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TRENDS AND TIPS TO RENT OUT A CONDO IN BANGKOK

TRENDS AND TIPS TO RENT OUT A CONDO IN BANGKOK

The residential type of condominiums in Thailand is continuingly growing in popularity for more than 10 years now. The market is appealing not only to Thais but also to foreigner buyers. Despite the USA-China trade war, the Thai Baht’s strengthening and the oversupply in Bangkok condo market, investing in real estate is still a good choice of capitalizing your money in the Kingdom.

The connectivity, accessibility and mobility due to the development of the integrated transport system and infrastructures in Bangkok, and other regions of the country like those along the Eastern Economic Corridor (EEC), in Chonburi, Sriracha, Pattaya and Rayong, are attracting more Thais and foreigners to work and rent condos in these locations.

Currently, the average yield from renting out condos in Bangkok is 4% per year. Buying a condo is a choice of investment that many would be interested in. A lot more reasons to support the condo market in the capital of Thailand is related to the increase of road traffic issues and oil price, as well as the changing of behavior by the consumers.

Thais & Expats

For someone willing to invest in real estate, there’s one key factor to have in mind. It is well known that more people are going to come to work in Bangkok. They would like to stay nearby their workplace because they can save money and spend less time on the go either by public transportation or by car. Buying in the right districts always comes with the idea that someone will need to rent your condo. This applies not only to Thais but also to foreigners.

Nowadays, the rental market becomes more desirable due to the mass transit system extensions that allow people to commute to their jobs. One of the most popular areas for expats is Sukhumvit along with the BTS stations of Siam, Chitlom, Ploenchit, Nana, Asoke, Thonglor, Phrom Phong, Ekkamai, Phra Khanong, and Ou Nut. Their favorite areas include Sathorn, Silom, and Rama 9, all connected by MRT.

Angel Real Estate condo selling figures show a greater number of foreigners purchasing in Ramkhamhaeng and Thonburi side, both to be linked by MRT. The majority are buy-to-rent investors. The condo-hotel type of properties is a new trend that possibly can offer steady yields to the buyers. Sathorn and Rama 9 are some locations with this option available.

Thais and expats rent anywhere in Bangkok not only where there are mass transit stations, but also hospitals, commercial and office buildings, schools, universities, and more. Such facilities are great contributors to the increase of rental market potential in any part of the city.

To rent out faster, the landlord must have the unit fitted with all the furniture needed for living. Sofa, beds, mattresses, curtains, wash machine, potteries, and television are mandatory. The more the condo is ready, the better chance you have to get a tenant. Generally, the rental period is around 1-2 years and the minimum initial rental period is 1 year.

Younger Generation

The new Thai generation is more independent and would like to have their own space, rather than living in their parents’ home. They don’t want to cope with traffic jams around Bangkok, thus would prefer a more comfortable life. They have work, income, and wish to buy their place for living. Instead of staying far away, where their parents live, they can choose to be closer to the workplace and have more privacy for themselves.

The majority don’t have enough money to buy a house. Either a single detached house, a double house or a townhouse is much more expensive than a condo to the point the banks wouldn’t grant a loan to any. Moreover, the location of affordable houses is even further away from outside the city. Housing is the most desirable anywhere. It’s up to the buyers if can afford it or not. Hence, they are buying or renting condos instead.

Two Easy Steps Homework

Buy-to-rent investors are advised to study two important factors before purchasing a condo, which will help them to define the potential renter’s profile. Firstly, they need to know what kind of customers the area accommodates. If it is near a school, customers could be the parents; in a business district, they could be salary persons or executives. Nearby commercial buildings, most probably they are tourists. Online platforms such as Ctrip, Agoda, and Booking.com have several apartments listed for the latter group.

Secondly, it is useful to know the needs of the customers. Everyone has different preferences. A salary person, either Thai or foreigner, might want to live near the workplace or a very convenient commute. A tourist might choose to book an apartment or a condo unit through the online travel agency. It’s more affordable than staying in hotels and includes a wider range of appliances, which adds to the comfort. A teacher or a student surely will need to live nearby the school or university.

For example, the Plum Condo Phahol 89, a project by Pruksa with 2,220 of units outside of Bangkok shouldn’t be popular at all. But it happens to be built in front of Rangsit University, while Bangkok University (Rangsit Campus) is not far away. Condo units are the small sized (22-28 sq.m.), and the selling price is low.

Many students will not choose to stay in dorm rooms because the parents would rent the condo units instead. Moreover, most of the students are not going to cook, since the area is served by several convenience stores. They can also eat on campus at a low cost.

Japanese & Chinese

If the renters are expats in Bangkok, it is necessary to know which neighborhoods meet their preferences. From Asoke to Thong Lor on Sukhumvit Road one can easily find westerners, mostly Europeans, and Americans.

In Phrom Phong, Ekkamai and Thong Lor they could be Japanese and Koreans. Other Japanese would rather escape Sukhumvit Road because it’s overcrowded and the rents are higher. Moreover, not all Japanese companies with business in Thailand have the same budget to accommodate their native employees.

Instead of staying exclusively in Phrom Phong, Ekkamai and Thong Lor, they also go to Bangna, the easiest gateway out to Sriracha, where Japanese industrial companies are operating. Many are renting in Sriracha. It’s roughly estimated that around 10,000 Japanese are living there.

Japanese tenants surely appreciate units fitted with bathtubs. They would come with their wives and kids; therefore, they probably choose units with at least 2-3 bedrooms. They won’t mind much about the size of the condo since, in their home country, they are used to smaller ones because most Japanese developers focus on building this way to cater to domestic demand.

In recent times the number of Chinese renting homes in Bangkok has increased. Many are staying in Huai Khwang and Rama 9. The first neighborhood is attracting Chinese entrepreneurs to the so-called “new Chinatown”, a place with Chinese restaurants serving typical regional dishes from Yunnan and Guangxi, and Chinese-style coffee shops. All to satisfy the demand of tourists, mainly from their home country. The second is part of the new Bangkok’s Central Business District (CBD). This vibrant area is attracting more foreigner investment, including Chinese interests. Working in both neighborhoods, Chinese migrants also need to rent homes.

Westerners

Westerners with high salary mainly rent condos in Silom, Sathorn (both prominent locations of the old CBD), Phaya Thai, Ratchathewi and Ari. In these quieter neighborhoods, they pick high-end units. Most probably they mind the space, so they usually demand bigger size units. Tenants on this group are mixed. Some stay alone and others live with family. They may also have special preferences like choosing pet-friendly condominiums.

If you need any further help or want to have a chat with us, please feel free to write an email to daniel.O@angelrealestate.co.th. We will be more than happy to discuss and support your international real estate investment.

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Daniel Oliveira

With over 10 years experience of journalism between Macau, Special Administative Region of People's Republic of China, and Portugal, Europe, I developed a special interest in real estate by observing closely the changes and impacts the sector has in people's lives. It was then a natural choice of going in depth and be passionate about the industry.

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