Considerations for Property Investing
Especially for beginners, especially in Thailand.
Buying-to-rent is a simple concept that’s clearly in the minds of the masses. Property is widely considered to be one of the safest and secure investment types in the world, this has proven to be true time and again, throughout the entirety of human existence!
As they say; ‘ya can’t go wrong with property’.
Buying to rent, as a means of property investing is often the way most people start. If you are fortunate enough to have money in place or can secure finance to buy a property, then the concept is simple;
Once you have acquired your property, you simply find a tenant to occupy it, and begin collecting the rental money each month. Your money is secure in the property itself and can be sold in the future to liquidate your funds.
In time of course, this will most often come with an increase rise in value, giving you extra ‘profit’ from your investment.
On the face of it, working out your % return is easy enough.
Take the cost of the property at the $ Amount – Take the Avg. rental price for the property type and divide that by the initial cost of the property. In Thailand’s property market, in areas such as Bangkok, Pattaya and Koh Samui, this generally works out to an average of around 7% – 9%. Obviously more than most banks or other ‘riskier’ investment options right now.
So a no brainer then!
Easy game right?
The above formula is forgoing a number of ‘hidden’ or to put it another way ‘unexpected’ costs.
Firstly, most yearly maintenance fees average around the equivalent of a month’s rental income. Secondly any time the unit sits un-rented either between tenants or finding your first, it eats into your yearly calculations.
This also assumes you don’t use an agent to find you a tenant, if you do there’s another month’s rent gone in commission fees!
So to be more conservative in our estimations, let’s assume an annual rental period to be 10 months instead of 12, reserving 2 months rental income for the added costs.
Still sounds like a good return on your money.
The tenant misses a payment, the air conditioner breaks down and needs replacing, the water heater stops working, the apartment above has a water leak and ruins your ceilings, the TV needs upgrading, the mattress needs replacing, Godzilla invades and rips the roof off your building!
OK, i don’t want to get too carried away with the doom and gloom. This isn’t about scaremongering people away from the idea of property investing. As we said at the start;
Ya can’t go wrong with property!
However there is a better way of doing it…
- How about if you could earn that 10% in full or even more, but without the headaches?
- How about never having the problem of wasted time or rental loss when trying to find a tenant.
- How about never having to worry about maintaining the property, but knowing it’s being taken care of?
- How about never paying a real estate agents commission again?!
It’s almost sounding too good to be true…But it’s NOT!
This is EXACTLY what the New Nordic Group offer.
Complete peace of mind, guaranteeing you at least a 10% return on your money. Within a fully managed group of resorts and secured against a property you own. A win-win-win for everyone!
Click HERE for complete details on all of New Nordics projects.
If you are thinking of ‘going it alone’ and using peer-to-peer letting sites like Airbnb in Thailand then there are a whole lot of other considerations to take into account. Read about the potential pitfalls of using Airbnb to rent out your Thai property