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| Sincere Real Estate Media Press |
• บทสัมภาษณ์คอลัมน์ Home Doctor หนังสือ Property Report Thailand - November 08
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Location, Location... Presentation
How to maximize rental yields from a buy to let property
by Jack Miles
With many owners buying to let, and with property prices now at elevated levels, rental yields remain an important factor. This is especially so when considering that under current market conditions, the possibility of capital growth in the short term is no longer assured.
One commonly overlooked aspect of renting out a property is that calculations for yield are usually based on full occupation. For owners, this means finding tenants quickly and ensuring that they stay for the long term. So what exactly are the secrets to letting a property for maximum return?
Chayaphon Hunrungroj, Managing Director, Sincere Real Estate Co Ltd, told Property Report Thailand, Location and presentation are the two key factors that will determine success. If you are looking to buy a property to rent out, then it is important to make sure that it is located close to good facilities such as transport links or popular shopping complexes. This will ensure that the property will remain sought after from the point of view of prospective tenants.
As regards decoration and presentation, this can be a deal breaker all in itself. Chris Heath, Director, Soho Properties Co., Ltd. said, The main thing that lets down a property is a poor or dated look. In some developments, badly maintained common areas can certainly be a hurdle. It would be worth pursuing these matters with the juristic person such that improvements can be made This can turn out to be a big factor, since first impressions count, and a nice lobby area, for example, will be a good start. Heath Added.
Of course, ultimately, it is the look and feel of the living space itself which will be under most scrutiny. It is essential to invest in presentation. Good quality furnishings, classy fittings and a repaint can markedly improve and revitalize any space.
Not surprisingly, realizing this important goal is often unpalatable to owners since it entails substantial upfront costs that must be borne before any rental income is forthcoming.
The best way to think of money being spent on furnishings and fittings is to consider the loss of rental that would have to be endured should the property happen to be empty for several months of the year. In this way it can be seen to be a good investment. Hunrungroj said.
So just how much should be spent at the outset to achieve full occupation without wiping out too much of the future return?
Typically expect to pay between one and one and a half years of rent receivable for a good renovation that will ensure a speedy let. There is no need to spend double or triple this amount as it is quite easy to shop around and achieve the same result using the lower budget. The main thing to ensure is that the entire place has a modern, clean feel to it. Hunrungroj added.
In regard to style, it seems that colors do count, with white becoming increasingly less appealing. Choosing pastel emulsions such as cream or beige for walls is certainly more welcoming than white as these warmer shades are now considered to be more modern looking. Heath said. Appliances such as classy microwaves or wall mounted LCD TVs are now relatively inexpensive and will certainly help to persuade prospective tenants to move in. Dark wood is also in vogue as regards furnishings and so by opting for these color schemes a new look can be created even in an older property. Heath added
A minority of owners provide unfurnished properties at a lower rate so as to avoid spending money at the outset on furnishings. Unfurnished properties can certainly appeal to some prospective tenants, and may well lead to a longer and uninterrupted let, something that appeals to all property owners. Yet, it will certainly not be a way to maximize yield. Rental rates are often discounted by as much as thirty per cent to make up for the fact that the tenant will be required to invest in furnishings upon moving in.
Hunrungroj said, Usually owners who offer fully furnished properties expect to renovate them approximately once every eight years. Since the cost can be recouped in a fraction of that time it can be seen that this is a good way to proceed.
When it comes to marketing a property, owners who employ the services of a real estate agent may find themselves entirely reliant on the agents ability to find a tenant rapidly. One way to check if an agent will act diligently and speedily on your behalf is to approach them in the first place not as an owner, but as a prospective tenant. You can then get a firsthand look at how they present properties and can use this experience when deciding whether or not to employ them in your quest to rent out your property.
This approach has a second benefit, namely, it will provide inside information on exactly how the best properties are presented. By putting yourself in the prospective tenants shoes you can very quickly see what is sought after and can tweak your offering accordingly.
Once over the hurdle of finding tenants, keeping them is the next consideration when it comes to maximizing yield.
It is certainly the case that maintenance plays a big role in keeping tenants over the longer term. Issues such as a broken air-conditioner not being dealt with quickly could prompt a tenant to start looking at alternative places to live going forward Heath commented.
It is worth having good, reliable service contacts in place who can be employed remotely and at short notice to deal with all aspects of maintenance. A reputable agent offering this service may well turn out to be invaluable in this regard.
Being responsive will go a long way in securing a good relationship with the tenant. Heath added. This will not only ensure full occupation but will likely lead to a renewal, something that is very welcome for any owner, particularly in the current climate.
http://www.property-report.com/em_archives.php?id=1752&date=0811
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• บทสัมภาษณ์ ลงหนังสือบ้านพร้อมอยู่ สิงหาคม 2551
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• โครงการที่กลุ่มบริษัทดูแลการขาย ลงหนังสือ Multimillionaire’s House Magazine มิถุนายน – กรกฎาคม 2552
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| Sincere Real Estate Property Press Release |
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December Highlight Properties for Sale
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December Highlight Properties for Rent
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December (Saving Plan and Saving Tax by Saving Money on Your Condominium Purchase)
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Bangkokbiznews Issue 1
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