5 Steps To Find Rental Clients for Your Property
Before finding rental clients for your property, consider if leasing it is the right choice for your situation in the first place. If you purchased the property 1st hand from a developer and your main goal is to sell it in the near future, you may be better off leaving it empty to maintain its status as “new.” This increases its value whereas a used apartment will usually be worth less.
If you’ve decided leasing is the right approach, understanding your potential clients is the most crucial step to attracting them. The homeowner should be as thorough as possible at this stage of their real estate business venture as it can often determine success or failure.
To maximize profits, the lessor must consider the pros and cons of their property’s location. From there, they can start to consider what type of lessee they want to attract and the best ways to entice them via design and marketing.
1. Understand the Level of Demand in the Property Market
Understanding the level of demand in a specific property market can help you decide how much to charge and what type of renters to try to attract. The presence of mass transportation hubs, green spaces, business centers, and entertainment options like restaurants, bars, and shopping malls are all factors that impact this demand.
Nearby facilities may also attract specific categories of people. For example, if your property is in a neighborhood with great schools and universities, targeting families or students might make sense. The presence of nearby private hospitals may mean that catering to elderly tenants is a good idea.
To get a better idea of the demand in a property market sentiment, compare real estate prices on our site. Seeing the designs and prices of different rental units in your desired area can help you gauge what rent to charge and what type of lessee to market to.
Landlords should try to have an open mind when it comes to demand and adjust their expectations based on the overall market. Oftentimes lessors end up with an empty property, losing out on rental income because they’re unwilling to be flexible and accommodate the market. Comparing prices can inform this and help maximize your investment.
2. Decide Whether to Target Short or Long Term Renters
Deciding whether to target short or long-term renters often comes down to a question of how time-consuming you want your property business to be. You can charge short-term renters a higher nightly rate, but this comes with an expectation of more services like check-in and check-out, housekeeping, chauffeuring, and catering.
Along with extra services, you’ll have to bear other costs like utility bills and additional marketing to keep the room consistently occupied.
On the other hand, long-term renters typically require less maintenance with a lower fee on a per-night basis. This may be a desirable option for homeowners wanting a stable source of passive income with the main goal being to sell the property at some point for a return on their initial investment.
In Thailand, a long-term lease is usually considered to be 1 year or longer while short-term leases can be on a half-year or monthly basis. There are also nightly rentals in some cases.
Is Short-Term Renting Legal in Thailand?
Short-term renting is legal in some cases in Thailand, though rental periods under 30 days are restricted to properties with hotel licensing. Various pieces of Thai legislation place strict limitations on what operations are allowed. For example, the 2008 Condominium Act makes it illegal to conduct commercial activities in spaces not designated for such activities.
The 2004 Hotel Act makes short-term renting hard, too. Airbnb-style rentals of less than 30 days are illegal in Thailand unless the property is registered as a hotel according to the act. Some hosts have argued against this, but a 2018 a court ruling in Hua Hin set a precedent, fining two hosts who were seen to have violated the hotel act.
3. Prepare the Property for Renters
Landlords must thoroughly prepare the property for renters for their satisfaction and protection. This should involve an inspection of the property for defects, faulty installments, and safety concerns.
Some things to ensure during property preparations include:
- Water installments like toilets, sink faucets, and showers don’t leak.
- The shower water heater works well.
- Electrical outlets supply electricity and lights work.
- Any provided appliances such as stove, stove hood, washer, and dryer work properly.
- There are no obvious flaws with the apartment construction in areas like the flooring, walls, doors, windows, and countertops.
Finally, the property should be deep cleaned and the AC should be serviced before any tenant moves in.
Responsibility, Liability, and Insurance
Responsibility, liability, and insurance are three crucial factors that lessors must take seriously when receiving lessees in Thailand. In the case of properties registered to limited companies, an owners’ liability is limited to the value of the shares they’ve contributed to the company. Independent property owners technically have unlimited liability.
Occupier’s liability applies, meaning that the owner of the property bears some responsibility for the safety of their tenants. Potential claims could come from dangerous materials used during construction, structural issues, and problems with room appliances.
Property owners must enter into insurance policies according to Thai property law. This may include liability, theft, fire, and even workman’s compensation insurance if you have employees.
One way for lessors to protect themselves from unjustified claims is to take both videos and pictures and review with the lessee along with the rental agreement.
4. Design Your Property
The design of your property will influence the type of rental clients you can hope to attract. If your unit only has one bedroom with an en suite Jacuzzi, it may be better suited to a bachelor. If there’s a master bedroom and multiple smaller rooms with child-proofing, you might be better off targeting families.
Using space efficiently and installing home décor that creates a beautiful aesthetic is another crucial aspect to the design phase. Some ideas that could energize your property include:
- Placing a large mirror on a wall, preferably opposite a window. This can create a more spacious feeling in the room and has the added benefit of bringing in more natural light.
- Clearly defining multi-purpose areas by strategically placing furniture and rugs.
- Creating an impression of spaciousness with light-colored wall paint or wallpaper.
It’s also a good idea to consider durable furniture that’s easy to clean. This can be considered an investment for the future as there may be many different tenants in the property over the years and the furniture will see a lot of use.
5. Market Your Rental Property
Marketing your rental property well can increase the amount of interest in your property. This gives you a wider net of potential quality occupants to choose from.
Marketing begins with taking high quality photos of the property. The goal of these images is to give potential renters an idea of the quality of the rooms, making it look as appealing as possible.
If you’re handling everything on your own, you can host these images on a website of your own and launch a marketing campaign to gain traffic to that site. This may involve Search Engine Optimization (SEO) tactics like website formatting and blogging. It can also include Google ads.
You’ll also need to manage other customer-facing necessities like answering inquiries, screening potential tenants, and organizing a booking calendar.
Hiring A Real Estate Agency
Hiring a real estate agency to handle marketing efforts and some customer service is a time-saving and cost-saving option for landlords big and small.
In the Land of Smiles, this should be a TREBA licensed agency, like PropertySights Real Estate. Taking advantage of our expertise comes with several benefits including established relationships in your target property market, a variety of reputable agents, and reliable marketing channels.
Property agencies in Bangkok charge a standard commission rate based on the length of the lease. They typically include marketing services, lease agreement signing, and check-in and out. The rates are as follows:
- 2 months’ rent charged for a 3-year lease
- 1.5 months’ rent for a 2-year lease
- 1 months’ rent for a 1-year lease
- 0.5 months’ rent for a 6-month lease
Managing A Rental Property
Managing a rental property is an ongoing commitment for landlords. It involves preparing contracts, handling deposits and lease payments, cleaning and organizing rooms for new tenants, and supporting them throughout the period of their lease.
While some real estate owners handle these duties on their own, many prefer to hire professional and trustworthy property management services instead. This is a common practice for landlords based overseas as it ensures that the property is in good hands.
FAQs About Renting Out Real Estate In Thailand
How Long Does It Take to Find a Renter for a Property?
It typically takes 1-3 months to find a renter for a property in Bangkok. However, this will depend on several demand-driving factors including:
- The unit’s interior decor, view of outside, and floorplan
- The price of rent versus comparable properties
- The state of the economy at large
- The age of the building
- The property’s location
- Marketing efforts
What Happens if the Lessee Doesn’t Pay Their Rent?
If the lessee doesn’t pay their rent, the rules stipulated in the lease agreement apply. If the payment due date passes by, there may be a grace period of a few days followed by daily missed payment fees for one or two weeks. If the lessee still hasn’t paid, the lessor has the right to evict them.
Revisions to the 2019 Lease Control Law state that if the lessee fails to make a regular payment, the lessor can bar them from entering the property. The same law allows lessors to collect 3-months’ rent as a security deposit which can be confiscated if the lessee violates the lease agreement.
What Information Should a Lease Agreement Contain In Thailand?
A lease agreement in Thailand should contain the following information:
- Lease term.
- Tenant information including full names of everyone living at the property.
- Property information including address and name of owner.
- Security deposit details including the amount and conditions.
- Rent details including the amount, when it’s due, and late fee policy.
- Who’s responsible for repairs and maintenance of the property.
- Furnishings including photos prior to the lessee moving in with replacement prices in the event of damage.
- Various additional policies, restrictions, and rules on topics such as pets, parking, and subletting.
For more information on renting out real estate in Thailand, contact PropertySights Real Estate’s team of licensed professionals today.
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