutes ago, pipeflaw said:

This nails it on the head as to expected returns on rentals.  I have 7 rental properties in Thailand and won't acquire any more, and I can't sell until the market improves.

 

18 minutes ago, pipeflaw said:

This nails it on the head as to expected returns on rentals.  I have 7 rental properties in Thailand and won't acquire any more, and I can't sell until the market improves.

i know where you are coming from. took a bath on the last place i sold in pattaya. was worth it to get out.

 

[smutcakes]

On ‎8‎/‎15‎/‎2016 at 8:14 PM, mcfish said:

Idiot post of the month!! well done as there were a lot to choose from

 

Which part of his post is foolish? Certainly not the part questioning the legality of a Foreigner leasing out the property.

[theguyfromanotherforum]

This is not even a question of work permit.

 

In Thailand you are not allowed to rent your unit on AirBnB. The building simply won't allow it and may call the police on you and your "guests". I have seen many buildings with notices warning potential AirBnB "guests" that the building is not a hotel and anyone staying there could be prosecuted. This is in Bangkok, BTW.