Bangkok condominium investors can expect gross rental yields in the region of 5.3 percent – although investors should be wary of a possible oversupply situation in the popular one-bedroom sector.
Earlier this year CBRE Thailand suggested that rental rates for one-bed condos in the Thai capital may fall as a result of oversupply. They urged investors to take a close look at two- and three-bedroom units where there is more demand but less supply. Even though the investment will cost more, the potential returns and benefits could be better, the firm suggested.
Average rental yields before deductions last year stood at 5.3 percent. Deductions, such as those for fees for common area management, maintenance, insurance, agent fees, income and household taxes, could see net yields of around 4 percent.
CBRE’s researchers found the most popular units for rentals were two-bedroom examples, followed by three-bed units and then one-bedroom condos. In Bangkok, locations from Sukhumvit Soi 1 to Soi 63 were the most popular rental locations are achieved gross yields of as much as 6.1 percent.
As with any city, location and condition are big factors that influence rental decisions, but interestingly an older, well-maintained building in a good location achieves similar yields to newer examples.
The firm also found that 95 percent of rental demand for luxury condominiums in Bangkok last year came from foreigners – highlighting the need for buy-to-let investors in this sector to fully understand the expatriate sector and their property needs and requirements.
Andrew Batt, International Group Editor of PropertyGuru Group,
wrote this story. To contact him about this or other stories email andrew@propertyguru.com.sg
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