CAN ANYONE BECOME A REAL ESTATE EXPERT?
‘Shortcut to Real Estate Millionaire’, a book by a renowned author, who goes by the name of Itchy, is a step wise guide in Thai for you to discover how to make big bucks in real estate. He writes about buying condos initially with long bank loans and small deposits, thereafter renting them out, having the tenants pay the mortgage and expenses while the asset value increases steadily.
For someone who graduated in 2008, accumulating 300 million baht just by the implementation of this is not a bad deal at all! Itchy believes that spending less time and using financial know-how to generate passive income is ideal, contrary to active income in which you get paid for your expertise and time.
The book is divided into chapters which cover particular topics like – budgeting, negotiating, targeting, closing, financing and renting. It concludes with steps that can be taken by anyone and everyone to move closer to their dream while navigating through the hurdles that come in your way.
On intensive research, Itchy states that many Thai condominiums have the potential to yield a rate above 8%, while you could borrow at a rate of 5 to 6%. The property could be yours, while you take principle repayment into consideration and break even.
What he found more interesting was that being young and holding a good job could enable you to borrow as much as 80, 90 or even 100% from banks other than those that don’t lend for buy-to-let purposes.
According to Itchy, profits can be made fairly soon, monthly profits could be stimulated by renegotiating with your bank after three years to lower repayment rates.
In comparison to buildings lacking a track record, established buildings’ rental risks have proved to perform better at lower rates. The greater the purchase price sq m of a brand new property in relation to the potential rent you can receive, will render your return yield at around 5%, contrary to a carefully picked second hand property that could yield an 8% or higher yield.
Over 23,000 condos in Bangkok and Pattaya are on HipFlat.com, which is a property search portal showcasing average selling prices and 3 month rental yields. Negotiating once you select the unit that fits your fancy by equipping yourself with historical occupancy stats that you can either acquire from the principal agents of the building or on your own, would increase your chances of purchasing it at a competitive price.
Seek advice from juristic representatives of the property or other professional agents who specialise in your target market; to increase your chances to find tenants.
Keeping the aforementioned tips in mind, you will soon feel confident enough to grow your own model while not ignoring your need to borrow.
Source: Bangkok Post