In Bangkok, rental can be a bit confusing as there seems to be a lack of reliable online resources to guide landlords and tenants through the rental process. There are also no fix rules that apply, just standard practices. If your property is ready to let and this is your first time being a landlord in Bangkok, here’s 7 things you might want to take note of.
#1. Is it legal to Air BnB condos in Thailand?
The promise of high yields from short-term rentals would definitely attract any landlords. This is a grey area and it is an open secret that many landlords are doing short-term rentals. However, under the Hotel Act, you require a license in order to provide short-term accommodations. Recently, the authorities have punished a few owners in Hua Hin for contravening the act. We would urge you to err on the side of caution and not subject yourself to such unnecessary risks.
#2. Recently, there was a new Thai Rental Law enacted. Does it affect me?
The new law only applies to landlords who are classified as “business operators”.
The definition of “business operators” is as such: A business operator that leases at least five or more property units in one or more buildings for residential use. Property types include condominiums, apartments, houses and any other type of property used for residential leasing (Excluding Hotels).
So in other words, if you own less than 5 residential properties for lease in Thailand, the new changes do not apply.
#3 How long is a typical lease?
Mostly, you will see agents or landlords advertising for rental of 6 to 12 months. 12 months is a rather common arrangement. Anything lesser than 6 months, tenants would usually prefer apartments where there are concierge and room services provided.
#4 How much commission do I have to pay when engaging an agent?
In Bangkok, for 12 months lease, you as a landlord will have to pay the agent a commission equivalent to 1-month rent when the agent secures a tenant for you. This is market practice.
#5 How much security deposit do I collect?
Again, market practice is that the landlord collects 2 months equivalent of security deposit. This is to be returned to the tenant at the end of the lease. (less any chargeable damages caused by the tenant).
But if you are a landlord with more than 5 rental residential properties, the new law will dictate that you can only collect 1-month rent worth of security deposit.
#6 Should I furnish my property for ease of securing a tenant?
Generally speaking, you should. More than likely, you would have invested in a studio or 1 bedroom condo. Thus, your tenant would also most likely be a single or at best a couple. It is highly unlikely these tenants will bring along their big pieces of furniture when they relocate to Bangkok.
Dolling up your condo in Bangkok would not cost you much but it will go a long way to attracting a good tenant.
In fact, for some developers such as Sansiri, they will fully furnish the properties that they sell to foreigners.
#7 Who bears for other costs such as maintenance and utilities?
The landlord is responsible for all the applicable property taxes and maintenance payable to the condo management. The tenant will have to bear their own cost for utilities, cable, and internet.
Last words: It is advisable to engage a responsible and pro-active agent/agency to assist you with your property. Most of the time, for a fee. the agency also provides property management services.