It may come as a surprise for many overseas buyers to discover that Property and Tenancy Management as a turnkey rental service, is a relatively new business concept for condo landlords in Bangkok!
The vast majority of buy-to-let investors in the Capital are overwhelmingly Thai and they often tend to shy away from Professional Property Management Services for the following reasons:
- They are often based locally and can attend to any on-going condo issues rapidly.
- They do not trust Property Management companies to deliver cost-efficient and reliable service.
- Sensitive to additional rental costs.
However foreign landlords based overseas, may often find peace of mind knowing that their investment and tenant is being assisted and monitored in a timely manner by a local team of professionals!
So what are the current available management options in Bangkok?
1. Rental Agency
While technically Property Agencies charge for a “tenant finding service only”, many will go out of their way to service the landlord and the tenant throughout the term of the Rental Agreement.
However, it is important to note, that their support is limited to relaying issues to the concerned parties and advising on any potential solutions.
Scope of services:
– Relaying maintenance or tenancy issues to the Landlord.
– Advising and providing suggestions to the Tenant or Landlord on how to resolve issues.
– Providing basic check-in and check-out support.
2. Condo Facilities Management
All Condominiums tend to have a Facilities Management or Juristic Person Office. They are usually here to offer general property support to the condo’s landlords; with some large condos conveniently staffed with repairmen and technicians.
Scope of services:
– Can conduct basic maintenance works (I.e. Repair broken fittings).
– They can usually assist with all condo fixtures or fittings; however their service does not cover standalone furniture or electrical appliances (I.e. Fridges, Microwaves, TVs, etc…).
3. Professional Property & Tenancy Management Agency
Simply relying on the Rental Agency and Facilities Management, generally offers basic cover that is ideal for landlords that are based locally or have access to local assistance (I.e. Friends, family or contacts).
However there are additional issues beyond the scope of “Option 1 and 2” that may create undue stress and complications, especially if a landlord is based overseas. So for additional peace of mind, some landlords may opt for a Professional Property Management Agency.
They offer the full scope of rental and tenancy management services notably:
– Full tenant management such as rent collection and on-going support.
– Assisting in coordinating repairmen, contractors or technicians in case of maintenance issues.
– Assisting with furnishing, decoration and refurbishments works.
– Coordinating repair and/or replacement of electrical appliances and furniture.
– Complete check-in and check-out services.
Bangkok Property Management Fees & Costs?
Property and Tenancy Management is a relatively new industry for Bangkok, therefore there is currently no established standard in regards to service fees.
The few Agencies that provide this service will generally charge landlords using various fee structures. Service rates are usually charged using the following formats:
Some Property and Tenancy Management Companies will charge a fixed fee based on the property size per square meter.
500 THB Per Square Meters
Condo size 30 sqm
500 THB x 30= 1,500 THB Per/Month (15,000 Per/ Annum) Management Fee
This fee only includes property management and landlord support. Management companies need to be reimbursed for any extra expenses such as purchase of appliances or provision of cleaning services.
Extra services are usually charged at cost plus a minimal service charge to cover transport expenses and/or management time.
Percentage of Rental Income
Another common fee structure is the management services calculated as a percentage (%) of the monthly rent.
Management Fee @ 15%.
Rental 10,000 THB Per/Month
1,500 THB Per/Month (18,000 THB Per/Annum) Management Fee
This percentage varies between Bangkok service providers and usually ranges between 10-20% of the rental income. This fee includes property management and landlord support; however it excludes any additional expenses.
In many cases, Agencies will offer fee structures that combine a fixed management fee and a percentage of rental income. The management fees above, do not include the “tenant finding fees” charged at the standard rate of “1 month rent for a 1-year lease”.
Different property and tenancy management companies will offer various levels of management, maintenance and support. It is therefore important for landlords to carefully review the scope of services offered on a company-by-company basis!
Engage a Property Management Company or Self- Manage?
This decision ultimately comes down to the landlord’s priorities and personal preferences. One solution maximizes rental yield returns and the other minimizes the “effort & time” of ongoing condo management!
Benefits of Self-Management
Landlords that self-manage their property can maximize their rental yields in the short/ medium-term. This is usually the primary factor that encourages most landlords to manage all aspects of property maintenance and tenant management.
Benefits of Property & Tenancy Management
Landlords that are based far from Bangkok or that reside overseas, usually benefit the most from this solution. Engaging a management company, allows the landlord to delegate the hassle of day-to-day management to professionals.
The second major advantage is usually the maintenance and asset preservation benefits of hiring a management company. Tenancies can cause a large amount of “wear and tear” to a condo’s interiors and continually maintaining a property is an important part of maintaining it’s ongoing rental and future resale value.
Some Final Words!
Whether you decide to self-manage or engage a company, ultimately the key to a successful rental portfolio is efficient and cost-effective rental, tenancy and property supervision. Owning a rental property can be extremely profitable, provided a healthy turnover of tenants is maintained and the property’s condition is carefully managed!
At Fresh Property our dedicated property management team can help protect and grow your investment!