Beware of the property rental sharks in Thailand.
Are you looking to rent a house or villa in Krabi or Ao Nang in southern Thailand? Phuket, Pattaya or anywhere else in Thailand for that matter? Then you should read this article and learn from my experience renting houses in Thailand.
One of the advises is to avoid the property rental sharks at all costs! But how do you find these sharks to avoid? Well…read on here…
As a property broker myself for more than 15 years I know all the tricks the brokers use to secure themselves a large piece of the cake. Here I will mention a few of them in no particular order:
1) The going procedure is that the broker gets 10% of the rental price per month for short-term or 1 months rental for long-term. Some of the high-end agencies however can charge the owner up to 30 or 40% of the rental price by offering a special VIP service to their rental clients. This is widely accepted both by owners, brokers and tenants so here is nothing to worry about: The brokers do an honest job and the owner don’t have to bother with the rentals. (Which is why the owner engages them in the first place!)
2) Some brokers cannot help it…even they get the commission they are entitled to by their contract, they still jack up the prices and rip off the tenants by adding an extra percentage to the monthly rental price!
3) The property owner do not want to pay the broker a commission to rent out his or her property. So the broker increase the rental price. The going rate is 10% of the rental price. So in this case you save 10% per month by sourcing the rental yourself.
4) The property owner do not want to pay the broker a commission to rent out his or her property. Some unscrupulous brokers increase the rental price with both 20, 30 or 50%! Beware! Both Thai and foreign brokers do this!
5) Some 100% conmen act as brokers and accept rental deposits and reservation fees online via their fake websites…but when you arrive at your destination you find out that this particular rental doesn’t exist or is already rented out or has never been for rent at all!
So how do you find those brokers in 1)…??? And how do you avoid the other 4 broker types?
First I will recommend you to search the Internet carefully for rentals in the area you are looking for. Let’s say you want to rent a house in Ao Nang in Krabi province.
You visit Google and type: house for rent in Ao Nang. Or: house for rent in Krabi. Then you search all the listings and try to find the same house on the websites. Most of the brokers have the same listings and the only thing that might differ is the rental price and the service offered by the broker.
Once you find the same house on several brokers’ websites you start comparing the monthly rental prices and the services you get for that money.
Let’s see an example:
I found a nice 2 bedroom house for rent in Ao Nang some 5 minutes drive from the beach. I found it on several websites but at different prices. Here the price is 20,000 THB per month at: http://www.propertyinkrabi.com/2011/09/two-bedroom-house-20000-bahtmonth/
Here the price is 24,000 THB per month at: http://www.krabihomesandland.com/krabi_house_rental/348/index.shtml
Then you ask yourself: What service do the latter broker offer you since his price is 20% higher per month than the first offer? Is this service worth the extra 20% on the rental price?
Now you might want to re-check. Maybe you tell yourself: The latter offer is 20% more expensive than the first offer but they do indeed have a more professional looking website…maybe they indeed offer me a more professional service after all? So you go ahead and check the 2 companies houses for sale and see if you can find the same house on both websites. The price should be the same, since a sale is a sale and no service is included in this (you always use your own lawyer to take care of the details so no need to accept any assistant from the brokers!)
And here we go:
This 3 bedroom house is found for sale at both websites. Here at the first website it is advertised for sale at 3,500,000 THB: http://www.propertyinkrabi.com/2012/05/new-3-bedroom-house-for-sale-krabi/
And here at the latter website it is priced at 3,850,000 THB: http://www.krabihomesandland.com/krabi_house_sale/225/index.shtml
Now it seems the same house is 350,000 THB more expensive on the latter website. That is a price increase of 10% for the same house. Then you can start thinking and consider which broker you want to use for your next rental property.
Please have in mind that I just chose Krabi/Ao Nang as an example since this area is less developed and hence easier to find an example. In Phuket and Pattaya you will have to spend a few days in front of the computer to find the genuine brokers!
Another way to find genuine house rentals is by asking for advise in many of the Thai forums available on the net. I’ve used that myself a few times and saved some bucks there compared to the broker website prices.
The best way however to find a rental property at a genuine price is to simply drive around yourself and look for a “For Rent” sign. Make sure you have a Thai speaking person with you, also to negotiate the price. If you cannot find any signs in your area, then ask your Thai speaking person to ask around at the local market, at the local shops and the local beauty saloons…everyone know someone who have a house for rent…
Another good advise is to visit the banks and ask if they have some houses for rent. Many banks have repossessed houses for sale but often they will agree to rent out the houses while waiting for a buyer to come by.
I wish you best of luck with your next rental in Thailand.
PS: I am not associated with any of the mentioned companies!
PPS: I posted this article once before on another blog 2 years ago… and you know what? The house for sale is already sold… long time ago… but both the brokers still have the house for sale at their websites 😀 Well… keeping up to date is not easy 😀