Leasing Property and Land on Koh Chang

How to buy land/property (Koh Chang specific)

How to lease land/property ( Koh Chang specific)

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How to lease real estate on Koh Chang

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Contract specifics

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Leasing, which requires a far smaller initial outlay, plus is possible for a foreigner to easily do, is unsurprisingly the most popular way to get a new small business or resort established.

For anyone looking to start a small business on the island a good location is essential. It's very common to see small restaurants and bars open only to fade away and shut up shop within a matter of months.

Don't let this happen to you. Firstly, think long term. Don't expect an immediate return on your investment. This isn't a get rich quick island. It's not as commercialised as far busier tourist destinations such as Pattaya, Phuket, Samui and so on, where prime location isn't as important as there is plenty of foot traffic for everyone on all the main beaches to benefit from. Speak to locals, or expats who’ve been here a couple of years, ask about the changes they’ve seen in a comparatively short time. Shop units or plots of land that, 2 or 3 years ago, may have seemed in a poor location, on the fringes of a shopping area are now in the centre of developed areas. Not good, if you happen to enjoy peace and quiet but great if you’re running a business there.

Think carefully about the type of business you want to set up and don't automatically assume it has to be a bar, restaurant or tour agency. There are already plenty of these and many don’t last a year. Try something different, find a niche that will expand as the number of visitors, and consequently the number of people permanently based on the island, increases.

Four potential money spinners that currently don’t exist on Koh Chang:

· A language school specializing in training hotel/restaurant staff;

· A driving range;

· A small tennis centre, as hotels have courts;

· A classy, romantic restaurant in peaceful, natural surroundings.

Costs

The cost of leasing land or shop units decreases the further south you head down the west coast. On Whitesands you'll be lucky to find anything other than a basic shop unit with no living quarters or toilet for under 100,000 baht/year. Plus contracts may well be year on year. You’ll get foot traffic, but a 12-month rental isn’t much use if you’re planning mid or long-term and want some security of tenure.

Heading down to Klong Prao, you'll find a couple of shopping plaza's with shop units for rent from a few thousand baht/month. These plazas are a good bet for the future but right now the few businesses that have set up shop are rarely busy. Visitors tend to congregate roadside and don’t venture into the heart of the plaza unless they see something appealing. Unfortunately, it’s a ‘Catch-22’ situation, tourists like to shop in busy plazas, however to attract businesses and shops the plaza needs to be busy to appeal to renters. However, plazas are very good locations for small office based businesses or enterprises that aren’t dependent solely on walk-in customers. Traffic through V.J. Plaza will increase following completion of the island’s first apartment complex at the rear of the plaza by the end of 2005.

In Kai Bae there are also a couple of new plazas, it's still too early to tell which will be the busier as, in late May 2005, one is still under construction and the other has only recently been completed. Annual rent for units will be around the 80,000 baht/year mark.

Regarding land, it's now virtually impossible to find land to lease by the beach. This had led to a large number of roadside resorts springing up, some good, some bad, some just plain awful. But unless you have something unique to offer, tourists are always going to prefer to stay or eat by the beach.

In Kai Bae a very small plot of land in the centre of the village goes for around 80,000 -150,000 baht. Compare this to renting a rai of land roadside in Bailan - a much quieter area further south, where a one rai plot can be rented for as little as 50,000 baht/year - with a 9 year contract.

Obviously, if you're renting land you'll be looking for a contract with as long a term lease as is possible. Most landlords are reluctant to offer anything longer than a 9 year contract. However, under Thai law a 3 year contract is the longest that can be signed without being notorised by the Land Office.

If you see businesses e.g. bars, internet cafes etc for lease or small resorts to lease, do the math first, taking care to factor in location, the length of the tourist season, staff costs etc. Sky high key money is often demanded, by owners eager to recoup losses, in addition to the annual rent and it’s very rare for small businesses to keep accurate books that truly reflect income.

Continue reading Contract specifics.