Whether you actually set out with the intention of buying-to-let or wish to become a landlord by default because the property market was not too conducive to selling condos, The Pattaya Condo Guide can help you find a tenant for your condo property.
Many investors are looking to buy a condominium property here in Pattaya and Jomtien, but, rather than choosing to stay in a hotel, many opt to rent initially. Some circumspect investors can take up to a year to decide on a property to purchase, so it obviously it makes a great deal of sense to stay in rented accommodation rather than a hotel.
Renting has long been a favourite of expat businessmen or executive, sojourning here for a medium-term contract, and able to afford high rents, especially in serviced apartments, because of their generous housing allowances. Renting has also been a favourite for those who choose to stay in Pattaya for a half or a quarter of the year, regularly returning home in between. It has also been the only choice for those expats wishing to stay long-term, but without the wherewithal to buy a condominium or house.
This, like all real estate matters, will first involve due diligence, researching the rental market to decide where best to buy a condominium, what end of the market you wish to appeal to, what fair rents to charge, the ins and outs of landlord-tenant relationships, rental contract details, exactly what your obligations as a landlord will be, the incidental costs, including taxes, and the risks involved, potential rental yields and capital appreciation over time. You can surf the Internet for answers, ask friends or acquaintances who are already landlords, or quiz real estate agents. However, be aware that many real estate agents have their own property management facilities, so unless you are engaging an agent with the specific intention of buying-to-let, don’t expect the most comprehensive advice from them otherwise. Many developers have rental management schemes for their condominium projects if you buy through them, or you can hire a dedicated property management company or a real estate agent to handle all the complexities of renting if you don’t want to cope with the everyday realities of letting, because, make no bones about it, renting can be a real headache if not handled astutely. Among the roles that property management companies undertake are finding and vetting potential tenants, advising on any necessary refurbishment before tenants take up residency, collecting rents, and managing the property, especially if the landlord is absent.
The first factor working in your favour, however, is that Thailand, like most SE Asian countries, is pro-landlord, so you have the force of the law behind you. Rental contracts are legally enforceable and admissible in court and the police can be called upon to evict ‘delinquent’ tenants for breach of contract, especially non-payment of rent. Tenants do not have the right to stop paying rent if the landlord fails to carry out reasonable repairs; only when the rented condo unit becomes completely uninhabitable can the tenant terminate the lease. The cost of maintenance can be one of the drawbacks of being a landlord, with responsibility for repairing or replacing broken air-conditioners, water heaters, inadequate fixtures and fittings or electrical utensils. Because most tenants will never take as much care of a rental property as if it was their own, expect cleaning and replacement costs when they leave, which may or may not be completely covered by the deposit.
The first step in your research is to assess how much rent you can fairly charge. Pattaya caters to both the short-term tourist trade and medium to long-term expat residents and executives, usually on annual contracts. Seasonal rental variation should be taken into account here, especially for the tourists. The majority of condo tenants will require swimming pools, fitness centres and other local amenities, such as restaurants and laundries. Location is vitally important, likewise the number of bedrooms, ready access to transport, entertainment and shopping facilities. Tenants will also have high expectations as regards furniture, utensils, cable TV and Internet access and full-time security. High-end rents will normally range from Bt50,000 to as much as Bt250,000 per month, for the really high-end, whereas the middle and lower end of the market can expect to command monthly rents ranging from Bt5,000 to Bt49,500.
The more presentable your condo, the better your chances of being able to rent it out, especially considering that you will face considerable competition. If not already up to standard, refurbishment or redecoration may be in order. Attractive, but sturdy, functional furniture is a must, not only for its universal appeal, but also in terms of replacement costs due to wear and tear. The decor should also be bright but universally attractive and should include house plants, the aromas from which can be supplemented by essential oil burners whose flagrancy permeates the condo. Extra amenities like a jacuzzi in the bathroom or on the balcony, wall-mounted LCD screens or home theatres and a even maid service will give you the leading edge and the additional expense can be recouped from higher deposits.
Thailand has no specific tenant protection laws, therefore, the contract is the tenant’s only safeguard. There are likewise no standard rental contracts so individual ones have to be drawn up and should be as comprehensive as possible, but open to negotiation. Fairness and leniency will enhance your reputation as a landlord and encourage custom. The following are the main areas to be covered.
Whist legal proceedings can be taken instances of breach to evict tenants, resorting to the courts is often not the best policy because of the length of the court process, accordingly negotiation or arbitration is preferable at the present time. However, this situation may well change if the new Customer Protection Act comes into effect generally, as court proceedings can then take place within 30 days with a considerably faster resolution time.