With economic difficulty inhibiting business growth, an opportunity exists within the property industry to generate high returns on investment.
This opportunity lies in the rental segment.
Unlike condominium projects, which face a higher degree of competition, the rental business is growing increasingly popular among land owners in Sukhumvit Road and other main streets of Bangkok due to lower investment and less competition.
Jones Lang LaSalle's residential agency head Daonum Verapong said the rental business was becoming more popular among investors because it not only creates value from the assets, but also generates high profits.
"Many investors and owners of land between 200 and 400 square metres in Bangkok will build houses for rent for use by foreigners," he said.
"This kind of investment helps increase income for landowners rather than keeping the land, which otherwise devalues with time," Daonum said.
Clients in the luxury and high-end segments require a high degree of security, private zones and integrated services.
Clients, who are usually executives in large organisations, are willing to pay a rent of between Bt150,000 and Bt300,000 a month for a two-to-three-year contract for a property covering 400 to 450 square metres.
Beside houses located in business areas, Bangkok's surrounding districts - such as the Ekamai-Ram Indra Road, also known as the Beverly Hills of Bangkok - are some of the more interesting locations for the rental business.
This area is located close to the city, offers a convenient commute, is well known among foreigners and is well connected to Sukhumvit Road.
Due to these factors, the area is fast replacing Sukhumvit Road as the destination of choice for upper-class residents. Depending on the property's size, the rent can be between Bt60,000 and Bt120,000 a month.
Many properties are available for rent in the area.
Bangkok Villa, operated by City Realty and located on Ekamai-Ram Indra Road (Lat Phrao Soi 84) on 13 rai, is one such property. The project offers 30 to 40 units for a monthly rent of Bt80,000-Bt90,000 per unit. Each unit has two-to-three bedrooms, and offers facilities such as a sauna, cable television, a swimming pool, cleaning services and security.
Perfect Masterpiece on Ekamai-Ram Indra, developed by Property Perfect, offers 17 units for rent at Bt65,000 to Bt100,000 a month depending on the size of the property and duration of the contract. Jones Lang LaSalle is the sole agent for the project.
Daonum said this project targets foreign executives who are looking for single houses with a convenient commute to Sukhumvit Road .
This project, built on 97 rai, has 167 single house units, which are available either in finished form or can be built to order.
The project is valued at Bt3.49 billion and units are available for sale at prices between Bt11 million and Bt57 million. Although the project offers only 17 units for rent, owners in the project are also offering houses for rent. The rental fee can be negotiated within the Bt60,000-to-Bt70,000 range if the contract is for more than two years.
The rental market targeting foreigners is a new alternative for investors to generate high returns.
Many major property developers have turned their focus more on the rental business. Landowners, who are unaware of how to generate value from their assets, should consider the rental business for investment as it holds great potential at the moment.
Source: Nation
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1 comment:
even though this is an old post about properties in Bangkok Thailand. Until now I think rental business is still booming in Bangkok and many properties like bangkok condo for rent and houses for rent are in-demand. Property owners are still making money out of it.
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