Just a quick q for you bar/gogo owners. Can you give me a heads up on how the key money system works and what its for?

 

Thanks

BC I can have a go.

 

Imagine it as the premium for a long term lease you might pay in the UK (maybe the same as Oz).

 

Effectively it secures your tenure for the term of the lease. On top of this you pay the monthly rent. At the end of the lease the key money is due again. If you had a 3+3 lease this is usually at a rate pre-fixed at outset.

 

Its a virtually dead entity in Bangkok these days but is still clung to in Pattaya. That said you now see more and more NEW units advertising "no key money" (higher monthly rental in lieu).

 

In the main, the reason why its still (more) rife in Pattaya is that more people are selling and they are (naturally) trying to recoup key money already paid. That plus the fact that a lot of landlords here are Thai/Chinese who have grown up with this system and are loathe to let go. I went to view some units in North Pattaya and the landlady (Thai Chinese) wanted 350,000 key money (3 years) + 10,000 a month rent. She had 12 units ALL UNLET. The guy next door had 12 units, half were let - NO keymoney but 20,000 a month rent.

 

In a nutshell if you are buying an existing business you will probably need to pay it. If you can look at one of the hundreds of "new" units you can more often than not avoid it now.

 

If you need any extra help give me a call as its a lot easier to explain verbally.

Awesome stuff Andy, thanks mate. Will drop you a line soon about this.

More info here http://www.pattaya-addicts.com/forum/Key-M...mp;hl=key+money