The other day I had a call from a rather worried owner of a lovely property in a great central location about why her property hadn't been rented out for more than 12 months. These are some of the tips I suggested:
I mentioned that the key ingredients for a tenant are not the same as those for a landlord. The tenant is more inclined to take at the interior of the unit, the size, and of cause the asking amount.
For the rent in Bangkok, common annual rental returns for a condominium unit normally fall within 6-7% of the value of the unit. After allowing for common are maintenance fees, agent fees and repair costs, you may be looking at nearer 5% or 6% per annum as a net figure. However, just because you've paid 18 million baht for your 150 square metre condominium unit doesn't automatically mean that you can charge 100,000 baht per month for it. A prospective tenant may feel better staying in a serviced apartment building with all the extras for a similar price. The above percentage figures can be used as a guideline, but some landlords are asking over 1,000 baht per square meter per month. Just because you know of someone who rented out their 40 square metre condo unit for 40,000 baht per month doesn't mean that you will. Most prospective tenants look around before they sign and have a good idea of the going rate.
The location is, of course, also important for rental rates. Ekamai BTS station may be 2.04 km from Phrom Phong BTS station and it may take three minutes and 25 seconds to get from one to the other, but for many tenants Ekamai is out in the sticks. If you know the area, then you may disagree. Given that the location, or even prospective tenants' perception of the location, can greatly influence rental amounts, there is nothing wrong with seeking advice from an estate agent with experience, even if they do tell you to drop the asking rent by 20%.
Probably the most highly erroneous area for landlords in Bangkok is the interior decoration of the unit. Most prospective tenants do not favour old formica-fitted wardrobes Surrey, fitted dressing tables, fitted beds and fitted TV cabinets. Not that there's anything wrong with fitted furniture, it's just that when the furniture has been ravaged by 10 years of tenants who as it's not their furniture, don't mind leaving a few scratches, it tends to look pretty ghastly. Smelly old carpets also don't go down that well.
If you own a condominium unit and wondered why you haven't had a tenant for 12 months, maybe this could be the reason. If you needed to spend 360,000 baht on a make-over, and had missed out on 12 months of rent at 30,000 baht per month, then you would have made your money back by now. Not only that, you would have an attractive unit that would do you for a few years more.
A nice renovation would also increase the sales value of your property. You may need to give your property a makeover every three to five years. A good estate agent should be able to advise.
Generally, most tenants want fully-furnished units. You may be kidding yourself by keeping your unit unfurnished, thinking that you might get at tenant who doesn't want furniture, and save yourself some money. If your rent is 60,000 baht per month that means that every week the unit is empty you loose 15,000 baht of rent. You could buy a nice piece of furniture for that. In any case, a non-furnished unit will not look anywhere near as appealing to a prospective tenant as a furnished unit, even if they have their own furniture. Sometimes it's difficult to use your imagination in an unfurnished unit to determine what furniture should go where.
As for unit preparation, smaller touches make a big difference. A plain mattress does not look as nice as a bed with nice duvet and pillows. Even if you don't offer the unit with the duvet and pillows, they don't cost much and these little touches can make all the difference.
Get some nice warm lighting. A few modern stand-alone lamps look much nicer than a daylight fluorescent tube. Make sure that the lights and air conditioning are all turned on for when the prospective tenant walk in.
Some landlords even lay the dining table with cutlery and crockery. Why not? I would bet that these landlords are more successful at finding tenants than the smelly-carpet landlord.