PROPERTY RENTALS
NINA SUEBSUKCHAROEN
Barber: Japanese paying too much |
The weaker dollar has affected Bangkok's top-end rental market because 90% of expatriate housing allowances are quoted in the American currency, forcing some landlords to adjust their rates, according to Wez Barber, managing director of the new real estate agency Bangkok Finder, www.bangkokfinder.com.
The challenges are evident at this time of year when there is heavy turnover of expatriates before the new school year starts in August. Both landlords and senior executives are beginning to realise that a housing budget of $5,000 a month doesn't go as far as it used to.
On the other hand, rentals of mid-range apartments and houses have remained steady because even though there is a large supply and heavy competition, the percentage of good units is low, as most tenants prefer newer units.
Bangkok Finder, which handles only rentals, categorises the top end of the market at 100,000 baht a month and above, mid-range between 50,000 and 100,000 baht and the low end from 20,000 to 50,000 baht.
The big surprise is at the bottom, says Mr Barber, who cannot explain why these generally smaller units can command 20,000 baht or more. ''But they are better quality than they used to be, they are more hip, happening and trendy, and also the price of buying real estate is going up. What you used to be buying for 50,000 baht a square metre is now 70,000 to 80,000 baht, so to realise the return on your investment the rental yield has to go up.''
Nowadays it is difficult to rent a good studio in the downtown Sukhumvit area for around 15,000 baht a month. ''The farther you move down to Phra Khanong you can find units at 10,000 baht but landlords of cheap units, anything below 15,000 baht, don't generally like to deal with agents ... which is why, when you search the internet for property in Bangkok, it is very difficult to find anything below 30,000 baht.''
Mr Barber previously ran a home repair and renovation business that he sold to his partner in order to launch Bangkok Finder. He is optimistic that he will succeed pointing out that independents have an edge over big international companies in certain ways.
''There is good and bad in everything, there are a lot of crappy agents and there are a few good agents out there just as there are in any service industry. Usually we found that clients have come to us after being with the well-known names. Because they are much bigger organisations things take longer to happen, inquiries take longer to get dealt with. ... A smaller company is where things can happen quicker and you know the name of the boss.''
Bangkok Finder also has a unique strategy which is to focus on CEOs' wives since they are usually the ones who decide where the family is going to live. ''Executives are at work all day, it's the wives who make the final decision when it comes to housing especially when there are kids involved. ... When they are new to Thailand they need a bit of orientation but they usually end up staying nearer to the children's school than to the husband's office.''
This mindset tends to draw expats to certain areas, with Sukhumvit the perennial first choice, followed by the Silom-Sathon area.
Also becoming quite popular is the Bang Na-Srinakarin area because of several international schools including Bangkok Pattana in Soi LaSalle, St Andrews in Soi Baring and a couple of others on Srinakarin Road.
''It's very difficult to find good quality houses down there for less than 40,000 baht a month,'' said Mr Barber.
While Bangkok Finder deals mainly with westerners and some Indians, it also has Chinese clients because Mr Barber's wife Maddy speaks Mandarin. It also plans to hire a Japanese agent and offer Japanese expats better deals on apartments than they're accustomed to getting in Bangkok. ''It's very easy to figure out because you look at their websites, Japanese agents list the same properties at 20% above what the rest of us do.''
Looking back at the home renovation business he gave up, Mr Barber observed that shophouses are very interesting to renovate because one can tear down the walls separating four or five of them and turn them into a small shopping arcade or hotel. The catch is finding a good location as prices in prime sites _ up to $1 million in Yaowarat for example _ could be prohibitive.
On the other hand, one could possibly pick up a shophouse on the eastern reaches of Sukhumvit for as little as two million baht and turn it into a studio loft that could rent for 10,000 to 12,000 baht a month.
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