We have compiled a number of links below pointing to information on various subjects. We believe the information below will provide you with an overall guide to Pattaya, Jomtien, the Eastern seaboard, and Thailand in gerenral.
If you require any further information or if we can assist you with relocating to Pattaya, Jomtien or the Eastern seaboard, please do not hesitate and contact us...also for further information and to stay updated why not visit our AllPattaya Directory page.
Every few years, the real estate market suffers through a crash or a correction and underscores a perpetual dilemma for small and mid-sized businesses: Is it better to rent or own commercial property?
Buying commercial real estate is a complex undertaking that is difficult even for experts to time right to maximize their investment value, let alone entrepreneurs or business executives whose areas of expertise are in different industries. It's also a venture rife with risk, as buyers, sellers, agents, and renters alike can suffer the consequences of a dip or spike in demand. At the same time, for a business, on the upside the potential rewards can be substantial.
Why should a business buy? "To get a greater control over the cost of the real estate component of overhead, as opposed to leasing, where you can be victimized by the market if the lease rolls over when the market is tight and, as a result, you have higher rental costs around the country.”The other benefit would be investment benefits, including depreciation of the property for tax purposes and, over the longer term, asset appreciation."
There is no one-size-fits-all strategy for purchasing commercial real estate. That decision must be weighed by each business. The following guide will help a small business assemble a real estate search team, choose a location, and purchase property.
Purchasing Commercial Real Estate: Deciding to Buy Versus Lease
when deciding whether to buy commercial real estate, it's important to understand the potential risks. The last thing you want is to buy property and realize a year or two later that you would have been better off renting. Here are some of the potential risks a business faces when buying:
• Location may backfire. Today's "hot" neighborhood can become tomorrow's "not" neighborhood. Locations are trendy. Gentrification may stall. The market may go bust. The area you choose one day may become undesirable the next. Of course, the reverse can be true, as well.
• Loss of liquidity. Businesses may tie up much of their liquidity buying real estate. It's not always easy to sell real estate, particularly in a slump. At the same time, businesses that own real estate at least have something to sell if they need a cash influx to revive a lagging business.
• Tenuous cash flow. Tenants sometimes stop paying their rent. Other times, buildings are in need of unexpected -- and expensive -- repairs. Your cash flow can become compromised, especially if you are forced to simultaneously pay repairs and Legal fees to handle a tenant situation.
In order to be aware of risks, do your homework. Undertake extensive due diligence before signing any contract. You also need to be hands-on with your commercial property by overseeing every level of operation and making frequent on-site visits -- otherwise, you may learn about problems after it's too late to do anything to fix them.
The decision ultimately comes down to the economics. We at Pattaya Realty Commercial will help you undertake a rent versus own analysis, taking into account growth forecasts for your business and real estate market trends. "It's really beneficial to sit down with an expert that can lay out options for you and discuss scenarios, such as in three years this is where business will be in terms of revenue, size, or people. This is how many locations we will have. a national brokerage focused on real estate investment. A real estate expert can also help you figure out the costs of renting versus buying, factoring tax benefits such as depreciation.
Purchasing Commercial Real Estate: Assembling a Team of Experts
• Location. This is still the No. 1 issue. You want to be close to your customers, your workers, and your vendors or suppliers. "You want to be convenient to customers to the extent that you have a business where the customer comes to you, "But depending on the type of business, access to rail and highway and shipping lanes may be important, too."
• Allowable uses. If your business is an accounting firm, you likely need commercial office space. If you are a manufacturer, you need an industrial space. Either way, you need to make sure the zoning allows you to do what you need to do on the property.
• Opportunity for expansion or leasing. Entrepreneurs often have a rosy outlook about growth and so the potential to expand is a consideration as is the flipside - if you don't grow as much as planned, can
Renting or Leasing Commercial Property
Renting commercial property usually represents a major part of the operating costs involved in running any business. If you include surveyor's and solicitor's fees, rent, business rates, insurance, service charges and/or repairs and maintenance these items can easily make up 20% to 30% of your first year's operating expenses.
It's very important therefore that you get the right premises for your present and future needs and that you don't commit yourself to something you cannot afford if things go wrong, or if your new business does not take off as planned. Remember, something like 2/3rds of all new businesses fail within the first 3 years!
Not many new businesses have the wherewithal to buy a freehold property, so taking on a lease is often the only option you have. If you are new to renting business premises you need to be aware that there are a lot of legal implications which may not be immediately obvious.
The Commercial Lease and Negotiations
You should be aware of some important differences between renting residential accommodation and taking on a commercial lease if you are to avoid some serious potential pitfalls:
• As a commercial tenant you have far less protection than a residential tenant. In effect whatever contract you negotiate is binding on you and your business and by not fulfilling all your obligations you can end up with serious financial consequences.
• Commercial (business) leases tend to be much less standardised than residential ones, and therefore you need to read them very carefully.
• You need to bear in mind that with a commercial lease almost every aspect is open to negotiation. You can do this yourself providing you know what you are dealing with, otherwise get expert help.
• Market forces determine the nature and terms of a business lease much more than with a residential tenancy. If the current market favours the landlord, there being a high demand for his property, then he can negotiate more favourable terms for he, and vice versa.
Business leases are often of the "Full Repairing and Insuring" (FRI) variety, which means that you as tenant take on all repairing and maintenance obligations and building insurance costs.
The Lease term.
Generally speaking the longer the term you are willing to commit yourself to, and the more onerous your lease terms, within reason, the lower should be the rent you pay, and of course, vice versa.
You need to negotiate the best deal you can on rent. It's usual for a lease to contain provisions for rent reviews a certain periods, for example every 3 years. Depending upon the market and the area you are in, your rent can increase considerably over time.
A New Business Tenant's Checklist
Find out the market rent in the area. This can be done by asking Patty Realty Commercial and checking comparables - rents and prices of local property currently let or recently let or sold.
What is the norm in the area for lease terms given the state of the local market and the condition of the premises? Again look for comparables.
Have you considered the lease term (length). Is it appropriate or are you taking too big a risk if things go wrong?
Is the lease quite short, or is there an unconditional break clause in the lease, allowing you to surrender it early?
• Does the landlord require a guarantor - someone to stand surety and guarantee rent payment on your behalf?
• Does the landlord require an ingoing premium payment or a rental deposit?
• Can you provide good references if the landlord requires these from your bank, your accountant or trading suppliers or customers? Will you pass a credit check?
• Landlords sometime ask for a contribution to or even the full cost of the lease from the in-going tenant. In the case of secondary properties this is negotiable. A fair compromise on this is that both parties pay their own lea gal costs and the cost of the lease is shared 50/50.
Bangkok Bank PCL.
Bangkok Bank in Thailand itself does not provide loans for foreigners under any circumstances. Only Bangkok Bank in Singapore provides this service to foreigners.
Bank of Ayudhaya PCL.
Bank of Ayudhaya does not offer loans to foreigners at this present moment.
HSBC does provide loans to foreigners under the following conditions:
• Residence Permit, 1 year work permit, letter of employment, company’s documents or other pertinent documents upon request.
• Bank will grant loans for foreigners based on the current market value:
- Condominium 70% of the value and Land and House up to 80% of the value.
- An amortization period of 7 years.
Kasikorn Bank does not offer loans to foreigners at this present moment.
Siam Commercial Bank PCL. (SCB)
Provides loans for foreigners under the following conditions:
• 1 year work permit, consideration based on rate of salary, background check for the employment and credit rating.
• The foreigner can receive a loan for a condominium or house.
• A joint loan can only be obtained between blood relations.
• Amortization period of between 5-7 years.
For personal loans, SCB only grants credit cards, but not for personal business loans.
Thai Military Bank PCL. (TMB)
Provides loans for foreigners (only condominiums) under the following conditions:
• 2 year work permit or 2 years residence permit, passport, letter of the employment, payment slip and other supporting documents requested.
• If the foreigner has some added security finance, this will be an added appendage for the banks to consider.
• If the loan is for landed property, a foreigner will only be able to obtain a loan if they apply jointly with a Thai spouse.
UOB Public Company Limited
UOB in Thailand provides loans for foreigners under the following conditions:
• A loan for landed property can be obtained by a foreigner if it is applied jointly with a Thai spouse.
UOB has launched the new International Home Loan Scheme for Thailand to allow foreigners access to financing when they wish to buy condominiums in Thailand. This is a joint financing program between UOB in Thailand and UOB in Singapore. Loans will be obtained in UOB in Singapore and secured by SBLC which will then be issued by UOB in Thailand which will in turn register the mortgage locally.UOB in Thailand suggests that the entire application procedure can be done within Thailand without the applicant going to Singapore.
Provides loans for foreigners for condominium under the following conditions:
• 1 years work permit.
• Tisco will grant loans for foreigners based on the market value of the property: offers lending for condominiums for up to 70% of its value.
• Foreigners can borrow a maximum of 5 million Baht and not less than 700,000 Baht.
• Amortization rate of 10 years.
Standard Charter Bank (Thai) Public Company Limited
Standard Chartered does not offer loans to foreigners at this present moment.
Commercial Property Guides