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#1
08-12-2005, 21:13
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Taking over a small B&B / Hotel
Hi All,
I have option to take over a small B&B Hotel in Patong area. I know the owner pretty well - so not with an Agent. I have worked all over world so pretty much 'au fait' with how things work. Operated a small hotel before - went well - but in Southern Europe. Never been to Thailand - will shortly be over for a couple of months to look around etc. before making up my mind. Would like to take a couple of years to really see how Thailand is - but not go the time for that. So need your help / comments.  Crazy idea?  Might just work?  Definite nono?  Be grateful for comments from all & anyone out there who has lived and played in Phuket for some time. Hope to hear. Jeannie. 
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#2
08-12-2005, 21:19
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Like any other business that depends on Location, Location, location. Footfall, access to market, regular clientele, dont need me to tell you these things but hard to comment on with limited info.
__________________
If I havn't done it already, then i'm gunna do it today.
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#3
08-12-2005, 23:35
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Hi There - thnxs for reply.
Where do you reckon location location is in Patong? Thnxs Jeannie.
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#5
09-12-2005, 01:34
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walking distance bangla and the beach like tarzan said.
and good filling during the year, not only high season, guest friendly. prize/quality must be good.if possible a swimmingpool
__________________
 I am soon in a bar near u  lock up your daughters i have no more   
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#6
09-12-2005, 01:42
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Depends on what terms you can get the hotel.
No doubt they will be asking for some sort of key-money, or take-over money. Generally these tend to be higher than any sort of income you can realistically support from the going concern. Why are they looking for someone to take over, If your going to be managing it for them for a salary, thats fine. Thais tend to be VERY optimistic in terms of the value of what they have, For instance the Shophouse I rent, the next door neighbour wanted 50% more to rent her place per month and its also up for sale for 6.5 million baht+. I pay 15,000 baht a month for rent, on a 5 year fixed rate contract. Personally I think you would be better off buying a place and creating a hotel/guesthouse.
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#7
09-12-2005, 05:45
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When I look at every B&B and guesthouse that has been on the market, when you break down the costs, like nightly income per room per night, just to cover lease and monthly rent, there is no way I can see how anyone makes a go of it.
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#8
09-12-2005, 18:48
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Probably becuase they all factor in the capital growth / rising value and assume that it can continue to double every few years..
Looking at tommorows price instead of yesterdays when they create a lease..
__________________
Men have only 2 emotional states, hungry and horny.. So ladies, if you see me without an erection, make me a sandwich.
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#9
09-12-2005, 20:07
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Quote:
There have been several threads on here recently about guys managing to get flights but no room at the inn! Nowhere to stay, especially in the bigger and more internet advertised hotels and guesthouses! So I am guessing if the place is clean and viable then it would be worth your while at least giving it a go! If you can get all your personal legalities squared away with the authorities, I am guessing your Thai friends will help you in that direction. Get over to Thailand Jeannie. You've travelled a bit, go with an open mind, an open heart and open eyes. Personally, I think you will make your own mind up about this proposition very quickly once you get there. Good luck! 
__________________
The idea is to die young.........as late as possible. 
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#10
09-12-2005, 21:54
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i just think you could make 10% at least on the 700,000 that you would put down for a guesthouse investing that money instead. thats 70,000. doubt youd make that form the guesthouse.
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#11
09-12-2005, 21:58
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Thais certainly have a very funny way of looking at business, I enquired about a shophouse the other day, the guy has two - next to each other in Karon.
To rent either one of them was 200,000 baht a year, If you wanted both of them it was 450,000 baht a year for the two.
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#12
09-12-2005, 21:59
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thats too funny
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#13
10-12-2005, 04:31
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So you rented them both? 
__________________
I want to die peacefully in my sleep like my Granddad Not screaming in fear like his passengers
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#14
17-12-2005, 23:51
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Thnxs for your opinions - they have been helpful. How is it for a Farang to buy over there - not rent? I would not rent anywhere - if I cannot own - I don't go with it. I am aware of the 49% rule etc - but have been informed that there are secure ways around that problem. Buy through a legitimate registered Company etc etc. Own the Shares etc? 2 Companies one in possession of the Chorante for Land the other for the building etc. Can it be done or is that just all 'BS' for a potential Buyer??? Hope to hear. Happy Xmas everyone - Jeannie.
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#15
17-12-2005, 23:58
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Nope that's how its done Jeannie, need 4 thai directors owning 51%, if you don't know any the solicitor will get 4 at a cost of 2,500bht, she draws up paperwork so they sign all their rights and liabilities away. You can find details on most of the websites offering Thai property or thai solicitor sites, sorry as usual can't give you a link but if you just google search they will come!
__________________
If I havn't done it already, then i'm gunna do it today.
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#16
18-12-2005, 00:10
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Hi Jeannie,
I was just thinking about you today and how we hadn't heard back from you. Looks like you have been doing your homework which is essential and what I am doing right now while I am able to earn good money here. Good to know the forum has been useful. I do wish you luck and if you do go ahead with your plans keep me in mind as I will be needing somewhere clean, cheap and cheerful for while until Dodger builds my house for me! Tch!  Keep us posted with any progress and Joyeux Noel from Baghdad Jeannie. 
__________________
The idea is to die young.........as late as possible.
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#17
18-12-2005, 05:54
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You should really be seeking legal advise from a lawyer familiar with Thai law.
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#18
18-12-2005, 18:09
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There are ways to get around the law but remember this is Thailand and if you are pulling tricks to get around a law do not be surprised if further down the line the Thais 'reinterpret' the rules to hold fast to the spiriit of the law.. For example the company ownership you list above is a very common way people use however there are specific words in the legislature that a company cannot be set up purely for the purposes of allowing foriegn land ownership.. Currently these words are ignored, no one can say that they will always be ignored. I have also been told that it is far safer to have a company with only 35% or less farang owned shares (makes no difference you can own 10% of the shares but hold the only voting shares and still have 100% control) to stay lower on the radar. Also what is the company doing ?? The company should be actively traded and used not just a holding company / shield. Many people dont do anything with thier company and thats a further thing that may come into the assessment. For me I go by the addage never bring into Thailand more than you are prepared to walk away from.. Thaland is just too fluid and I dont consider it as safe and investment as real estate normally is.. You also say you would never rent... Sounds like the mindset of someone who has just watched a 15 year property boom (thats reached its end).. Consider my villa.. I rent this place for approx 3% of the propertys actual value, and from that 3% the owner must maintain the place and provide all service that entails.. Horrible return on his money I made 20% last month leaving mine outside Thailand..
__________________
Men have only 2 emotional states, hungry and horny.. So ladies, if you see me without an erection, make me a sandwich.
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#19
19-12-2005, 01:23
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All right where you getting 20% 
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#20
19-12-2005, 08:14
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As I have said lots of times I have gone very heavy on mining and exploration shares in companies that have not sold out thier forward hedge book for gold and silver..
Took some very big positions earlier this year and then made some of the biggest bets of my life in Oct with a heavier bias around silver than gold (unusual for me as I had been biasing to gold).. To say those bets have paid off would be a major understatement.. Just look at the gold price charts and then remember that the mining shares are higher leveraged than the metals prices and you will get a good idea of how the returns have been.. Personally I believe that we are heading into a perfect storm of high inflation, dollar crash, housing crash, collapsing consumer spending.. Something that may even be similar to the great depression in its severity, I think the fiscal irresponsibility of the money printing press that is the Fed pumping billions into the market creating asset bubbles in equity and real estate (that has been withdrawn and spent and sent overseas into deficits that have to be paid back) has laid that trap and dont see a way out.. Hard assets like silver and gold will shock everyone over the next 5 years.. All the data is there but very few people are reading the writing on the wall.. May we live in interesting times..
__________________
Men have only 2 emotional states, hungry and horny.. So ladies, if you see me without an erection, make me a sandwich.
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#21
19-12-2005, 21:12
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Hi,
It is not so much looking for a Capital Gain - it is just that to me a 'Landlord' represents another layer of hassle that I prefer to avoid. In fact my main worry at the moment is the point made by LivinLos ref a possible worldwide 'recession'. Jeannie
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#22
19-12-2005, 21:20
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Well to me a Landlord that takes care of water problems, electric problems, gardeners, house and pool maintenance, etc etc etc is all stuff I dont have to worry about..
Plus I recognize that this is a developing or 3rd world country and things change.. How many years since a coup ?? What would happen if a bomb ever did go off ?? What would be my position if the nightlife and party factor of town was regulated away ?? Etc. I enjoy living here now but the freedom to pack my bag and walk if I ever decide to is pretty good...
__________________
Men have only 2 emotional states, hungry and horny.. So ladies, if you see me without an erection, make me a sandwich.
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#23
20-12-2005, 04:42
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I think thats a bloody good point. I would even consider going back there to live, but would never establish myself like I did last time.
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#24
20-12-2005, 05:44
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