Rental income

As a property owner in Thailand, you can use it for your own personal use or generate rental income. If you are not engaged in a rental business on your own, the income for you will be generated by a management company or a real estate agency, for which they will withhold part of the income as a reward.

Renting business is simple. If the apartment is rented out - there is income. If the apartment cannot be rented out, then there will be no income, only maintenance costs. There are also alternatives, usually from developers, such as guaranteed rentals or participation in the Rental Pool. Often, such options are offered when selling apartments which are still under construction. What is the fundamental difference between these programs?

The essence of the rental pool is to combine all rental income with other owners of apartments of the same type, as well as share the cost of their maintenance. This type of investment helps to guarantee income to the owners, regardless of whether your apartment is rented out directly or not. Bonus compared to rent - your income does not depend at all on how much tenants will actually live in your apartment. Perhaps it will be empty for the entire period or it will be partially handed over, which means that the wear and tear can be much less.

The main disadvantage of the rental pool: the income is not fixed and depends on the real income from all apartments in the pool. The same minus can be regarded as a plus: the management company is primarily interested in generating profit - the more your profit, the greater the profit of the management company. In this case, the management company must first cover the cost of maintaining the property and then distribute the profits.

In a pandemic, the rental pool is becoming more popular. After all, by signing a guaranteed lease agreement today, you are at great risk - if the management company cannot provide you with the income specified in the agreement, most likely it will either pay much less or pay nothing - it will not have an incentive to work (the company's profit is calculated in excess of income, which are obligatory for you to pay). Then just negotiate, wait until the money appears or collect the unpaid guaranteed rent through the court.

What are the mandatory terms of the rental pool agreement? In what order does the management company pay income? What taxes will arise and who should pay them? Call us and we will answer all your questions + 6687-348-57-03 (WhatsApp).