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If you drive around the island one
thing you'll notice is the lack of signs for land or property for rent.
You'll see signs for 60 Rai by the beach for sale, which if you have a
couple of million dollars in the bank might be up your street but for anyone
who doesn't wear a different Rolex every day of the week the options may
seem limited.
Fear not, there are still quite a lot
of places for rent, it's just that you only here about them by word of
mouth. This means speaking to locals, they know who the landlords are
and what is and what isn't available for rent in a certain area.
People to avoid speaking to are the
westerners running bars who apparently know it all. They don't, and
neither do I for that matter, but there again I'm not claiming to unlike
many of the bar owning experts. These are the guys that will tell you there's a conspiracy against foreigners renting or
buying the cheapest land, the only land to be had anywhere will cost over 10
million baht / rai and that a house barely big enough to swing a cat in, but
priced at around 3 million baht is, a realistic price - and luckily for you
they know one that's up for sale . . . but you have to act quickly and pay a
deposit now!!.
It's also worth mentioning that it's
very rare to see any existing business for rent / lease on Koh Chang that could be described as 'competitive'. Sunbelt Asia
run a well-known website for buying/selling/leasing businesses or property in
Thailand and they occasionally have property on Koh Chang for sale - worth a
look if you're happy to pay a hefty premium to ensure there are no
hassles during the buying process. On the whole when you see a small,
recently established business up for sale, alarm bells should start ringing.
More often than not the sale is simply due to the business being
unsuccessful and the owner trying to recoup his losses by selling to a
fellow foreigner before moving on to another island.
Back in 2003, when we were looking for land to rent
to build a coffeeshop & bungalows we knew that we wanted something on the
west coast of the island, where 95% of the visitors go, but didn't have any
real preference over location . . . price was more important to us. We
searched the net, including Thai websites, but it all seemed rather
expensive.
So we spent over a month just driving to different areas of the island and
asking stallholders, shopkeepers and resort staff about any land nearby that
was available.
You'll also see a few roadside signs in
White Sand Beach, Klong Prao and Kai Bae for real estate agents with land or shop
units for lease and sale. Two common
themes crop up when people tell me about their experiences:
1) prices quoted
are high but fortunately the well spoken Thai owner will always succeed in
getting a good discount for you. Wow, must be a bargain if the
price is 20% lower. (Either that or the price was significantly marked up
initially.)
2) You get the usual bullshit - yes the land has a Chanote or Nor Sor Sam title
(so you can easily build on it) but unfortunately you can't see the actual
title deed. This is crap, anyone wanting to sell or lease land will
be able to provide a photocopy of the relevant title deed at short notice
and without difficulty.
If you
encounter this scenario, you're probably being shown Por Bor Tor land who's
owner hopes an upgrade soon and the hope is that you'll like the location,
like the generous discount and will therefore eventually buy it regardless
of title. If you're planning a small resort, you need to be leasing or
buying titled land.
Landlords
These fall into two camps - the
businessman from the mainland who's bought up lots of land on the island; and the
local family who were penniless until 10 years ago but now have land valued
in the millions (of baht and often dollars) in their possession. Early
on we decided that we'd prefer to deal with locals rather than the business
types this wasn't based on any one reason but just from the 'vibe' that we
got when talking to landlords. The guy we ended up renting land from
is about 70 years old and has rented out all his land, regardless of
location for the same price as he likes to keep things simple, he only rents
to people he likes and as such it took a few visits to his house to convince
him to rent his land to us.
So, you find some land, agree a price
and you sign a contract to rent it. Most contracts are of a standard
type, they are available for a few baht each in stationary shops across
Thailand. They're in Thai and may have a couple of clauses that you
want to eliminate, such as the landlord has the right to sell the land
anytime he likes and kick you off, but these can usually be crossed out easily enough. You
fill in the appropriate details, names, addresses, amount to be paid each
year, term of contract and sign . . . .simple.
And it is simple, if you are renting
for no longer than 3 years. ** This type of contract is legal for a maximum of
3 years only.** That's something I'll guarantee a minimum of 9 out of 10
landlords won't mention.
So, if you want to build something
substantial on the land you'll be looking to rent for a minimum of 9 years
in order to make a profit & recoup your initial building costs. It's
very easy to simply write '9 years' or '15 years' as the length of rental
period but unfortunately as soon as the three year mark passes it's
irrelevant, the contract isn't valid and the landlord can take back the land
anytime he likes. You can give the land up or enter into a legal
battle that will drag on for years.
In order for a rental contract for over 3
years to
be legally valid it has to be registered at the government Land Office. Virtually
none of these type of contracts are on Koh Chang and there have been cases
with people on supposedly long contracts being told to leave when the owner
of the land decides to sell it or develop it themself.
To register the contract all that is
involved are the lessee and lessor heading to Trat, signing the contract at
the Land Office, paying a fee equivalent to one-thousandth of the total
rental cost over the duration of the period of the lease and getting the
contract stamped by a Land Official. Nothing that is difficult or
expensive to do, but something that the vast majority of landlords aren't
interested in doing for their own, unmentioned reasons.
However, this is only possible if the
land has a recognised title deed - e.g. Nor Sor 3, Nor Sor 3 Kor or Chanote.
If you are renting farmland then there is no way you can legally lease it
for over 3 years - regardless of what the landowner may tell you.
The options for renting land/property
longterm without registering a lease at the Land Office are limited to:
1) Inserting a
remark on the initial 3 year agreement that the contract will be renewed
for, in the example of a 9 year contract, two subsequent three year
agreements and, if possible also shows the amount of rent which will be
payable during the subsequent 3-year terms. When the first contract expires you then sign another three
year contract which includes a remark that this will be renewed for a
further 3 years. But you can't guarantee this renewal in any way
2) Don't seriously consider having the landlord
sign postdated contracts for future three year terms, as you'd look a bit of an idiot trying to convince a judge that a
contract dated 1 June 2012 should be considered legal when the landlord who
signed it has been dead for five years.
++
It's preferable to agree with the
landlord, in writing, the rent that is payable as it's unlikely to remain
fixed over a long period of time. Some contracts merely specify that the
rent will increase annually but no amount or percentage is mentioned.
Unless you trust the landlord implicitly, how do you know that they wont see your
business doing well and think that you should therefore pay 50% more rent
the following year? What would you do if the landlord asked for a huge
rent increase? Get an exact figure agreed to avoid arguments in
the future. Problems regarding increases in rent are common - there
are ongoing court cases involving businesses on White Sand Beach and Lonely beach
who have this type of dispute with the landowner.
Costs
The cost of renting varies a great
deal. I'll go through a few of the west coast locations as it's
highly unlikely that anyone looking to rent land would consider the east coast as
you need to start making a return on your investment sooner rather than
later.
White Sand Beach is by far the most expensive
location, you wont find any land for rent there and there's probably more
chance of meeting Elvis in the street than finding an available, affordable shop unit.
Expect to pay a minimum of 10-12,000 baht/ month for a 3-metre x 4-metre
concrete box on the main strip. Then all you have to do is figure out what
you can sell from it to make the profits required to pay for this, plus a
place to live and also allow for the main tourist season being less than 6
months long. Prices for units go up to around 18,000 baht/month which is pretty
crazy, in my opinion, if you're happy to pay this much then you might as well rent on Samui
as you'll pay the same but have ten times as many people passing your shop.
Whatever you do, don't pay 'key money' for any unfurnished shop units.
It's bad enough with the Thai landlords asking unknowing foreigners to pay
key money but, now there are some expat real estate agents who will try to
convince you that you need to pay 500,000 baht on top of the monthly rent in
order to secure a unit. Total nonsense. None of the Thais that
will rent the units near yours are paying any key money and neither should
you. Always deal with the owner of the units direct, don't rent
through an agent and be friendly but firm when it comes to key money.
Things are better further down the coast, a quick summary follows but
remember that these are just a few of the more popular options.
If renting a shop unit in a new Plaza
is your thing then there are two plaza's at the very northern end of Klong
Prao beach. Rent is around the 6-8,000 baht/month mark. After a
slow start, the Plazas are looking a bit livelier and some shops and
restaurants attract a lot of business. However, these tend to be
located near the entrance to the plaza and not tucked away out of sight at
the back. Units at the back tend to change owners every high season.
More shop units are being constructed
in the Klong Prao village area and the area around the new Amari Emerald
Cove Resort has a host of new shops - mainly opticians and tailors catering
solely to hotel guests. The shopping plaza here - Klong Prao Plaza - is by far the
least successful on Koh Chang with a monthly rent of 6,000 baht/month for a
unit with only a couple of units rented out since June '06.
The only people guaranteed to make money are
those building and renting out the units. Others who'll be happy to rent
include anyone who can live like upcountry Thais and is happy to make 200
baht/day profit and sleep in the back of the shop unit and those with a bit
of imagination.
Virtually all the rentable land around
Kai Bae is owned by a couple of local families. In the northern end of Kai
Bae the land that was available until mid-2005 went for about 80,000 baht/year for a 8 metre x 20 metre roadside plot - enough to build a shop,
restaurant &
accommodation but nothing more. Shop units/houses near the entrance to
Kai Bae Hut are around 8,000 baht/month and a large new detached building
for use as living accommodation plus a restaurant or large shop will set you
back 200,000 baht/year. The two plazas in Kai Bae rent units for around
10,000 baht/month. But as you can probably guess it's only the units
that actually lie on the roadside that get any custom and the plaza
management, despite initial good intentions, seem intent on putting off new lesses by allowing wooden beer bars to open up on all open areas of the
plaza. '339 Plaza' is the prime example of this, nicely built but
badly designed, the roadside units were rented quickly, those inside the
plaza & hidden from view rarely see a customer and most are vacant. Having beer bars lit
with garish fairy lights doesn't attract hotel guests to spend their money
in the shops here - but why should the plaza owner care about the people who
rent the units? In June 2007, construction on more small boxlike, shop units on the
roadside nearby began.
Moving a couple of kilometres south to
Lonely Beach and the roadside shanty town of swimwear shops, restaurants and
bars. The recent increase in the sheer numbers of small shops, slummy
bungalows and bars means that it's hard to make money here now if you lack
imagination.
The lack of space means that if you do find a few square metres to rent
you'll have to be very up close and personal with your neighbours, and
shouldn't count on getting to sleep early. On the
plus side it's far cheaper than Kai Bae. Jan '08 and Lonely Beach is
still growing, more shops, new roadside bungalow resorts are springing up
and it is still possible to find small shops or plots of land to rent but fickle backpackers make up 90% of the custom so having
experience dealing with them and knowing their tastes is a big plus.
Bailan is the last bay on the west
coast and until recently was still home to only a couple of backpacker
resorts. However, since late 2003 at least three new bungalow resorts
and one mid-price 35 room resort
have been built and a large 90 room resort, Princess Resort, which will be managed by the Dusit Hotel group is under construction &
will be open for the 2007-08 tourist season. This is
where we originally rented land. We got hold of one rai of land
roadside, about 40 metres roadside frontage in the centre of the hamlet for
35,000 baht/year. (In the end we didn't have the time to do
anything with the land and so gave it back to the owner.) Within a
year or two they'll be a load of shop units to rent here with vendors vying
for the attention of the Princess Resort's guests.
There's not a lot that's conveniently
located and also rentable in the Bangbao area. If you want to sell
something you need to rent a house in the village and they're extremely hard to
come by. Land owners are looking to
sell as a large resort, Nirvana, distorted land prices a couple of years ago by paying
a huge premium for land which bordered another plot that sold for 300,000 baht/rai
only a few months earlier. The lack of buildings in Bangbao also means that
a small house in need of total renovation can fetch 2.5 million baht.
Real bargains are no longer possible to find, but if you are interested in
renting as house / small shops sometimes come up for rent and they re only
advertised by notices pinned to shutters or lamp posts. New shop units, on
the road into Bangbao have been available for rental from early 2006 onwards
but there haven't been many takers. The location is wrong for any
business that requires foot traffic as at present everyone drives by to the
main parking areas and then walks down the pier. If the parking areas
are relocated away from the pier then these units will see customers, if not
then I'll bet they remain empty. Early 2008 and the units mentioned above
are still available for rent.
If all else fails then you still have
the option of renting land for a karaoke bar somewhere around Klong Prao.
Rent is usually 2,000 baht/month and you will need some mates who are
familiar with knocking up overlarge wooden huts using the cheapest materials
available and scrap metal. No planning permission is required as you won't
be building your new dream karaoke bar/restaurant/motorbike rental shop with
foundations of any kind, so it isn't classed as a permanent structure.
Other costs that can add significantly
to your monthly outlay are electricity, water and phone bills. Always
ask if the electricity bill will come from the state electricity company or
from the landlord. If it's from the landlord you'll be paying a large
mark up per unit. The real price of electricity is around 5 baht/unit.
6-7 baht/unit is common and it's not unheard of for landlords to charge 8 -10
baht/unit. If you're running AC units, large refrigerators etc all day
this 'surcharge' will add at least a couple of thousand baht a month onto
your electricity bill. Water will come from a private source as there
is no central water supply. It may be free, it may be charged at a
token rate - say 100 baht/month or it may be metered and charged at 15
baht/cubic metre. This is the same as is charged in luxury apartments in
Bangkok and will result in you calculating if it's really necessary to
shower daily.
If you're lucky enough to have a phone
line installed, the bill should come via either the TOT or CAT phone company. All
local calls, e.g. to hook up to the internet are 3 baht, regardless of
length. Calls abroad to most countries are now 6 or 7 baht/minute. So, if you have a phone
line and find yourself paying per minute or 10 baht per local call, you'll
know why your landlord is always smiling. If you have a phone line
then you can apply for ADSL from TOT or CAT, expect to wait a month or
so to get hooked up though.
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