With the return of tourists eagerly anticipated, many landlords will be getting their units available for rent. However, even before the pandemic, demand for long-term rentals was diminishing, and demand increased for short-term options. While on the face of it, you may wonder what the issue is, rentals of less than 30-days are illegal in Thailand unless the property has a hotel license. So, where does that leave landlords and tourists?
What about Airbnb?
We are all aware that many condo units are available for rent on Airbnb at daily rates, but they are still illegal. However, an increasing number of condominium buildings are now applying for hotel licenses to make them feasible. While some management companies may turn a blind eye, should something go wrong, it could leave you in hot water with the authorities. Our advice is only to offer units for leases over 30-days unless the building has a hotel license that covers your unit.
Why are so many units available for short-term lets?
Yes, you will find an abundance of options available, but this is more a result of necessity than design. Quite simply, trends have changed, and demand currently is low for long-term rentals. However, we anticipate this changing once the Eastern Economic Corridor (EEC) gets into full swing and more working expats come to live in the city. The economic conditions globally are challenging, but this isn’t a new ruling.
Why is the law “suddenly” starting to be implemented?
There are many reasons which we could speculate about why the law is now being more heavily implemented, but it is something that has been happening for years rather than something that has suddenly happened. One thought is that the hotels are complaining and feel that they are now facing unfair competition. In contrast, others think that it is co-owners who have a problem due to the continual changing of tenants, causing disruption.
Essentially, like many rules in Thailand, it is nothing new but is now more tightly enforced. It is unlikely that the rules will be relaxed soon, so investors may want to choose carefully when selecting properties opting for properties that are more desirable for long-term tenants rather than holidaymakers. A reputable real estate agent would be able to advise you on the options.
What if the condo does have a hotel license?
This is a potential grey area with many condos having a hotel license, but it doesn’t cover all units. It is worth talking to the juristic office and the committee regarding the position, but it is worth noting that you may face resistance and opposition. Some juristic managers believe that they have covered themselves if they have warned owners about the perils of short-term rentals, but this doesn’t seem to absolve them of blame, so they may wish to implement rules to ensure that they have covered themselves.
We would recommend that investors search for properties that will appeal to long-term tenants. Often this is in the higher quality buildings in areas such as Wongamat or Pratamnak that will appeal to working expats or conveniently located properties that appeal to retirees.