Passive Income RE Investment in Thailand & Great Property Manager

[Ron Richter]

Investment Info:

Single-family residence buy & hold investment in Bangkok.

Purchase price: $32,350
Cash invested: $34,000

In June 2015, I bought a brand new condo in the capital of Thailand, Sukhumvit Road area, close to the sky train station. I planned to have it as a cash flowing short term rental via Airbnb. But laws quickly changed and Airbnb became illegal in Thailand. Now, I have a long term tenant (12 months contract), and a manager taking care of everything. It's now a hands off, passive income generating rental property.

What made you interested in investing in this type of deal?

Back then, I was living in Thailand, and a friend told me about this new condominium project, that was almost finished. The price was good and he bought 3 units. As it was my first real estate investment, I bought one.

How did you finance this deal?

Financing was not available for foreigners and I had to buy in hard cash.

How did you add value to the deal?

I fully furnished the unit with a western style furniture and design. Also built in an air conditioner, which is a must in Thailand.

What was the outcome?

After renting it out, my ROI is 10,7%, the cap rate is 8%

Lessons learned? Challenges?

In hindsight, I would not buy a property full in cash again. The ROI is just too low. When financing would be available, with 20% down, I could buy 5 of such condos with the same amount of money, instead of just one.
Just to compare, with 20% down with financing, the cash on cash return would be 38%.
The appreciation is very good though, it has almost doubled in price and I will sell it next year, after holding it for 5 years.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

Very happy with my agent and manager. Without him, it wouldn't be a hands off investment. He takes care of everything, found a tenant in no time (!) and handles all communication with the tenant. If anyone already has a condominium in Bangkok, Thailand, and looking for tenants or a manager, I would highly recommend him. Send me a PM for his contact details.

[Ron Richter]

Originally posted by @Pope Lake:

@Ron Richter this is an interesting post! I like to travel, so investing abroad is one of my long term goals.

I wanted to ask, is there any currency fluctuation risk that you have to manage? This is something I always have in the back of my head, wondering how it may have played out for you.

I love traveling too. When I'm visiting a new country, I will usually contact a real estate agent and ask her to show me a few properties. It's a great way to see the area, and learning about the local market.

Yes, currency fluctuation might be a risk. But in my case it played out well. The Thai Baht currency has risen so much compared to the USD right now. That means while the rent stays the same, I get more USD. But you have to watch it, and have the right timing to buy and sell.

Most Americans I met there, are buying a condo for themselves, to have a rent free home base in Asia. One such a case study, very well documented with pictures is here: https://onestep4ward.com/buying-condo-thailand-mortgage-free-20s/

It was a top notch 2BR condominium for $90K.