Property in Thailand
Purchasing real estate from reliable developers in Thailand is just the first step. Each investor thinks about how to make the most money on their real estate: give the apartment to the management of the agency, sign an agreement with the hotel operator or take matters into their own hands so as not to share the profit with anyone. Today we will analyze all possible options, weigh the pros and cons and draw conclusions.
Rent out by yourself
Renting out apartments or villas is a full-fledged and not-easy business. If you think that you can just place an ad and everything will work out by itself, unfortunately, we have to upset you. Let’s see what you’ll be facing:
Check-in, check-out, cleaning, sudden repair or cleaning of air conditioners, solving current customer problems, such as “why my hair dryer does not work” or “we decided to check out earlier, refund us the money” – all this can take up your time for days, especially during the high season.
You can lease it yourself only in complexes where there is no single hotel management. Since everyone sets the price, there will be owners who want to increase the number of customers simply by lowering the price of rent. Others decide to lower it even more. As a result, all tenants will have to lower the price in order to stay in the market.
- Cleaning, repair and additional services
With self-management, you need to find people who will carry out cleaning and repairs. You will also need companies that rent cars and bikes, transfers, sell excursions and other additional services. From the sale of all these services, you will receive your percentage, which will increase your income.
- Hotel license
Thailand has a hotel management law. According to this law, it is impossible to rent out real estate without a hotel license, only for a month or more. Complexes with professional hotel management have a hotel license. Therefore, you will have to look for those who want to rent for a long time.
There are no real estate taxes in Thailand. But there are income taxes. Many rentiers try to avoid this process. They accept cash or card payments. There is no legal face and everything seems to be going well for the first time. But one-day problems knock on their door. We definitely recommend paying all taxes, especially since the rates are low and there is an opportunity for foreigners to legally reduce the tax burden.
The most pleasant bonus of self-renting is that you do not share your profits with anyone. If in complexes with hotel management they take 30-50% of your earnings from you, then here you take all the money for yourself, but instead, you take on all the risks.
Rent out through an agency
Under this scheme, you give your apartment or villa to the management of an agency. In fact, it acts as your trustee, who monitors your property in your absence and rents it out. It looks like this:
In this case, you shift all the hassle of advertising, finding tenants, moving in, moving out, and resolving all issues of tenants to an agency.
An agency can rent out apartments or villas in residential complexes where there is no hotel management, since in complexes with hotel management, rental by someone else is prohibited. This means that the agency will also compete with individuals who do not have legal entities, do not pay taxes, and dump prices, luring tenants with large discounts that official agencies cannot give.
- Cleaning, repair, and additional services
Typically, agencies have their own staff who deal with cleaning and minor repairs. Also, agencies provide all additional services for tourists in organized recreation.
- Hotel license
Since hotel licenses are available only in hotel-managed complexes, where owners or agencies are not allowed to rent, the agency can only manage real estate in residential complexes and rent it legally on a monthly basis. Prices for long-term rentals are always lower than for daily rentals.
As a rule, agencies pay taxes only on their activities. And the payment of taxes on the income of homeowners is their property. You can contact accounting companies that will issue you a TIN and submit annual tax returns.
Usually, agencies charge 10-20% of the rental price. This is much less than with hotel management, but the occupancy is much lower. In addition, there will be no restrictions on living in your apartment or villa.
Real estate in Thailand
Visit Thailand-Real.Estate website for real estate offers and you will be surprised!