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.
Article by Kijner & Sons International Realty, 21 February 2012