Becoming a Landlord
The number of foreign nationals owning properties in Thailand is continually growing. The majority of these properties are being used as a primary residence by long-term residents but there is also a significant number of expats buying properties for rental income in Thailand.
- Thai property can potentially yield strong rental returns particularly in main cities such as Phuket.
- Many property owners are turning to rent in these areas in order to maximize their property’s true worth and also to take advantage of the rapidly developing rental markets.
Ideal Rental Property
Unlike the major cities such as Phuket, rental properties in tourist areas are targeted towards short to medium term rents with variable rates depending on the season.
- Properties that are highly sought after in tourist areas, however, have a historical tendency to be more lavish as those on holidays tend to spend more.
- They will be looking at luxurious condominiums, serviced apartments or a quiet but grand villa overlooking the seaside.
- They will also expect amenities to be equally extravagant with at least a swimming pool, gym and an entertaining area.
Now that all the hard work has been done and you are the proud owner of a lucrative investment property in Thailand, there are still a few more legal matters that should be brought to light.
- Renting can either be a straightforward process or it can be an absolute nightmare.
- Many countries around the world have developed laws to regulate the, at times, strenuous relationship between the landlord and the tenant. It provides measures of protection and certainty for both parties to make rental arrangements as fair as possible. At the present moment, Thailand does not have a Landlord and Tenant’s regulation per se and does not really have a system which regulates this need. As such, the laws governing this area are ad hoc at best with contract laws offering the best protection for either side in the arrangement.
- There are no standard contracts for rental agreements in Thailand. It is possible to purchase a pro forma one page contract from the local stationery store but this is sometimes only available in Thai and it is, in many ways, quite inadequate.
- The general laws of Thailand regarding landlords and tenants are largely pro-landlord.
- Very little legal protection is afforded to tenants. This is due again to the lack of laws and ministerial regulations governing the renting of properties.
- Contracts thus, have a tendency to be more biased towards the stronger party, and in most cases, the landlords as property owners are usually the stronger party.
- This may seem like good news to landowners but they may still experience difficulties with tenants because it is sometimes difficult to enforce legal obligations due to a lack of enforcement rights and lengthy procedural rules.
Therefore, even as a landlord and holding some legal superiority in contract agreements, it is often best to make a contract as fair and reasonable as possible. Not only will this reduce future problems with the tenants but it also serves as a good start to a long term business relationship with them. Renting can become quite a gruesome process and making things fair right from the start goes a long way in making the process a lot more satisfying for all involved.