Bangkok is undoubtedly Thailand’s dominant urban hub and a cosmopolitan global destination, as a result the Capital is a beehive of rental activity. Interestingly, there is an active rental market throughout the year comprised of both Thai and Expats renters!
Despite this, for those unfamiliar with Bangkok it will come as a surprise to find out that most Property Agencies focus their marketing activities on long-term rentals (6 months and above); offering very limited agency service options for short-term accommodation seekers!
This leaves Bangkok’s potential renters and landlords interested in short leases (Leases under 5 months), with a frustratingly limited choice of property agency service providers!
This article will aim to offer practical advice to landlords looking for short let management support!
Why do most Bangkok Property Agencies avoid providing short let services?
Some landlords may be confused by Bangkok Agents’ strange business standards!
The answer is simply dictated by the basic rule of “effort invested and commissions received”.
Most Real Estate Agencies in Bangkok are small to medium-sized enterprises (2-15 Employees) and servicing the sheer volume of short-term renters can be a physical challenge (Especially during check-in/ check-out). Also, considering Bangkok’s huge supply of rental options, completing a short let can be as challenging as closing a standard 1-year lease!
On top of this, there is a “grey area” when it comes to commission and fees to be charged for short-term rentals. The standard rental commission, “1-year lease = 1 month rent commission” makes short-term rentals a very unattractive proposition for Property Agencies.
For example, 15,000 THB Per/Month Rental:
1 Year Long Lease = 15,000 THB Commission
2 Months Short Lease (Pro Rata) = 2,500 THB Commission
This combination of high effort and low reward (Relative to long leases) makes short-term rentals an unrewarding business activity for most Agencies!
What options are available for landlords looking to short let their properties?
For landlords looking to rent their apartment short-term, an easy low-effort marketing option would be to engage a short let management company!
Here is an overview of the types of property management service providers available in Bangkok:
1.“Airbnb” or Vacation Rentals Management
These service providers, sometimes referred to as “Airbnb Management Companies”, provide a full-scope rental management service for vacation or short-term stays (1-2 Months). The scope of service of these providers include marketing, check-in/ check-out services of guests and on-going maintenance.
Rental fees and commission can vary, but as a rule of thumb many of these provider charge as follows:
- Fees of 10 – 40% of total booking.
- Usually inclusive of cleaning and minor maintenance.
- Some companies require a “Sole Agency/ Exclusivity” period.
2. Standard Property Agencies
Some Property Agencies may be open to offering short-term rental services charged at a pro rata rate on the standard agency commission (1 year lease= 1 month commission).
For example, 12,000 THB Per/Month
1 Year Long Lease = 12,000 THB Commission
2 Months Short Lease (Pro Rata) = 2,000 THB Commission
However, it is important to note that for most property agencies finding short-term renters, especially with the intensive check-in/ check-out requirements is unlikely to be a priority!
3. Property Management Agencies
Some service providers have started to offer a “hybrid model” combining short let management with standard property and tenancy management!
These service providers essentially offer a full-scope rental and management service:
- Providing marketing and advertising services, managing the property’s vacancy periods via a combination of both long and short-term rentals.
- Supporting check-in/ check-out of tenants or guests.
- Assisting with property management issues. (I.e. Property maintenance, cleaning and tenant emergencies)
The fees and commission of these property management companies can vary depending on the company. With most opting for a fixed fee combined with a “% Commission” for any signed long-term or short-term rental agreement.
Some Final Words for Landlords
In a bustling city like Bangkok, with its transient population of working professionals and travelers, short-term leases can potentially help landlords maximize returns!
Short rents can be an attractive and lucrative opportunity for the following reasons:
- Short-term rentals often command higher rental rates compared to standard 1-year leases.
- Short lets can be an easy and practical way to manage vacancy periods.
However, it is always important to remember that short-term rentals also result in significantly higher “wear and tear” on the property. Therefore, it is important to carefully manage and maintain the property on an ongoing basis!