3 working points to generate money on renting out Thai properties: a detailed overview
Renting out real estate in Thailand is a common way of earning money. This is a pretty profitable way to generate money flow. Every investor thinks about how to make as much money as possible on his real estate in Thailand: give an apartment to an agency, sign a contract with a hotel operator, or do it himself without anyone’s help not to share your profits. Nevertheless, there are a few basic rules and subtle nuances that every investor should be aware of.
There are 3 working ways to generate money on renting out Thai properties. Do you want to know how it is most beneficial for yourself to rent out your apartments in this tropical country, while earning good money? Let’s analyse all possible options, weigh the pros and cons and draw conclusions.
How to make money on real estate in Thailand
If you are thinking about how to make more money on renting out Thai properties, you have 3 ways, as mentioned above:
- rent out your home in Thailand on your own,
- give your apartment to an agency,
- sign a contract with a hotel operator.
Let’s have a closer look at each of these points to learn more.
Renting out real estate on your own
Renting out apartments or villas in Thailand is not an easy business, as it seems at first glance. What will you have to face:
- Time
Settling and evicting tenants, cleaning, sudden repair of rooms, solving clients’ problems, etc. – all this can take up your time, especially in high season in the Kingdom.
- Pricing
You can rent out your residence on your own only in residential complexes and communities where there is no hotel management. As everyone sets the price themselves, there will be owners who will want to increase the number of customers by reducing the rent.
- Cleaning, repairs and additional services
You need to find people who will clean and renovate your apartment.
- Hotel license
In Thailand, it is impossible to rent a daily property without a hotel license. You can this only for one month or more. So, you will have to look for long-term tenants.
- Taxes
There are no real estate taxes in the country. However, there are income taxes.
- Profit
The most pleasant bonus of self-rental is that you do not share your profits with anyone. However, complexes with separate management can take 30-50% of your earnings.
Renting housing out through a real estate agency
Let’s look at the specifics of how the system works with real estate agencies and companies. If you give your apartment or villa to a real estate company, it acts as your proxy.
- Time
In this case, you pass on all the troubles of advertising, finding tenants, settling in, evicting and resolving all tenants’ issues to the agency.
- Pricing
A company can rent out apartments or villas in Thai communities where there is no hotel management, because renting out properties is prohibited in residential complexes with hotel management.
- Cleaning, repairs and additional services
Agencies have their own employees who are charge of cleaning and repairs.
- Hotel license
As you know, hotel licenses are available only in complexes with hotel management, where owners or real estate agencies cannot engage in leasing, the agency can only manage properties in residential complexes and rent it out legally monthly.
- Taxes
Real estate agencies in the Kingdom pay taxes only for their activities.
- Profit
As a rule, agencies charge 10-20% of the rental price.
Renting out Thai real estate through a hotel operator
Let’s focus on the theses of the work of a hotel operator when renting out properties in the Kingdom. It takes over the apartment complex and pays the owners an annual income of 7-10% per annum.
- Time
The hotel will take care of all your work. You participate only in profit sharing and can come to rest in your apartment every year.
- Pricing
There is no internal dumping in the hotel management, as one operator rents out all residences in the complex.
- Cleaning, repairs and additional services
As a rule, the hotel staff is engaged in cleaning and maintaining properties.
- Hotel license
Complexes with professional hotel management have a hotel license. This license gives the right to daily rental, and the daily prices are the highest, as a rule.
- Taxes
If your apartment complex is managed by a hotel, it acts as a tax agent and pays taxes for you. You get a net profit.
- Profit
It may seem that the hotel takes a significant part of the profit. Yes, it does. However, the profit is much larger in this case.
Summing up
Now let’s make a conclusion and focus on the main thing:
- If you decide to rent your home out on your own, this method can bring a good income with the right approach, knowledge of all the nuances of this business and constant monitoring of it.
- Renting out your residence through a real estate company is ideal for those who use their home for personal living and want to earn income when they leave their homes temporarily paying off maintenance costs.
- Renting through a hotel network is perfect for those who want to earn a stable income without wasting their time and energy.
What is the best way to buy a property in Thailand?
As you can see, it is not difficult to buy a property in the Kingdom on your own. However, to purchase a residence and not regret it, you will need the help of professionals with extensive experience. Visit Thailand-Real.Estate to find out more than you expect – lots of hot offers from trustworthy construction companies and agencies, a rich choice of properties in the best communities with advanced infrastructure and state-of-the-art amenities, unbeatable prices, real estate viewing personally and remotely, detailed information and photos, managers’ care support, the most favourable terms for customers, safe and sound deals and much more. Be confident that your future home with Thailand-Real.Estate is in good hands.