02 Dec 2019

How to invest in a condo to get
a high and sustainable rent

No investment vehicle has been more talked about than condo investments for rent because of increasing demand and growing public transport systems like the BTS and MRT at affordable prices

Public transport has helped to reduce time for commute very well and has contributed greatly to condos being one of the most talked about investment vehicles. For those interested in investing in condos, there are many factors to consider and analyze before investing in one. 

The golden rule of every condo investment is to never forget to survey the location on site. Nowadays, technology help to provide us with more information conveniently. We could find literally everything on the internet. However, real-estate investors, especially condo investors, must survey the location of the potential investment property on site. Don’t trust the information you find on the internet or from the staff’s words alone. 

Surveying the location on site allows you to determine the actual “rent” you can expect for condos in the area. You’ll, then, be able to estimate your return. Let’s say a 35-square-meter room is up for rent of 10,000 baht per month; that’s 120,000 baht per year. That means if you want a 6% rate of return, the appropriate investment price of that property should be no more than 2,000,000 baht.  

Don’t forget about the “competition” either. You should be very mindful of the vacancies in the area. If the area you’re about to invest in has a high vacancy rate, the chances of your new investment condo being vacant for a while is very likely. 

Another important thing to remember is the survey your “target tenants”. The more you understand your prospective tenants, the better you’ll be at selecting the room with the right size, furnishing, and decorations. This is what matters when it comes to raising your chances of getting a tenant. 

The last step before investing in a condo after having found a property that can generate appropriate rent, surveyed on site, analyzed our target tenants and vacancies, you’ll have to consider the “down payment”. How much should you pay and how? The higher your down payment, the less mortgage you’ll have to pay to the bank. There is an ongoing trend of the 0-baht condo investment, which is really 100% home loans with a bank. Being able to invest without having to spend your own money is great, but you’ll have to be very careful about a high monthly mortgage, which may affect your monthly liquidity. The 0-baht condo investment may not always be the best investment option for everyone. 

This is especially true if the source of the capital you’ll need for the down payment comes from a savings account that gives you less than 2% in interest per year while interest rates on your loans of about 2.5-3% per year during promotions. Consider paying a higher down payment if you can afford it as it could help you acquire a lower interest rate on your loan.