Bangkok 2-bed condo at THB 47.7m and THB 350,300 rent — does the yield hold up?

E

eva.rose

Property investor
I’m deciding whether to pursue a 2-bed Bangkok condo priced at THB 47,700,000. Expected rent is THB 350,300/month, giving a headline gross yield near 8.8%.

The building looks sound. My conservative model already includes vacancy, management, routine maintenance and one larger repair reserve, but financing costs could materially change the outcome. Which local ownership or turnover cost am I most likely underestimating, and what net yield would compensate you for the risk?
 
The gross calculation works: THB 350,300 over 12 months is THB 4,203,600, or roughly 8.8% of the purchase price. I would scrutinize whether that rent is actually achieved rather than advertised. Also confirm common-area charges, possible owner contributions beyond routine fees, and the cost of replacing furniture or appliances if it is let furnished.
 
Is the THB 350,300 supported by a current lease, recent comparable contracts, or an agent’s estimate? That matters more than fine-tuning maintenance assumptions. I’d also want the expected lease length, likely tenant profile, management percentage, common fees, insurance, property tax and leasing commission. A single empty month plus an agent fee at turnover can make the annual result look quite different.
 
Joana’s questions are the right ones. I’d calculate two returns separately: the property’s net yield before financing, then the cash-on-cash result after interest and principal payments. Otherwise a poor loan can make a sound property look bad, or leverage can disguise weak property economics. Stress the model with lower rent, a longer vacancy and higher financing cost occurring together.
 
I partly disagree with putting financing near the top of the list. First establish whether there is a deep enough tenant market at THB 350,300/month. At that level, turnover risk may be less about average Bangkok vacancy and more about how many realistic replacement tenants want this particular building and 2-bed layout. Debt sensitivity comes after the rent is credible.
 
Build a simple annual waterfall: collected rent, less vacancy, leasing costs, management, common charges, insurance, property tax, unit maintenance and the larger reserve. Divide what remains by THB 47,700,000 for the unlevered net yield. Then add financing in a separate column. I would not choose a universal target yield; I’d require enough margin that modestly worse rent, vacancy and borrowing assumptions still leave positive cash flow.
 
One more caveat: don’t treat every repair as a smooth annual percentage. Air-conditioning, appliances and interior work can arrive in clusters, particularly between tenants. Ask for the unit’s inventory and age of major items, plus the building’s fee history and planned works. Those details will make the reserve less arbitrary without pretending the timing is predictable.
 
Before proceeding, I’d ask for three things in writing: evidence supporting THB 350,300/month, the complete recurring owner charges, and a realistic letting/renewal cost. Then run break-even rent under the proposed financing rather than debating an abstract acceptable yield. If the deal only works at full asking rent with quick tenant replacement, the 8.8% headline is not providing much protection.
 
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