Is Pattaya a good buy to let investment?

[Ezboz]

I understand this is a very open ended question, Im looking for some advice from fellow PA members about the following 

Is buy to let a good investment in pattaya 

What would be the average return on investment ? 

Long term let vs airbnb ?

Are any PA members currently doing this ?

I know the rental prices are down at the moment due to no tourists coming however so are property prices could this represent a buying opportunity 

The uk average return is arround 8% per year not taking into account tax and upkeep costs is it possible to match or even beat this 

First post please be kind 🙏 

[shagwell]

In my experience with condos not really. When I purchased my first condo over 10 years ago I was getting a gross income of around 10% per annum on my purchase price and it was rented out 95% of the year to holiday makers which sounds good. I later switched to a long term tenant taking slightly less rent but a guaranteed rental income every month.

Here's the kickers though...unless you are here actively managing the rentals yourself (I wasn't at the time) you will have to pay an agent some of that for collecting your rent and generally managing the rental in case of problems etc (which there will be). You will also still be responsible for paying the monthly condo maintenance fees. I also had to pay for a renovation 5 years into my ownership, some of that was much needed anyway but some was down to 'fair' wear and tear on furniture etc. 

The major downside though is that in the last 10 years my first condo has if anything gone down in value. Pre-covid I might have been able to get my initial capital back but probably not as their are so many condos on the market, they can also take a very long time to sell. In the same time UK property prices have pretty much doubled. My long term tenant moved out several years ago and since that time finding tenants has not been as easy as in the past, that's despite reducing the rent to below what I used to ask and get 10 years ago.

I initially bought the condo as my retirement home and the plan was just to rent it out until that time, but if I was to do it again (as an investment rather than a retirement home) I would buy in the UK not Thailand. Yes your initial rental returns might be higher than on a UK property but with a UK property you will get more capital appreciation and a pretty much guaranteed annual rental increase.

Note also that airbnb is illegal in Thailand (though I am sure some do it and get away with it), you also cannot rent out for periods of less than one month (so in theory you cannot rent out to a tourist who only wants the property for 1 or 2 weeks).

[Stillearly]

Also FX risk to consider , for both your capital outlay and rental income ..where will GBPTHB be in ten years  ....if you have the money buy a property in your home county , much safer investment imho 

[McGinty]

I second that buy at home in your local area, where you know the market and can keep a good eye on your investment.

Having local knowledge and patience often translates into higher returns.

 

[mariod.au]

As many learned during COVID having property in a foreign country doesn’t necessarily guarantee you access to it. Hell, the junta could decide one day to nullify/clawback all foreign held deeds and there isn’t jackshit you could do about it. As others have said/will say just invest in your home country where you likely have much better appreciation AND legal rights regarding property ownership, access, etc.

[jetdoc]

7 hours ago, Ezboz said:

What would be the average return on investment ? 

Generally rental prices asked reflect a 12-14 year ROI

7 hours ago, Ezboz said:

Long term let vs airbnb ?

I like long term, but at the Base folks doing airbnb were making a killing before covid.

7 hours ago, Ezboz said:

Are any PA members currently doing this ?

At the moment no, but wife and I are considering buying another condo in Pattaya and will decide what to do with condo at the Base. 

I like owning as opposed to renting so if no wife and I bought when retired at this point it could be considered an investment (as way past 12-14 year) instead of a choice. In short would not invest in property here unless having a wife/GF/Thai person to give it to.

[Greg_B]

My old landlord bought his place in 2015 for 2.1 Million Baht

He sold that place for 1.4 Million Baht in 2021.

Now he rents it from the person he sold it to.

[Billy Shears]

Put all your money in the S&P 500 and just relax, no headaches.

The S&P 500 gained value in 40 of the past 50 years, generating an average annualized return of 10.9% despite the fact that only a handful of years actually came within a few percentage points of the actual average.

https://www.fool.com/investing/how-to-invest/stocks/average-stock-market-return/

[Ezboz]

Sounds like this is a non runner for me taking into account capital appreciation and the extreme market swings in pattaya Im better acquiring more buy to let property in the uk then renting in the LOS this would allow me to bailout should visa exchange rates ect become a issue in the future 

The only positive I can see that owning a condo in pattaya is not having to factor in rent in my cost of living in pattaya giving me a greater amount of protection from exchange rates and inflation in the future 

Pros and cons as always 

[Bartle]

There are too many imponderables. What is going to happen due to the huge debts that countries like the UK built up paying people to stay off work for a year and a half? What is going to happen to Thailand, which doesn't have good people managing the country?

Will international tourism ever go back to the level it was at? There was already a glut of supply of 1 bed Pattaya condos.

I would look at places that didn't lose that much value. Perhaps look at Phuket, Koh Chang, and other nice holiday places and see if housing hasn't dropped as much. A situation like this tells you which are the quality long term investments - if anything will be a good investment after Covid.

And get a bit of bitcoin at least.

[ShaneFalco]

Buy a number of bars in Pattaya instead 

[Ezboz]

Im just of the option that pattaya will get back to the pre covid level of tourism for one simple reason what pattaya is famous for sells always has always will but i do agree with Bartle There are too many imponderables 

[Pinoydave]

You have to worry about the long term political situation in Thailand……. Countries do change….. Egypt had been open to tourists for decades, then they bombed a plane, government changed and foreigners haven’t seen their holiday homes for over 5 years and they remain virtually worthless ……… it could easily happen in Thailand 

[sl4ppy]

17 hours ago, Ezboz said:

Im just of the option that pattaya will get back to the pre covid level of tourism for one simple reason what pattaya is famous for sells always has always will but i do agree with Bartle There are too many imponderables 

Even pre-Covid the economics of owning a condo in Pattaya were suspect, don't expect that to change too much.   Of course if you're living there (in the condo) that's a very different scenario with a different set of considerations.

[cleptomane]

If you do not know the market very well, stay away from it. Trust me. I only buy in my city where I know every regulation, upcoming project and future developments.

[pickingberries]

I would stick to general rule - you're making money in your home country and spend them in Thailand. Or you get burned.

Making it work would probably require to manage properties yourself, having multiple properties...basically having it set up as a business. That is scalable and is based on having XX properties. Trying to do it with single condo will be just a pain.

[cleptomane]

11 hours ago, pickingberries said:

I would stick to general rule - you're making money in your home country and spend them in Thailand. Or you get burned.

Making it work would probably require to manage properties yourself, having multiple properties...basically having it set up as a business. That is scalable and is based on having XX properties. Trying to do it with single condo will be just a pain.

Totally agree and right now realestate prices are so inflated. With the downturn they will go down as stocks have already done. For sure not good to start such a a business

[Louis1975]

On 19/10/2021 at 00:12, ShaneFalco said:

Buy a number of bars in Pattaya instead 

I was investing in a bar and a restaurant in Tree town in the end of 2021. But the business was not really good and finally my Thai partner tries to cheat me. I learned that Investing in the bar business is not at all a good idea. High risks of cheating in many ways. Not a good idea

[evaldo]

Would say the rental Pct is about 7 percent.  Its okay but same as investing stocks....and the last you can sell within minutes. Its a hazzle renting out - and there will be problems...Further more prices at the moment in Pattaya is not rising and so much being built...Who knows about future if millions of chinese comes...I have had renting property here and this is just my experience....Also fees selling and buying. Some wants aircon, Wifi - others not. i talk about renting out Monthly and longer. Maybe other story if doing daily...but for living and if stay less than 6-7 months - rent