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The Difference Between Apartment and Condo in Thailand

by Kijner & Sons International Realty

As long time international brokers and real estate professionals, local industry jargon is rarely an obstacle, but for many investors and future clients, some terminology can remain confusing especially in a country such as Thailand and a city like Bangkok. The demand for Bangkok’s Business Central District (BCD) housing remains very strong with limited supply of quality, renovated and well-priced properties.

The preferences of foreign expatriates, young domestic business professionals and their families are centered around 3 main offerings: apartments, condominiums and town-houses. Very often, most tenants in Thailand don’t understand the simple difference between apartments and condominiums. The mysterious answer resides in the ownership of the unit by one individual for apartments and by multiple and individual owners for condominiums. This can make a notable difference especially when dealing with a query or an issue.  The point of communication will be central and unique for apartments whereas for condominiums a mixture of Juristic Office staff - managing the common areas and services of the building - and the owner of the particular unit will take place. The time response and efficiency in the handling of any issues such as an A/C or washing machine being out-of-service can make a positive or negative lasting impression on a tenant and will certainly motivate his or her choice for future extension in the long run.

Ideally, a landlord wants to secure a tenant for as long as possible by providing the best service possible. In reality, this doesn’t necessarily happen and often tenants leave their units to the great demise of their landlord at the end of the lease without having given the chance for the owners to address some issues for which they are not necessarily aware of or have not been contacted for. This situation alone makes apartments more desirable on a tenant point-of-view as they are often kept in a more recent or updated condition, the communication channel between tenants and landlord is more direct and efficient and all issues handling is centralized.

 


 

 

 

 

 

 

 

 

 

 

 

 

But rest assured, some advantages of condominiums are notable such as a less standardized decoration, more flexibility in allowing your friendly domesticated companions to live in the premises (cats, dogs, turtles and other adorable creatures) and more room for price’s negotiation as renting price in the building is not set by one owner. From an investment point-of-view and if your budget allows owning standardized units, centralized management can create interesting economies of scale and increase your ROI while safeguarding your capital, helping you reach the long-term goal of capital appreciation. For a more controlled budget, condominiums can be great opportunities to generate monthly cash flows and secure your savings into a long-term asset. Foreigners can benefit from full ownership in projects that are respecting the 51-49% ratio rule between Thai national and foreign owners.

Dr. Sopon Pornchockchai, President of the Agency for Real Estate Affairs (AREA), develops in his 2011 Land Survey Valuation Report, that although there are limited amount of apartments’ development in the pipeline, some 300 projects are ready to be launched in the next 4 to 5 years in Bangkok’s BCD; hence offering more choices and ultimately, more value to both domestic and foreign users. This ensures the attractiveness for Bangkok’s property investment from both domestic investors and foreigners who want to diversify their portfolio.

KSI Realty Thailand predicts that the fast development trend of the last 5 years of high rises will slow down in favor of more harmonized and community-oriented low rises or town-home sub-divisions. Although land prices remain strong and have increased more than 3 times in the last 15 years, some developers will follow the trend of building more quality than quantity-oriented housing and offer ultimately more luxurious, city and eco-friendly-oriented lifestyle to their customers. For more info on Real Estate news in Thailand please visit our Blog www.Kijner.com/blog, like our Facebook Page www.facebook.com/ksirealty and follow us on Twitter www.twitter.com/ksirealty.  

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Article by Kijner & Sons International Realty, 21 February 2012

10 Questions to Ask the Condo Board

by Kijner & Sons International Realty

Before you buy a property in Miami or Sarasota Florida, Kijner & Sons International Realty advises to contact the condo board with the following questions. In the process, you’ll learn how responsive — and organized — its members are. You’ll also be alerted to potential problems with the property.

1. What percentage of units is owner-occupied? What percentage is tenant-occupied? Generally, the higher the percentage of owner-occupied units, the more marketable the units will be at resale.

2. What covenants, bylaws, and restrictions govern the property? What grandfather clauses are in place? You may find, for instance, that those who buy a property after a certain date can’t rent out their units, but buyers who bought earlier can. Ask for a copy of the bylaws to determine if you can live within them. And have an attorney review property docs, including the master deed, for you.

3. How much does the association keep in reserve? Plus, find out how that money is being invested.

4. Are association assessments keeping pace with the annual rate of inflation? Smart boards raise assessments a certain percentage each year to build reserves to fund future repairs. To determine if the assessment is reasonable, compare the rate to others in the area.

5. What does and doesn’t the assessment cover? Does the assessment include common-area maintenance, recreational facilities, trash collection, and snow removal?

6. What special assessments have been mandated in the past five years? How much was each owner responsible for? Some special assessments are unavoidable. But repeated, expensive assessments could be a red flag about the condition of the building or the board’s fiscal policy.

7. How much turnover occurs in the building? This will tell you if residents are generally happy with the building. According to research by the NATIONAL ASSOCIATION OF REALTORS®, owners of condos in two-to-four unit buildings stay for a median of five years, and owners of condos in a building with five or more units stay for a median of four years.

8. Is the condo building in litigation? This is never a good sign. If the builders or home owners are involved in a lawsuit, reserves can be depleted quickly.

9. Is the developer reputable? Find out what other projects the developer has built and visit one if you can. Ask residents about their perceptions. Request an engineer’s report for developments that have been reconverted from other uses to determine what shape the building is in. If the roof, windows, and bricks aren’t in good repair, they become your problem once you buy.

10. Are multiple associations involved in the property? In very large developments, umbrella associations, as well as the smaller association into which you’re buying, may require separate assessments.

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Source: The National Association of Realtors® (NAR)

Kijner & Sons International Realty is pleased to share with you the latest Re/Max Platinum Realty 2010 Fourth Quarter Sarasota and Beyond Real Estate Market Report based on joint data from the Sarasota Association of Realtors® (SAR) and My Florida Regional MLS.

To download the full report, click here.

For more information on the Sarasota Florida Real Estate Market, contact us at info@kijner.com

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