Thailand might not have the highest yields in Asia, but you can find some great deals if you work with the right agent and target the right area.
Certain sizes of units such as 2 – 3 bedrooms can also perform better as the quality of tenants is generally higher and there’s reduced demand for these kinds of units. Again, you must work with an agent that has a deep knowledge of the market and can come up with promising options.
In this article, we review the most popular cities among property investors in Thailand and check the average rental yields. If you have any interesting insights, feel free to drop a comment below.
Rental Yields in Different Cities in Thailand
In this section, we review the cities one-by-one and compared the rental yields. Let’s start with the capital and where we see the biggest uptake of units from foreign investors.
Bangkok
While condominium units along Sukhumvit Road can fetch up to THB 300,000 – 500,000 per square meter, it’s highly sought after among foreigners who invest in Bangkok. Areas like Silom-Sathorn also become increasingly popular, even if it’s located primarily catering to business professionals and not to tourists and travelers.
Freshbangkok has done an analysis of various condominium projects located along with the prime areas in Sukhumvit and Silom-Sathorn. Due to their popularity, we will focus on the areas in this article.
Rental Yields in Sukhumvit and Sathorn-Silom
The website collected estimated rental yields for 15 projects on the three biggest real estate websites in Thailand, Hipflat, DD Property, and Dot Property. The analysis and research showed the following average yields for the 15 projects on the websites:
- Nana: 5.24%
- Asoke: 4.50%
- Phrom Phong: 4.59%
Worth mentioning is that Nana scored higher yields due to the lower property prices in the areas. By comparison, the prices in Asoke and Phrom Phong are around 30% higher compared to Nana, which leads to lower yields.
The estimated rental yields in Sathorn-Silom were calculated in the same way and where we see the following results:
- Silom / Sala Daeng: 4.43%
- Chong Nonsi / Sathorn: 4.55%
Considering the popularity and comparably high real estate prices in these prime areas, I’m surprised that yields average between 4.43% to 5.24%. Worth mentioning is also that the average rental yields on Dot Property are significantly lower than Hipflat and DD Property, which affect the results.
Bear in mind that these are average yields. If you work with the right partners and put some effort into your research, you can find units that generate yields well above these numbers.
Phuket
Phuket relies heavily on tourism and has, like Bangkok, been affected badly during the COVID-19 pandemic. With that said, I do believe that Bangkok is more stable and with more reliable numbers than Phuket.
This mainly boils down to the fact that:
Foreigners predominantly buy condominiums in Bangkok while there are various investment options in Phuket such as bungalows, villas, condotels, and more.
Calculating the average rental yields results in a number that is hard to grasp. Besides, small geographical differences can have a large impact on the rental yields and the opportunities to rent out units
Phuket relies heavily on tourists from places like Russia and China. These might start to move elsewhere, such as to Vietnam, when the tourism industry continue to develop there.
As mentioned, Phuket relies heavily on tourism and you won’t find any universities, multinational HQs, and banks that bring demand for real estate in places like Bangkok
Guaranteed Rental Yields
Projects are often promoted as to providing guaranteed rental incomes that range up to 15%.
It’s hard to know whether developers can fulfill these obligations, especially in economic downturns as we have witnessed during the COVID-19 pandemic
So, back to the question at hand: What kind of rental yield can you expect in Phuket?
There are limited data and information related to rental yields in Phuket. While there are projects that offer 6%, 7%, or even up to 15% in guaranteed yields for a few years, it’s quite important to understand what the unit can yield after this period has ended.
Some claim that yields can fetch from 5% up to 10%, but this will highly rely on where you buy and at what price level.
Pattaya
The same as it goes with Phuket, there are significantly fewer data available from firms that have analyzed rental yields in Pattaya. Agents and advocates tend to “shot from the hip” and tell you that yields range from “5% to 10%”.
With that said, we prefer working with data that can back up such statements, making real estate buyers more confident in their choices.
Due to the limited data available, we could only retrieve data from Numbeo, claiming that investors can enjoy the following yields on average:
- Gross Rental Yield (City Centre): 5.54%
- Gross Rental Yield (Outside of Centre): 6.03%
Numbeo is not always a reliable source of data and these numbers seem a bit high. With that said, property buyers or agents might have added guaranteed rental yields into the calculation, which would unquestionably drive up the numbers.
Again, it’s important that you work with a partner that has in-depth knowledge about the best areas and projects to buy real estate, no matter where you buy.
FAQ
Below I have included some commonly asked questions and our replies.
Which countries have the highest rental yields in Asia?
If you want a comparison between rental yields in Asian countries, it’s generally preferred to look at the largest cities or the capital cities. The reason for this is that yields can differ significantly between cities and there’s often limited data available in smaller or less densely populated regions.
According to the analysis, the following cities have the highest rental yields in Southeast Asia at the moment:
- Ho Chi Minh City: 5.8% (Savills)
- Jakarta: 5.2% (Savills)
- Kuala Lumpur: 4.8% (Savills)
- Manila: 4.3% (Savills)
Can foreigners rent property in Thailand?
Yes, travelers, foreign workers, and students are all allowed to rent property in Thailand. It’s popular that foreigners reside in condominiums in places like Bangkok, thanks to the comfort and central locations.
Issues such as disputes with neighbors, noise, and pollution are generally reduced when opting in for this option as well.
What’s the rental income tax in Thailand?
The rental income tax increases progressively from 0% to 37%. For more information, I recommend that you read our separate article that explains how foreigners can buy real estate in Thailand.
