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Buy to Let – Good Idea or Not?

from Ed B
Hi, just wondering about investing in a BTL (Buy to Let) in Thailand – any thoughts? Is this a bad idea?! Basically looking at options to make (hopefully!) a quick buck over the next two years, so trying to find out about more about the state of affairs…

editor: As far as buying a house to rent in the LOS it can be more problematic than it is worth.

First off, the rents as a percentage of invested capital are generally lower than other countries (although not always). Here are some examples that I know of: 2 m baht house rents for 5,000 per month GRM (gross rent multiplier) 33 1/3 5 m baht condo rents for 25,000 per month GRM (gross rent multiplier) 16 2/3 Once you get into the super nice houses with invested capital of 10 m or more the rents go up nicely. There is an expat community working in the auto industry outside Rayong. There is a demand from this segment of the population for high end luxury properties which rent for 80,000 baht/month or so. At this level the GRM would be about 10+.
In the states the GRM for houses used to be about 10 now it has gone up to about 20.

Secondly, Thailand is subject to a boom and bust cycles. Right now we are in the boom phase. Lack of planning will no doubt lead to overdevelopment and a bust again in the future.

On the positive side, this area is currently growing by leaps and bounds. There is a casino measure which keeps getting bounced around. If that passes it could further add momentum on the upside.

The talking heads say there is a over supply of lower end houses and not enough at the high end.

I just did an area survey the other day near some land I was thinking about buying. Near there, there was a real nice subdivision call Pattaya Land and House. Upon further inspection the houses looked un-kept and there was a high number of houses for sale. This is symptomatic of the situation here now, the supply is so great that the ‘hot’ areas do really well, while the less desirable areas get run down and everyone wants to move.

To summarize, it depends a lot on who you talk to. Also, for my money, if you were going to be hear and be able to check in on your investment it would make a lot more sense……see also the related article about the Pattaya bubble here

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