Fun way to help kids
….Charity golf tournament promises to attract the major business players…
A top day in terms of sporting enjoyment, business networking and aid for charity is in store next month when the inaugural Movers & Shakers 2009 golf tournament is held at the Navy’s Plutaluang course near Sattahip. The event is co-sponsored by Town & Country Property, the brokers and developers; JVK, the international movers; and Real Estate Magazine. “September 25 promises to be a great day,” said Town & Country MD, Cees Cuijpers. “We’ll get the chance to enjoy a relaxing outing in the company of old friends and, hopefully, also make a few new ones.” Cees, who by his own admission is “no golfer”, had the idea of combining the event with a meeting of the Lighthouse Club charity which supports the children of construction workers. The day’s golf will be followed by the regular Lighthouse monthly meeting which is being held at the exclusive members-only Royal Varuna Yacht Club on Pratamnak. The club has its own stretch of beach. The golf prizes will be handed out at the Lighthouse function. “Any cash surplus after we have settled up with the golf course and yacht club will be donated to the Lighthouse Club,” said Cees. The format for the golf will be a Texas Scramble where all four players drive off the tee then the best shot is chosen as the start place for each player to take their second shot and so on until the hole is completed. “It’s a fun and friendly format which means that the four players are playing for each other rather than just for themselves,” said Craig Somerville, JVK’s customer relations manager. “We hope to raise a good sum from sponsorship of raffle items and technical prizes like the longest drive, closest to the hole and so on,” said John Black, MD of Pattaya Property Consultants.
John, who is a golfer, though opportunities to play are few and far between thanks to his involvement in property publications here in Pattaya, is keen to hear from companies interested in being involved in terms of sponsorship and/or entering a team. “Numbers will be limited so we can get around the course in a reasonable time. We will be treating players on a ‘first come; first served’ basis,” said John. Cost per player is only Bt 1,250 to include caddy fee and admission to the Lighthouse meeting which offers free “finger-food” and beer and wine while supplies last. The hire of golf buggies will be an optional extra. Events planned for the evening should ensure that even those unable to attend the golf should be in for a good time. Entertainment will be provided by Princess Music and a swimwear show featuring items from the extensive Phuket Mermaids collection will also be held. Sponsorships are already coming in with companies like the Nova Group and The Balcony Restaurant pledging items as prizes. All sponsors will be largely exposed during the event to receive their well-deserved media attention!
For further information you contact John Black at movers-shakers@hotmail.com or by phone on 081 894 2118.
Team-Up for Charity and join this wonderful event!
Wednesday, July 7, 2010
Town & Country Property- A force to be reckoned with
Town & Country Property: A powerful force to be aware of.
Hello Cees, thanks for agreeing to this interview for the Real Estate Magazine. Our readers find these personal glimpses into the working of the real estate agents very interesting.
Can we start with you telling me about yourself before you came to Thailand?
Of course! I come from Holland and have probably been working all my life in sales and marketing or related fields. I’m 43 years old, unmarried, and I decided when I was 35 that it was time for a chance. My working territory, so to say, was the triangle of Amsterdam, Rotterdam and The Hague. Originally I am from the Eastern part of Holland.
Reason for me to move to Thailand is because I was a little bit fed up with Holland, and, I guess, the environment in Europe. If you are an entrepreneur and would like to achieve some success or design and establish something, it’s getting tougher on you.
I don’t even mention the tax climate of ‘sunny’ Europe…
I’ve been involved in the hospitality industry and logistics for example and to help a couple of friends out I agreed to do the architecture/design for a couple of luxury sandwich bars. I remember it took over a year to get all the permits and licenses in place opening up a sandwich bar in the city of The Hague. I have been working for rather big companies in Holland and operating them, with all the rules and regulations that apply, makes it so difficult to focus on your core business. Most of your effort and attention is put into procedures and things like that, more than anything else instead of focusing on your clients or sales. Although successful, I became very bored and decided to leave Holland. When I announced to a couple of “friends” (acquaintances) that I was going to leave and start a business in Thailand they thought I was crazy. They said: “You have a nice house, a nice car, a good career and you are making quite a bit of money… you must be crazy!” Only my best mates tapped me on the shoulder and complimented me: “Finally”!
I had a friend who was staying in Manila Philippines who had a plan to open a fancy restaurant in Thailand. It was a perfect excuse to wrap up things and prepare myself to move to Thailand.
When did you come here then, and how did your plans work out?
I came here about seven years ago and the first objective was to secure a nice location for the restaurant in a good area in Bangkok. It was tough to find a good location. Everything was either already occupied or too expensive so the broker that we used suggested a property that was available here in Pattaya, a double unit on the corner of Soi Post Office and Beach Road. A former outlet of AW fast-food chain. We opened a night-spot called Samsara Lifestyle and it was pretty successful. We had many clients from Bangkok, movie stars and many trendy people knew where to find us. One of those was a company called Tricon International Restaurants who held the franchise for Pizza Hut. That was in (I think) 2000. That was why Samsara closed. We sold to them and it’s now another Pizza Hut outlet.
I decided to create my own business here in Pattaya and later on began working with an interior designer. We did many residential renovation projects and commercial projects, interiors of bars and hotels and so on. Before I considered moving on to become a building agency that was involved in design, architecture, construction and sales of properties that was probably the time when Town and Country Property came along and I decided to join.
Who founded the company?
Town & Country Property was founded by two people. They had recently opened the business when I met them. We worked well together and I became involved with Town & Country Property just one month after they opened for business. That was in 2003. All of a sudden a very small group became a much bigger group because I brought with me nine staff members so Town and Country Property was not just a broker but a broker with the facility to design and construct private residences or convert places into a commercial bar or a restaurant etc. This whole company evolved into one which dealt with all kinds of property matters. We became so successful and had so many enquiries and so much work, but at the same time we were working as developers and looking at developing our own projects, that last year, in December, we decided to end our entire individual commercial and residential projects so were stopped taking customers who wanted us to design and construct single residences, what was in effect turnkey projects.
We could then focus our attention on our own projects, which is what we still do.
What projects are you currently working on?
We have three projects at the moment. “Whispering Palms”, a luxury project of sixteen villas near the entrance to The Horseshoe Point, the equestrian centre near Mabprachan reservoir. We have The Meadows, a unique modern residential development of 64 houses being built at the top of Soi Nern Plub Wan, and Nova Residence Jomtien, a condominium being built at Soi 17 Thepprasit just behind Jomtien Park Villas. A very up-and-coming location in the heart of Jomtien. All in all we are quite active for a relatively young company. Guess we are quite blessed with a number of talented and experienced staff-members.
When you joined the company what position were you in and how did you progress to your current position?
I started heading the department architecture and turnkey contracting. Then I was a minor shareholder of the company. Over the years a fourth partner came in and later the initial two founders of the company were bought out by us, so together with my Belgian partner we operate the business on a 50 – 50 basis. I am the Managing Director who oversees the day-to-day operations and has personal involvement in all of our marketing, sales and advertising. I’m sales driven; enjoy dealing with clients and like designing art-graphics. My partner Herman, who has an extensive back-ground and experience in construction and development, is taking care of that side of the business. A great combination I would say and a very pleasant working relationship.
How big the company is and what staff do you have now?
We are a very service-oriented company; you need to have sufficient team members in place to be so. We are constantly remodeling the office space and as you can see we are now renovating the left side of the building. That will become our showroom where we will show our project-models and have a guest lounge. There are two floors above us where our designers, architects and accountants work. Our sales office accommodates a very powerful force of sales consultants and sales and marketing assistants.
We focus on quality and are service minded; we do not want to be the biggest realtor in Pattaya; simply the best!
What types of buyers are you getting and how are they buying?
There are two types of buyers and I like them both. There are those who are interested in a condo and there are those interested in a house. Two different profiles. People that are interested in a house don’t mind registering it into a company. I have only come across a very small number who would register the house into a Thai person’s name. People that buy a condo are interested in buying it in their own name. Only when the percentage allowed for purchase by a foreigner is reached they will, especially if the project is very nice, register it into a company name. We rarely see Thai people buying through an agency. They will visit a project-site by themselves, go into the sales office and make their purchase. There is plenty of opportunity for them to do so, they hardly go to an agency and say they are looking for a property. I can easily say that 95% of our customers are foreign. Many different countries but dominated by UK buyers either as end-users or investors. We have a very colorful mix of buyers, those looking for a real bargain and those looking for the utmost luxury. Even through Internet we are very successful to cater to our foreign investors. Probably 60% of all our sales are based on referrals; which, in my opinion is quite unique for such a young company.
Apart from buyers we also see a strong growth of quality tenants interested to rent a luxury home or condo. Those gain property owners an interesting return on their investments up to 10%-12% in some cases. A very healthy market.
What are your thoughts on the property market here in Pattaya?
Property in general is moving. You would think that there is an overload of affordable properties as there are so many villages being built, from starter prices at just under 1 million (Bt), but still they are moving quite fast. A new development starts and within 2 years or so it is fully completed and sold out. Now, people are moving to better quality houses at affordable prices rather than the standard style roof-to-roof-type of village developments, where the developers tries to put in as many properties as possible rather than a little more elegant and a little more spacious with better quality. For the future I would say starter-class developments will get better quality and there is a strong demand for luxury developments. Having been here for seven years I have seen what is going on and know the market from the early stages up until now. I have seen tremendous change from three or four years ago when someone with serious money in their pocket couldn’t spend it on top-quality housing because it simply wasn’t available. Individual residences perhaps, but a secure development where you had a choice of really nice properties, maybe starting at 10 million Bt or more, simply were very hard to find. If you look at the market now there are properties around for 1 million US Dollars, or even more. Even those developments seem to sell.
The type of people who visit or live in Pattaya is also changing. Many years ago the single bachelor came to Pattaya for alcohol and ‘company’, stayed at very affordable hotel accommodation or bought a condo for 1 or 2 million. It is now changing to many more families, couples and people with higher budgets spending serious money on a high quality product.
As for developments and availability in Pattaya, forget Central Pattaya. Everything is already taken; most of it is commercial property, with a few small exceptions like North-shore which is now almost finished. In the early days places like Soi Nern Plub Wan were THE residential development areas. If you go along it and look at the small Soi’s you will see smaller and bigger villages built in there. They aren’t always noticeable because if you drive along you see only shop-houses. It’s a typical technique of Thai developers. They have a land parcel fronting on to a road, they make a nice garden with a security gate on a road leading in to the village and when everything is nearly sold the garden disappears and shop-houses are being built. That is the reason Soi’s like Nern Plub Wan have many shop-houses. The developers then moved over to other Soi’s like Khow Noi, Khow Thalo. It isn’t finished yet. Developers moved to Mabprachan, though now with zoning regulations, no new housing developments are allowed there.
“East Pattaya” is still the strongest residential area of Pattaya and most likely will be so for many more years to come. It offers starters-housing projects up to exclusive projects like the luxury Siam Royal View.
There are now a few hot areas around Pattaya with lots of activity. Wong Amart (north Pattaya – Naklua) is quite hot, it has always been a favorable area for the richer Thais and the German crowd. The coastline is now dominated by commercial developments and luxury condominiums like Saranchol. We see quite a few up-market hotels going up in that area as well. Pratamnak (Buddha Hill) with a combination of low rise condominiums and luxury, nicely finished houses, is definitely one of the hottest spots in town. Over the last couple of years you didn’t see much activity but land parcels were rapidly changing hands. Since the beginning of this year more and more end-users finally got their plot of land and started to build their dream home or development. Land prices in that area are relatively expensive, approximately 25,000 Bt per talang wah. But I still see a growth around. There is also quite a bit of activity in Jomtien, with a variety of condos and houses available. Especially with all new infrastructures going in at this moment, the ‘back-drop’ of Jomtien is getting more and more popular.
Just a matter of a few more years before people will notice it.
Thank you very much Cees.
Hello Cees, thanks for agreeing to this interview for the Real Estate Magazine. Our readers find these personal glimpses into the working of the real estate agents very interesting.
Can we start with you telling me about yourself before you came to Thailand?
Of course! I come from Holland and have probably been working all my life in sales and marketing or related fields. I’m 43 years old, unmarried, and I decided when I was 35 that it was time for a chance. My working territory, so to say, was the triangle of Amsterdam, Rotterdam and The Hague. Originally I am from the Eastern part of Holland.
Reason for me to move to Thailand is because I was a little bit fed up with Holland, and, I guess, the environment in Europe. If you are an entrepreneur and would like to achieve some success or design and establish something, it’s getting tougher on you.
I don’t even mention the tax climate of ‘sunny’ Europe…
I’ve been involved in the hospitality industry and logistics for example and to help a couple of friends out I agreed to do the architecture/design for a couple of luxury sandwich bars. I remember it took over a year to get all the permits and licenses in place opening up a sandwich bar in the city of The Hague. I have been working for rather big companies in Holland and operating them, with all the rules and regulations that apply, makes it so difficult to focus on your core business. Most of your effort and attention is put into procedures and things like that, more than anything else instead of focusing on your clients or sales. Although successful, I became very bored and decided to leave Holland. When I announced to a couple of “friends” (acquaintances) that I was going to leave and start a business in Thailand they thought I was crazy. They said: “You have a nice house, a nice car, a good career and you are making quite a bit of money… you must be crazy!” Only my best mates tapped me on the shoulder and complimented me: “Finally”!
I had a friend who was staying in Manila Philippines who had a plan to open a fancy restaurant in Thailand. It was a perfect excuse to wrap up things and prepare myself to move to Thailand.
When did you come here then, and how did your plans work out?
I came here about seven years ago and the first objective was to secure a nice location for the restaurant in a good area in Bangkok. It was tough to find a good location. Everything was either already occupied or too expensive so the broker that we used suggested a property that was available here in Pattaya, a double unit on the corner of Soi Post Office and Beach Road. A former outlet of AW fast-food chain. We opened a night-spot called Samsara Lifestyle and it was pretty successful. We had many clients from Bangkok, movie stars and many trendy people knew where to find us. One of those was a company called Tricon International Restaurants who held the franchise for Pizza Hut. That was in (I think) 2000. That was why Samsara closed. We sold to them and it’s now another Pizza Hut outlet.
I decided to create my own business here in Pattaya and later on began working with an interior designer. We did many residential renovation projects and commercial projects, interiors of bars and hotels and so on. Before I considered moving on to become a building agency that was involved in design, architecture, construction and sales of properties that was probably the time when Town and Country Property came along and I decided to join.
Who founded the company?
Town & Country Property was founded by two people. They had recently opened the business when I met them. We worked well together and I became involved with Town & Country Property just one month after they opened for business. That was in 2003. All of a sudden a very small group became a much bigger group because I brought with me nine staff members so Town and Country Property was not just a broker but a broker with the facility to design and construct private residences or convert places into a commercial bar or a restaurant etc. This whole company evolved into one which dealt with all kinds of property matters. We became so successful and had so many enquiries and so much work, but at the same time we were working as developers and looking at developing our own projects, that last year, in December, we decided to end our entire individual commercial and residential projects so were stopped taking customers who wanted us to design and construct single residences, what was in effect turnkey projects.
We could then focus our attention on our own projects, which is what we still do.
What projects are you currently working on?
We have three projects at the moment. “Whispering Palms”, a luxury project of sixteen villas near the entrance to The Horseshoe Point, the equestrian centre near Mabprachan reservoir. We have The Meadows, a unique modern residential development of 64 houses being built at the top of Soi Nern Plub Wan, and Nova Residence Jomtien, a condominium being built at Soi 17 Thepprasit just behind Jomtien Park Villas. A very up-and-coming location in the heart of Jomtien. All in all we are quite active for a relatively young company. Guess we are quite blessed with a number of talented and experienced staff-members.
When you joined the company what position were you in and how did you progress to your current position?
I started heading the department architecture and turnkey contracting. Then I was a minor shareholder of the company. Over the years a fourth partner came in and later the initial two founders of the company were bought out by us, so together with my Belgian partner we operate the business on a 50 – 50 basis. I am the Managing Director who oversees the day-to-day operations and has personal involvement in all of our marketing, sales and advertising. I’m sales driven; enjoy dealing with clients and like designing art-graphics. My partner Herman, who has an extensive back-ground and experience in construction and development, is taking care of that side of the business. A great combination I would say and a very pleasant working relationship.
How big the company is and what staff do you have now?
We are a very service-oriented company; you need to have sufficient team members in place to be so. We are constantly remodeling the office space and as you can see we are now renovating the left side of the building. That will become our showroom where we will show our project-models and have a guest lounge. There are two floors above us where our designers, architects and accountants work. Our sales office accommodates a very powerful force of sales consultants and sales and marketing assistants.
We focus on quality and are service minded; we do not want to be the biggest realtor in Pattaya; simply the best!
What types of buyers are you getting and how are they buying?
There are two types of buyers and I like them both. There are those who are interested in a condo and there are those interested in a house. Two different profiles. People that are interested in a house don’t mind registering it into a company. I have only come across a very small number who would register the house into a Thai person’s name. People that buy a condo are interested in buying it in their own name. Only when the percentage allowed for purchase by a foreigner is reached they will, especially if the project is very nice, register it into a company name. We rarely see Thai people buying through an agency. They will visit a project-site by themselves, go into the sales office and make their purchase. There is plenty of opportunity for them to do so, they hardly go to an agency and say they are looking for a property. I can easily say that 95% of our customers are foreign. Many different countries but dominated by UK buyers either as end-users or investors. We have a very colorful mix of buyers, those looking for a real bargain and those looking for the utmost luxury. Even through Internet we are very successful to cater to our foreign investors. Probably 60% of all our sales are based on referrals; which, in my opinion is quite unique for such a young company.
Apart from buyers we also see a strong growth of quality tenants interested to rent a luxury home or condo. Those gain property owners an interesting return on their investments up to 10%-12% in some cases. A very healthy market.
What are your thoughts on the property market here in Pattaya?
Property in general is moving. You would think that there is an overload of affordable properties as there are so many villages being built, from starter prices at just under 1 million (Bt), but still they are moving quite fast. A new development starts and within 2 years or so it is fully completed and sold out. Now, people are moving to better quality houses at affordable prices rather than the standard style roof-to-roof-type of village developments, where the developers tries to put in as many properties as possible rather than a little more elegant and a little more spacious with better quality. For the future I would say starter-class developments will get better quality and there is a strong demand for luxury developments. Having been here for seven years I have seen what is going on and know the market from the early stages up until now. I have seen tremendous change from three or four years ago when someone with serious money in their pocket couldn’t spend it on top-quality housing because it simply wasn’t available. Individual residences perhaps, but a secure development where you had a choice of really nice properties, maybe starting at 10 million Bt or more, simply were very hard to find. If you look at the market now there are properties around for 1 million US Dollars, or even more. Even those developments seem to sell.
The type of people who visit or live in Pattaya is also changing. Many years ago the single bachelor came to Pattaya for alcohol and ‘company’, stayed at very affordable hotel accommodation or bought a condo for 1 or 2 million. It is now changing to many more families, couples and people with higher budgets spending serious money on a high quality product.
As for developments and availability in Pattaya, forget Central Pattaya. Everything is already taken; most of it is commercial property, with a few small exceptions like North-shore which is now almost finished. In the early days places like Soi Nern Plub Wan were THE residential development areas. If you go along it and look at the small Soi’s you will see smaller and bigger villages built in there. They aren’t always noticeable because if you drive along you see only shop-houses. It’s a typical technique of Thai developers. They have a land parcel fronting on to a road, they make a nice garden with a security gate on a road leading in to the village and when everything is nearly sold the garden disappears and shop-houses are being built. That is the reason Soi’s like Nern Plub Wan have many shop-houses. The developers then moved over to other Soi’s like Khow Noi, Khow Thalo. It isn’t finished yet. Developers moved to Mabprachan, though now with zoning regulations, no new housing developments are allowed there.
“East Pattaya” is still the strongest residential area of Pattaya and most likely will be so for many more years to come. It offers starters-housing projects up to exclusive projects like the luxury Siam Royal View.
There are now a few hot areas around Pattaya with lots of activity. Wong Amart (north Pattaya – Naklua) is quite hot, it has always been a favorable area for the richer Thais and the German crowd. The coastline is now dominated by commercial developments and luxury condominiums like Saranchol. We see quite a few up-market hotels going up in that area as well. Pratamnak (Buddha Hill) with a combination of low rise condominiums and luxury, nicely finished houses, is definitely one of the hottest spots in town. Over the last couple of years you didn’t see much activity but land parcels were rapidly changing hands. Since the beginning of this year more and more end-users finally got their plot of land and started to build their dream home or development. Land prices in that area are relatively expensive, approximately 25,000 Bt per talang wah. But I still see a growth around. There is also quite a bit of activity in Jomtien, with a variety of condos and houses available. Especially with all new infrastructures going in at this moment, the ‘back-drop’ of Jomtien is getting more and more popular.
Just a matter of a few more years before people will notice it.
Thank you very much Cees.
Cash Flow Investment
INTRODUCTION
Many people dream to have a life abroad and many have “made-it” to Thailand…and of course, why not?
Thailand is a beautiful place to live and work…to enjoy your own personal pace of life and many other benefits.
To be able to live your life with not too much financial worries, it is for many people, a safety-net to earn money in the local currency.
Not everyone who visits Thailand work here, thus having to rely on their earnings from abroad; savings they make from work, past incomes from work, investments or pension.
With always the fluctuating currency exchange rates, relying on your previous savings, investment or pension this is not the most reliable way to account for your private financial bookkeeping, here in the Land of Smiles.
Therefore it would be great if you could ‘generate’ a steady ‘domestic income’, or cash-flow, that does not suffer from a highly fluctuating currency market.
"KNOW-HOW's"
In SE-Asia (Thailand in particular) there is a very healthy and prosperous property-rental market.
Especially when we focus on in Pattaya; we quickly come across a few essentials of which, one of them is probably most important: the LOCATION. This is because Pattaya neighbors the biggest seaport of Thailand called Leam Chabang.
Almost worldwide, you will see a strong popularization of cities that are located in the vicinity of the country’s biggest seaport. An almost ‘automatic’ attraction for industrial estates that belong in the genre of (international) warehousing, logistics, assembling- factories etc.
Pattaya also offers an excellent infrastructure connecting Thailand’s metropolis Bangkok…
It is not a surprise that there is a strong (expat) rental market here…
As for the domestic market: a rental home is a suitable answer for those that cannot afford to buy a home and then there are of course the tourists that could be interested in a short-term rental property… (Beware that short-term lets require meticulous caring on the landlord’s part…)
With that in mind, smart moneymakers are getting a chance at a profitable business opportunity. Basically put, they simply invest on a residential property and have it rented by trusted and reliable tenants. It starts off with a clear research on the specific areas where the need for a home is at its highest.
You will find that it is very often the ‘same kind’ of property that most tenants are looking for….
CONSIDERATIONS
Trial and error is rarely the best method if you are serious about turning your investments into income. Many people waste precious time and money learning the tricks of the trade the hard way. It is therefore my advice to always use the services of an experienced real-estate agent. It is not only so that they know the market much better; but they keep nice “stock” in their portfolios including possible bargains and fire-sales; they are familiar with most residential estates including condo developments; but moreover, they are also in direct contact with potential (corporate) tenants!
Having said that, you are ultimately killing 2 birds with 1 stone!
…Did you ever consider that your broker might have properties on the books with ‘live-in’ tenants? You would purchase a property and immediately make an earning out of it!
If this could be combined with an owner’s (or developer’s) finance; you might end-up in a situation whereby your tenant is paying most of your interest, if any… Wow!
Another important consideration reflects on your personal circumstances: If you travel a lot or only reside in Thailand during holidays; you would enjoy the help of a property-manager…
What is a property manager, you ask? This person could be a family member or a friend that lives here in Thailand; a dedicated agent or simply the sales-office on-site that is looking after your property when you are not present. It sounds simple, but many people neglect to offer the ‘landlord’s service’ in case of an issue with the tenant…
So, what considerations do we have thus far?
- Always use an agent to choose the right property
- Consider a purchase with a live-in tenant
- Assign a property-manager when you are not in Thailand
EXPECTATIONS
The average ROI (rental yield) in Thailand varies between 6-8% net, which is rather high even worldwide.
If you are calculating your own return; please don’t over-project it as you will need to calculate: general maintenance, an agent’s commission, running costs when the house is not occupied, project management fee etc.
Hopefully you see a positive return that brings you some interesting monthly cash-flow…
Joyfully, this is not everything… you might have forgotten about your capital appreciation (capital gain). Property investment offers a combination of rental income and capital gains. Investing in property is not only going to give us a positive cash flow but also the potential capital gains which depend on the property price increment.
Over the last decade we have seen increases between 50-100%.
If you would add this (as a sleeping bank-account) onto your earnings, you will see that an investment in a (rental) property is really worthwhile of your precious time; this is important as, everyone knows, time is of essence.
And so is money.
EXAMPLES
There are many good properties on the market.
On the housing estate The Meadows (right on top of Soi Nern Plub Wann, near the Suttawas Temple) I have a few great samples…
Firstly this project is located on a popular location. Close to the motorway, taxi-route on walking-distance, local shops and convenient stores around the corner and so on.
Then; the project itself offers manned security, good communal facilities and last but not least: Great properties!
The Meadows is a medium-sized development (46 units) completely built. No more construction and a nice central location, quiet, private; easy access.
On The Meadows I know of a 3-bedroom City Villa with a live-in tenant who is already renting the property for more than 1 year and recently signed-up for another year.
It is a corporate client and it looks like he will live there few more years with his family.
He is paying THB 32,000 per month and the house cost THB 4.25 to purchase as a freehold property.
On the same project I also have a true executive home with private pool and 3 bedrooms. This house is available for THB 8.75 Million and generates THB 88,500 per month on rental income. The tenant is a corporate client with a 1-plus-1-plus-1 year lease on it.
Both not such bad investments…
I could continue into an endless list… That is not the point I think.
The point is: “How do I create a steady cash-flow?”… The answer: “Talk with your real-estate agent and ask for some advice and ideas…”
Many people dream to have a life abroad and many have “made-it” to Thailand…and of course, why not?
Thailand is a beautiful place to live and work…to enjoy your own personal pace of life and many other benefits.
To be able to live your life with not too much financial worries, it is for many people, a safety-net to earn money in the local currency.
Not everyone who visits Thailand work here, thus having to rely on their earnings from abroad; savings they make from work, past incomes from work, investments or pension.
With always the fluctuating currency exchange rates, relying on your previous savings, investment or pension this is not the most reliable way to account for your private financial bookkeeping, here in the Land of Smiles.
Therefore it would be great if you could ‘generate’ a steady ‘domestic income’, or cash-flow, that does not suffer from a highly fluctuating currency market.
"KNOW-HOW's"
In SE-Asia (Thailand in particular) there is a very healthy and prosperous property-rental market.
Especially when we focus on in Pattaya; we quickly come across a few essentials of which, one of them is probably most important: the LOCATION. This is because Pattaya neighbors the biggest seaport of Thailand called Leam Chabang.
Almost worldwide, you will see a strong popularization of cities that are located in the vicinity of the country’s biggest seaport. An almost ‘automatic’ attraction for industrial estates that belong in the genre of (international) warehousing, logistics, assembling- factories etc.
Pattaya also offers an excellent infrastructure connecting Thailand’s metropolis Bangkok…
It is not a surprise that there is a strong (expat) rental market here…
As for the domestic market: a rental home is a suitable answer for those that cannot afford to buy a home and then there are of course the tourists that could be interested in a short-term rental property… (Beware that short-term lets require meticulous caring on the landlord’s part…)
With that in mind, smart moneymakers are getting a chance at a profitable business opportunity. Basically put, they simply invest on a residential property and have it rented by trusted and reliable tenants. It starts off with a clear research on the specific areas where the need for a home is at its highest.
You will find that it is very often the ‘same kind’ of property that most tenants are looking for….
CONSIDERATIONS
Trial and error is rarely the best method if you are serious about turning your investments into income. Many people waste precious time and money learning the tricks of the trade the hard way. It is therefore my advice to always use the services of an experienced real-estate agent. It is not only so that they know the market much better; but they keep nice “stock” in their portfolios including possible bargains and fire-sales; they are familiar with most residential estates including condo developments; but moreover, they are also in direct contact with potential (corporate) tenants!
Having said that, you are ultimately killing 2 birds with 1 stone!
…Did you ever consider that your broker might have properties on the books with ‘live-in’ tenants? You would purchase a property and immediately make an earning out of it!
If this could be combined with an owner’s (or developer’s) finance; you might end-up in a situation whereby your tenant is paying most of your interest, if any… Wow!
Another important consideration reflects on your personal circumstances: If you travel a lot or only reside in Thailand during holidays; you would enjoy the help of a property-manager…
What is a property manager, you ask? This person could be a family member or a friend that lives here in Thailand; a dedicated agent or simply the sales-office on-site that is looking after your property when you are not present. It sounds simple, but many people neglect to offer the ‘landlord’s service’ in case of an issue with the tenant…
So, what considerations do we have thus far?
- Always use an agent to choose the right property
- Consider a purchase with a live-in tenant
- Assign a property-manager when you are not in Thailand
EXPECTATIONS
The average ROI (rental yield) in Thailand varies between 6-8% net, which is rather high even worldwide.
If you are calculating your own return; please don’t over-project it as you will need to calculate: general maintenance, an agent’s commission, running costs when the house is not occupied, project management fee etc.
Hopefully you see a positive return that brings you some interesting monthly cash-flow…
Joyfully, this is not everything… you might have forgotten about your capital appreciation (capital gain). Property investment offers a combination of rental income and capital gains. Investing in property is not only going to give us a positive cash flow but also the potential capital gains which depend on the property price increment.
Over the last decade we have seen increases between 50-100%.
If you would add this (as a sleeping bank-account) onto your earnings, you will see that an investment in a (rental) property is really worthwhile of your precious time; this is important as, everyone knows, time is of essence.
And so is money.
EXAMPLES
There are many good properties on the market.
On the housing estate The Meadows (right on top of Soi Nern Plub Wann, near the Suttawas Temple) I have a few great samples…
Firstly this project is located on a popular location. Close to the motorway, taxi-route on walking-distance, local shops and convenient stores around the corner and so on.
Then; the project itself offers manned security, good communal facilities and last but not least: Great properties!
The Meadows is a medium-sized development (46 units) completely built. No more construction and a nice central location, quiet, private; easy access.
On The Meadows I know of a 3-bedroom City Villa with a live-in tenant who is already renting the property for more than 1 year and recently signed-up for another year.
It is a corporate client and it looks like he will live there few more years with his family.
He is paying THB 32,000 per month and the house cost THB 4.25 to purchase as a freehold property.
On the same project I also have a true executive home with private pool and 3 bedrooms. This house is available for THB 8.75 Million and generates THB 88,500 per month on rental income. The tenant is a corporate client with a 1-plus-1-plus-1 year lease on it.
Both not such bad investments…
I could continue into an endless list… That is not the point I think.
The point is: “How do I create a steady cash-flow?”… The answer: “Talk with your real-estate agent and ask for some advice and ideas…”
Tuesday, July 6, 2010
#01 PATTAYA INTERNATIONAL REAL ESTATE MAGAZINE
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#01 PATTAYA INTERNATIONAL REAL ESTATE MAGAZINE
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Monday, June 28, 2010
Sawadee Krab, I am KC the Agent
Sawadee Krab, I am KC the Agent: "MD of Town & Country Property located in Pattaya, Thailand. This website is for new customers who can learn more about my daily interactions online. Through this website, you can contact us about potential investment opportunities in Pattaya, Thailand!"
Tuesday, June 22, 2010
Thai property market recovering but global downturn and political unrest has pushed prices in some areas down to 2007 levels, report shows
Thai property market showing signs of recovery
The condominium market in Thailand is showing signs of an early recovery as selective investors return to buying properties and real estate stocks, it is claimed.
All major developers are reporting stronger sales than expected after a dismal end to 2008 but lack of finance could end up hindering the tentative recovery, according to a report from publicly-listed Thai condominium developer, Raimon Land.
In the first few months of 2009 pre-sales more than doubled compared with the last quarter of 2008, signalling that the market has already bottomed out, the report says. The outlook for developers has also improved due to lower costs for materials and construction along with reasonably priced plots of land, it adds.
The Bank of Thailand has lowered interest rates four times since December 2008 and a government stimulus package that reduces the Special Business Tax from 3.3% to 0.11%, extends the reduction on transfer taxes from 2% to 0.01%, reduces mortgage registration fees and reduces tax on mortgage interest is having an effect.
Overall the report describes the outlook in Thailand as positive and remarks that off-plan sales, which had been negative, now have a high up-take at 73%. Indeed in some areas demand is leading to increased prices. In central Bangkok, for example, the average price per square meter is being driven upwards by the demand.
But the report also points out that some parts of the country are facing a more mixed market. In Pattaya the real estate market has suffered from a decrease in tourism numbers of 16% and the region is more susceptible to the global downturn and political unrest. Although Russian, British and Chinese investors are still buying.
Unlike in other parts of Thailand the end of 2008 was strong but in the first few months of 2009 off-plan sales dropped off 35.2%. As a result prices are falling. 'The gap between supply and demand is widening, which along with reduced buyer confidence induced by the slow economy and domestic political instability has pushed prices down to levels not seen since late 2007,' the report says.
'It is fair to say we see more glossy sales brochures and property billboards than actual cranes in Pattaya,' the report adds.
However, it also points out that the gap between finished supply and demand could guarantee strong annual returns and re-sale prices are rising. This trend is expected to continue as only a third of launches are expected to be completed in the next two years while the rest will not be finished until 2012 or 2013.
The report concludes that the property market could be boosted further through better access to funding and more foreign investment.
SOURCE: RAY CLANCY THAILAND - THAILAND PROPERTY NEWS
The condominium market in Thailand is showing signs of an early recovery as selective investors return to buying properties and real estate stocks, it is claimed.
All major developers are reporting stronger sales than expected after a dismal end to 2008 but lack of finance could end up hindering the tentative recovery, according to a report from publicly-listed Thai condominium developer, Raimon Land.
In the first few months of 2009 pre-sales more than doubled compared with the last quarter of 2008, signalling that the market has already bottomed out, the report says. The outlook for developers has also improved due to lower costs for materials and construction along with reasonably priced plots of land, it adds.
The Bank of Thailand has lowered interest rates four times since December 2008 and a government stimulus package that reduces the Special Business Tax from 3.3% to 0.11%, extends the reduction on transfer taxes from 2% to 0.01%, reduces mortgage registration fees and reduces tax on mortgage interest is having an effect.
Overall the report describes the outlook in Thailand as positive and remarks that off-plan sales, which had been negative, now have a high up-take at 73%. Indeed in some areas demand is leading to increased prices. In central Bangkok, for example, the average price per square meter is being driven upwards by the demand.
But the report also points out that some parts of the country are facing a more mixed market. In Pattaya the real estate market has suffered from a decrease in tourism numbers of 16% and the region is more susceptible to the global downturn and political unrest. Although Russian, British and Chinese investors are still buying.
Unlike in other parts of Thailand the end of 2008 was strong but in the first few months of 2009 off-plan sales dropped off 35.2%. As a result prices are falling. 'The gap between supply and demand is widening, which along with reduced buyer confidence induced by the slow economy and domestic political instability has pushed prices down to levels not seen since late 2007,' the report says.
'It is fair to say we see more glossy sales brochures and property billboards than actual cranes in Pattaya,' the report adds.
However, it also points out that the gap between finished supply and demand could guarantee strong annual returns and re-sale prices are rising. This trend is expected to continue as only a third of launches are expected to be completed in the next two years while the rest will not be finished until 2012 or 2013.
The report concludes that the property market could be boosted further through better access to funding and more foreign investment.
SOURCE: RAY CLANCY THAILAND - THAILAND PROPERTY NEWS
Tuesday, June 1, 2010
The Counterfeit Condo by Bart Walters
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When is a condo not a condo?
When is a condo not a condo? If you find yourself facing such a conundrum, it is highly probable you are in Thailand.
Everyone who has visited Asia has probably purchased at least one bootleg item. A fake Ralph Lauren shirt? A pirate DVD? A Rolex perhaps? And none of us are surprised when the buttons fall off the shirt, the Special Features don’t work on the movie and the watch turns your arm green. The truth is, these aren’t even copies of quality products, they’re one-dimensional cardboard cut-outs.
And so it is with condos in Thailand. For some developers, if it looks like a condo, then by God it’s a condo! I’m not sure how long the idea of condominiums has been around in Thailand, but one thing is for sure … some folks clearly don’t understand the original concept.
When I lived in the US, rarely was a condo building’s management an issue to consider. Some were naturally run more efficiently than others, but a framework of laws concerning condo ownership and management has been in place for a long time and can be strictly enforced. What’s more, US condo laws are decidedly pro-owner. Bad managers can expect little tolerance from a building full of disgruntled inhabitants.
Here in the Land of Smiles, assuming that a building’s management is okay could mean what you bought looks like a condo, but acts like a money trap. Your ability to control the destiny of that property could be hindered or stolen away altogether. If you are in-country for any length of time you’ll start to hear the horror stories.
This is one of them.
The Haunted Mansion of Ban Amphur
A few years ago a friend directed me to a distressed building south of Pattaya near the sleepy fishing hamlet of Ban Amphur. There are a handful of medium-rise condo buildings with access to the picturesque crescent shaped beach. Some of the buildings are quite nice and well maintained; others are not.
A lot of buildings I’ve been to in Pattaya look great from the curb, but soon lose their luster when you break the plane of the front door. The building we looked at was the opposite. Upon arriving, I wondered if the entire 17 stories were vacant. Not one flake of paint remained on the 8 year old tower… it appeared to be naked and shivering on the beach.
What I found inside was quite a surprise; a big functioning swimming pool, double glass elevators and a friendly staff including a gardener who showed us around. The décor was decidedly dated, and everything needed a coat of paint, but the sweet aroma of opportunity was in the air.
One of the staff showed us rooms we could rent and/or buy. What we saw was an array of units ranging from bare shell to fully fitted. Some of the balconies were bigger than my entire condo in Bangkok. One thing was constant; the view of The Gulf of Siam and Jomtien coastline were unrivalled in Pattaya. The quiet glassy bay interrupted only by the long jetty guiding the fishing boats into the seafood market is the stuff of travel posters. We made an appointment to meet the “owner” in one week.
We did some research on the building and found out it had been caught in the squeeze of the 1997 currency collapse. Expansion and development in this area was in full swing when the rug got pulled out. Of the 250+ units in the building, the original developer (“the owner”) had to eat half of them. Early investors ended up with half-finished units they couldn’t sell.
It was a mess, but still able to limp along for the last 8 years. There were a handful of rental tenants as well as some resident owners. During big holidays some Thai families came to party and eat seafood on Ban Amphur Beach. The building was barely alive, but occasionally had a pulse. A view from the balcony revealed some buildings several kilometers north that weren’t so lucky.
The “owner” turned out to be a total Dragon Lady. She is the quintessential Thai-Chinese matriarch, complete with a little “birdhouse” of hair and more Buddha statues in her office than the local temple.
She swamped us with butt-kissing compliments and genuflecting service from her staff. We even got invited to a big “family gathering”. Being Thai-Chinese herself, my assistant warned me not to be pulled into the Dragon Lady’s realm of influence.
I visited the property 5 times in all. Each time the “owner” had a new deal for me. She showed me architectural drawings of planned renovations. She showed me a bid for repaving the parking lot. She said the building would be repainted before the end of the year. She made it sound like this beat up old bunker was about to rise from the ashes.
Her most powerful sales tool however was the display of her earlier catch. The Dragon Lady took special care to point out how many other foreigners had purchased units and were now renovating them to very high standards. There was a Swiss guy living on the 15th, and Englishman re-doing a whole floor on the 10th, and a Frenchman who purchased mover 1,000 square meters to create a mansion on the roof!
I purchased a bare shell with a balcony big enough to play badminton on. At 18,000 THB per square meter it was worth it just to come and watch the sunset.
Eventually I opened my wallet and renovated the place into the coolest pad I’ve ever lived (and I’ve lived in some serious pads).
It wasn’t until I met my fellow foreign co-owners that I realized I’d just joined the “Victims of the Dragon Lady” club. Apparently that paint job had been coming for more than a few years, the pool turned green bi-weekly and several co-owners were engaged in legal battles with this condo-Svengali.
Most importantly, no general meeting of the owners had ever been called and no balance sheets posted. She owned the most units, she was the Juristic Person, she ran the board … it was her building. I had been pulled into to her web despite my assistant’s warnings.
Several attempts have been made to rally the farangs and somehow take over control of the building. The barriers are many. First of all, trying to get expats together for anything other than a free meal is like trying to herd cats. And, even though she’s sold off a unit here and there, she still has the most votes. We can’t win no matter how much we get it together.
Recently we learned that she had systematically mortgaged all her units and borrowed heavily from the bank. Now it appears the bank will take over in the next six months. We have no idea what will happen then.
I fantasize about an investing angel swooping in and turning this place into the Miami-like beachfront resort it could be. But, if the truth be told, I’d be happy just to see a paint job.
A few of us have banded together and hired a lawyer to investigate, get us a list of the other owners and try to be prepared when the power vacuum materializes.
For those of you reading this and saying, “Why don’t you go to court? Isn’t that illegal?” … forgive me for laughing out loud. The idea that a handful of foreigners are going to make any government agency impose any inconvenience on a well-connected Thai family is preposterous. When she’s done milking this cow, she will be conspicuous by her absence.
This story isn’t all downside. The other night my Swiss neighbor and I were sharing a bottle of wine at sunset and discussing the paradox of this building. We live on the edge of town in really cool seaside apartments in a deserted building like something in a movie. It’s quiet, the beach is nice, the staff is friendly … the elevator works. If suddenly a new “owner” arrived to turn the place around, we’d all be living with tile-saws and jackhammers for the next 2 years. That day is of course inevitable, so we embrace this skanky old building while it’s still kind of quaint.
So it’s a great place to live and the end of the management’s tyranny of neglect may be coming to an end soon. And, for the first time, some of the foreign ownership is showing an interest in running the place. Please forgive my optimism.
Several years ago in Phuket I saw a condo turnaround accomplished by a fractured group of foreign owners in a low-rise that was quite successful. Thailand has laws in place, but an unwillingness to enforce them and a lack of coordination by the owners can render the laws toothless. A 2008 upgrade to the Condo Act is supposed to put the bite back in the law. For yours truly, that remains to be seen.
I should point out that this example is the exception rather than the rule. Most modern buildings in Thailand have acceptable management; some are even very professional.
In Bangkok I actually shopped for condos based on the management company called The Unity Group. They managed the building I lived in and were better than anything I’d ever seen in the US. I only looked at condos in buildings under their competent umbrella.
It is important to remember, here in Thailand the responsibility of researching the management and history of a property is on the buyer. There is no MLS or handy government websites to research. It is essential to talk to other owners or investigate other buildings under management. If you get stuck with an unsellable unit in a nightmare building, it’s nobody’s fault but your own.
When foraging for counterfeit goods in the street market, it’s simple … you know they’re fake. When shopping for a condo, exposing telltale flaws may not be so easy. Take your time and make sure you get a condo, not just a cardboard cut-out.
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