5 Tips to Reduce Vacancy Period of your Rental Property

Bangkok is the urban center of Thailand and an active economic powerhouse within South East Asia therefore it should come as no surprise that the city benefits from a healthy rental market. The capital, benefits from an established population of expats which range from working professionals, diplomats and retirees. On top of this the community is constantly being refreshed by new arrivals from communities from all over the globe!

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Bangkok’s Rental Market is competitive!

On a buy-to-let investor perspective, rental yields range from 4-6% which is relatively attractive. On top of this, when we consider other comparable regional counterparts (I.e. Hong Kong and Singapore) it is important to note that the “sales price” of properties in the Central Business District are still comparatively affordable and subject to potentially lucrative capital gains appreciation.

However hopes of profit and high returns can quickly be dashed by a local reality: Bangkok does offer potential tenants are large amount of choice and there is “rental unit competition”. At a single point in time, there is always a large supply of condos within an Area and in some cases within Condos itself. The reality of things is that unfortunately if unlucky a rental property can sit on the market for extended periods of time.

This article will explore 5 tactics to try and prevent extended “void/vacant periods” hopefully maximizing your rental returns:

1. Condo Selection

This is probably the biggest and most important factor that will determine the future profitability of a buy-to-let property. While a whole article can be dedicated to reviewing individual factors that should be considered, this tactic can be summed up as:

– Buying a Condo in the right location

In the Central Business District, the majority of potential tenants are Expats and they tend to be heavily dependent on public transport. So ideally a Condo should be in close proximity to a BTS or MRT Station. An added bonus is if the Condo is located in an area with easy or facilitated access to other modes of transport (Highway Entrances, Airport Rail Link, BRT, etc…).

Secondly based on the investor’s target market, it is important to consider and evaluate the character and attraction of an area. As certain neighborhoods appeal to certain types of residents. For example Thonglor and Ekamai appeal to Japanese expats whereas On Nut while not being glitzy is popular as a commuter hotspot for young professionals.

– Condo Specifications

Not all condos are created equal and some buildings unfortunately are not as popular as others. This can be for a multitude of factors ranging from the age, building management, developer or even general design of the condominium. Careful due diligence has to be exercised when selecting a condo especially if the buyer is considering renting the property out.

2. Unit Showcase

Once the issues of “Property Selection” are out of the way, it is important to consider the interior design and general decoration within the Unit. It is important to note, that most condos are created standard and in many cases even the furniture is provided by the developer as part of a “package”. Unfortunately under those conditions, a property can look like a mirror image of the competing Condo next door!

To give a BTL Unit the best chances of standing out, small details like a comfortable sofa and large TV should be considered. If the Unit is dated/ tired, it is important to freshen it up accordingly (I.e. Fresh paint, wallpaper, general cleanup). Unfortunately too many landlords believe that it is preferable to wait for a tenant to confirm reservation and then they can proceed to preparing their condo. This is a mistake especially in the competitive Bangkok market.

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Small Decorative pieces can make a difference!

3. Marketing

Maximizing marketing exposure is a tactic that will definitely reduce vacant periods. While this does not work in the best interest of Property Agencies (Such as Fresh), it is perfectly standard to market your Unit via multiple-agencies in Bangkok. This guarantees maximum exposure as different Agencies have various marketing strategies and networks, to ensure your Unit is rented faster.

4. Pricing

The property rental market is now a digital affair where most potential tenants start their search, trawling Property Portals and Property Agency Websites. This is an advantage as tenants can find properties faster and are more knowledgeable about the general market; however this also means “market price” of a Unit is easily accessible and public knowledge.

Gone are the days where a Landlord could overprice their unit and expect an unwary tenant to sign a lease agreement. Nowadays Tenants are shoppers and they have a rough understanding of the general market price of the Unit they are after. Therefore rather than stick a high-price, Fresh Property always advises a balanced approach of fixing a fair price (With a little room for negotiation).

5. Negotiation

In many cases expats from all over the world arrive in Bangkok with different ideas on housing standards, and in many cases requests other than price reductions are made. This can range from small requests such as providing linens to larger requests such as replacing a TV/ Washing Machine. These requests should always be up for negotiation and by keeping an open mind and navigating the rental market with flexibility a more beneficial situation can be achieved for all parties. Bangkok is a competitive rental market, which can be lucrative provided the Landlord retains a certain level of flexibility. In the city a lot can be achieved through simple comprise and negotiation. Property owners are advised not to take a “zero sum game” and/or “take it or leave it” attitude or they risk losing good potential tenants.

Bangkok provides a unique investment landscape that could offer savvy buy-to-let investors solid investment opportunities. Provided these 5 tips are considered and followed, property owners can navigate the capital’s rental market and turnover lucrative returns!

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Fresh Editorial

The Editorial Team is made up of Property Professionals with years of experience in the Bangkok Property Industry. Articles and reports are drafted using first-hand experience and local expertise!

The Team is always excited to hear from our readers via info@freshbangkok.com

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