Things to Consider: Renting Out your Condo in Bangkok
If you happen to be not using your apartment in Bangkok and especially if you are away most of the time then it would be wise to have it rented for an amount of time so that it would also generate income. But before doing so, check everything you need to learn about Thai laws in order to create a successful transaction. The next factor you need to consider aside from the property you have would be the rental price you charge for it in the market. Key questions like if the market is able to accept the price that you set or what other cost would be important to include apart from the rent itself. Here are some guidelines you may want to consider to give you a clearer idea of what would be the most realistic and at the same time a great profitable deal for you.
Browse the classified ads of the leading newspapers or property website and property Management Company list so that you can have an idea about the current pricing schemes in the market. You can also make calls to the owners themselves and try to negotiate and see how much discount and what final prices they could offer you. This dynamics will also help you get a better feel on the negotiation process. Though you should also take care to do research on a wide market and not concentrated to a few developers as the prices they may have set is inflated. If you happen to live in a building where they are tenants then it could be a good idea to come up to them and introduce yourself properly and what your intent is. You can find out about the terms of their lease and especially give you an idea of the amount they pay for it. It would really help to be friendly and warm while conducting this interviews so that you can get their confidence and help you out. It also needs to be done in a casual manner and not as business-like to prevent them from assuming you are on a marketing job.
Having a furnished unit will definitely add value to your property and could make it justifiable for you to increase the rent compare to the units which are just barren. The rental rate can be increased by as much as 12 to 14 percent as long as the quality and number of furnishing you have also justify it. Make sure that the appliances you have and the furniture like the couches and bed are clean and in good working condition.
The location of the condo is a prime consideration also. Having a condo in a prime location that’s near school, malls, restaurants and workplaces is a definite plus. Being close to the BTS Skytrain is good too. Having these factors to your advantage will give you the opportunity to raise the rental rate of your condo unit. Amenities are also something that tenants would like to have. Take advantage if your property has fitness gyms, swimming pools, recreations decks, etc… This will also add a premium to the rental price you have because the tenants would not need to go out of the building and would definitely save them in costs in the long run as well. The typical arrangement in Bangkok when it comes to rentals is that is usually over 12 months. If a tenant wants it to be shorter they usually suggest looking for serviced apartments rather. But there are also a few owners who rent their space out as short as even three month. The only important consideration is that the property you are renting out should earn and provide you positive and continuous cash flow.
Having similar condos and buildings in your area will be your competition. You might need to play with the market by lowering down the rent so that it will be occupied fast and that the prospective tenants will be attracted to your Bangkok condo. Just be sure though that even if you lower down the prices is that you are still earning. The most important of all is about the ROI or return of investment in your endeavor. This would mean computing for the cost of purchase, maintenance and the renovation of the unit. Also include the mortgage payments, real estate insurance, property taxes, condo management fees, etc. in your computation to determine the break-even rental income. Then you can begin adding the profit and just adjust it accordingly to the current market prices but be sure to earn out of your investment.
The current Bangkok Condo Rental rates as of the second quarter of 2011 are as follows with the corresponding areas and the rental rates per square meter are; Central Lumpini, 415 – 425; Silom, 347 – 351; Sukhumvit, 355 – 362; Riverside, 328 – 334; and the Average is, 361 – 368. This basically gives you and idea of what the trend is in the market but you still need to back this up by doing your research after all it is you doing business. [googleplusauthor]