Attention Investors and Home makers

A Bangkok Condo Sale to suit all

It is 3 years old and a somewhat distressed sale. When off plan it sold for 1.9m Baht, today the same owner asks just 1.7m Baht and is looking for offers!

This I think is a pretty good deal when you take into account all the main selling features of this property, which when gathered collectively = a very easy Bangkok condo to rent out and get a regular income from.

It is very well located just 750 meters from BTS Udomsuk and right out front is a motor bike taxi rank, making journeys even easier. It offers secure parking and security from guard patrols etc. It has a very nice common swimming pool and garden area, as well as a nice gym. It seems to be a pretty well run place right now also.

It may also be crucial to note that the area itself is quite ripe for future development which will have a very positive effect on land and condo values as at this present moment in time one could say it is a little sparse in those regards. There is one other condo development over the road, but that is that so far to date.

 It is top floor, the eleventh, with nice balcony overlooking the pool, so it will be quieter than most with no neighbours above. It also has the fully fitted out and equipped kitchen and is being offered with most of the furnishing items you will see in the pictures. 

Its value is likely around 10,000 baht a month in the Bangkok condo rental market, but if advertised at 9,500 for a true one bedroom of 36 sqm, it would I am quite certain rent very fast as normally this will get you only studios. With very little nearby to compete, again it is likely not to stay vacant for very long. 

All in all we feel that this Bangkok condo sale property represents a good buying opportunity. Click Bangkok Condo sale to read up on this opportunity.

The future of the Bangkok Condo Rental market

I have been living and working in Thailand since 1998, many of those years working in the Bangkok condo rental and sales market for a great many of them. In those years I have seen a very clear downturn in rental values, or perhaps I should say in market demographics. No longer are the mid-range properties renting as they used to be. But why?

Ten years ago when I moved back to Bangkok after some time away, things had not changed much in the condo rental & sales market. Overseas buyers were still buying condos and renting them out and the norm of this was that they were buying condos for between 6 - 9 million Baht and then renting them at 35-50K per month. These were fairly easy to rent out back then as there was still a very healthy number of expats in well paid employment positions.

Today however there are less and less expats here in those high paid positions. As Thailand has developed, more and more Thai people are able to do the jobs themselves now, and normally they will be on lower salaries than the expats used to be. This of course means the market place of people looking to rent a condo for 35-50K a month has shrunk significantly.

In the more recent years this has shrunk again and now it is much less common to find many people looking over even 25K a month at all. This is not going to change any time soon, indeed it may never change as more and more Thai people become the rental clients for agents with budgets of between 6 and 15K a month in general. There are some occasions where people are indeed looking up to 25K as a working couple or family, but again this is becoming less and less common.

So looking to the future, this is going to be a continuing trend and until the average wage here reaches the needed levels, many of those 35-50K a month executive condos will remain empty or very hard to rent at best. As Bangkok continues to grow, as slowly as it is, into more and more significant business hub in SE Asia, the more and more Thai people will leave the countryside and move to city jobs.

With this influx of new clients comes a new influx of tenants to let your property to. But those clients will be the lower paid office workers, secretaries and similar perhaps on salaries of 15 – 25K a month and thus unlikely to be considering condos at much more and 8 or 9K per month.

The conclusion is that with this shift away from overpaid expats to the much lower paid indigenous population will come investors being well advised to buy the very small new condos now being built and sold at around 1.2m Baht. If previously you were thinking to buy a condo for 8 million and rent it for 45K a month, you would now be well advised to buy 7 condos at 1.2m Baht, each renting for around 7K per month. The income will be similar but more crucially your chances of having regular tenancy will have just increased many times over.

Buying a Condo in Bangkok for Investment

There is a great amount of debate on this subject right now and a great many opinions. Personally, as I will show in the next few articles in the coming week, opinions from any of us are likely as valid as any of those that come from the experts and commentators on this subject.

                             

I guess the first question should be, is the Bangkok condo sales market heading for a period of overheating, overbuilding oversupplying, call it what you will. Potentially yes, this is a danger for any such developing nation’s capital city and I have to say from my first hand experience there are a few red flags out there the could stop this bullish market.

To dive into this any further and in any great detail we would have to take each market sector as a totally separate market entity as from what I see they are all suffering slightly or very different fates. For example, right now the very low end of the market, say under 1.5m baht condos aimed at the indigenous market, seems to be doing very well and I see little evidence of swathes of empty rooms.

Not so for the medium and higher ends of the market. I will name no names, but in recent outings to towers in Thong Lor, Ekamai and Onnut I have found a great many rooms unsold and or unoccupied. In one new tower in Ekamai I have seen a range of condos on sale from around 4 Million to 20 million perhaps 60% sold only. Of the remaining ones sold hardly any had been rented.

And here lies a potential issue. I have found that a great many of these condos have been bought out by single investors who buy 10-20 at a time if not more. These units will often remain empty as the owners have no time not true intention or inclination to let their new condos out to the market, leaving some new towers perhaps 50% occupied or less.

Of course by holding them in this manner, they are falsifying the Bangkok Condo Rental stats as a whole, as perhaps thus encouraging further new developments to crop up and up as we feel there are not enough room available to fill the gap in supply. Should even 50% of these types come onto the rental market we could see an overstocked situation right away.

And here ends the first piece of guidance. Is the future Bangkok Condo rental market secure enough? Will you always be able to rent you condo for say 11 months a year minimum to gain the ROI you bought it for? Or will it as so many do, stay empty for at least a third of the year?

In my next piece I will write in more depth about the best sector of the rental market at present and how I believe it will evolve in the next few years and beyond.