Shophouse construction costs

[Gerbil]

I'm looking at a project which will involve building 10 two story shophouses (2 rows of 5 back to back).

These are intended for rental (7,000 - 8,000 a month each).

Very basic construction.

each would be 4 meters by 8 meters - downstairs would be open area with a staircase and a Thai style bathroom (under the stairs?), upstairs would be two bedrooms. The roof would be flat concrete slab construction and access to the roof is also needed via an upstairs staircase.

Any idea of very rough construction costs?

[Norton]

Any idea of very rough construction costs?

3.5 million baht.

[dirtydog]

Nearer 4 million I reckon.

[Gerbil]

Oh bugger.

These are real low end units dont forget?

Cant be that expensive to build units which are basically 2 concrete boxes on top of each other?

They dont need to last forever as the master lease on the land will be 30 years. (In fact they could fall down after 20 years or so as far as I'm concerned )

Actually, eventually there would be 80 units in total, I'm just looking at doing it in phases at the moment.

[Chairman Mao]

4 million baht returning just under a million per year. Something doesn't add up. (possibly my maths )

Unfortunately the amount of these rows of town houses that you see abandoned in every town/suburb in Thailand would be a major part of what would put me off such a venture.

[Norton]

You have 64 sq meters/unit times 10 units. 640 sq meters. I used 5,000 baht per square meter which is not hi so construction costs. Do the math.

[Gerbil]

^^ shop houses, not town hoses.

Low rent and a good location. Should be a winner

[chitown]

Unfortunately the amount of these rows of town houses that you see abandoned in every town/suburb in Thailand would be a major part of what would put me off such a venture.

And the fact that they rent for more like 3k to 5k a month.

[dirtydog]

I used 5,000 baht per square meter which is not hi so construction costs.

We aint all in the jungles of Isaan, he has to reckon on 6,000baht per square meter.

[Gerbil]

You have 64 sq meters/unit times 10 units. 640 sq meters. I used 5,000 baht per square meter which is not hi so construction costs. Do the math.

Wouldn't that be more for residential construction costs though e.g. tiled floors, suspended ceiling, etc? I'm not planning for any of those luxuries

[Gerbil]

I used 5,000 baht per square meter which is not hi so construction costs.

We aint all in the jungles of Isaan, he has to reckon on 6,000baht per square meter.

Uhm. Yeah, forgot to mention area - This is in the Rangsit area, but out towards the ring road.

[Norton]

We aint all in the jungles of Isaan

Oh yeah, there is that complication. Ok 6,000 baht plus 10% for the BiB to protect it from "vandals".

4.2 million baht it is then.

[Gerbil]

Hmmmm.... back to the spreadsheet.

[Norton]

Or back to work.

[Gerbil]

Or back to work.

yeah.

returns still look pretty healthy though.

[Chairman Mao]

Do completely unfurnished shophouses go for 8k a pop out that way?

Obviously do if you've gotten this far into it.

You're confident that the demand for each one will be constant for the next 20/30 years?

[Norton]

returns still look pretty healthy though.

Could be if you can keep them all rented. Why build 10? Start with 3 and see how well they rent. If they stay fully rented you can add a couple more. If they are a complete flop you haven't invested as much.

[Gerbil]

Do completely unfurnished shophouses go for 8k a pop out that way?

Obviously do if you've gotten this far into it.

According to my wife they do..... But I'm not so sure. I think it may be lower, so I've hacked 40% off in one of my projections.

[Gerbil]

returns still look pretty healthy though.

Could be if you can keep them all rented. Why build 10? Start with 3 and see how well they rent. If they stay fully rented you can add a couple more. If they are a complete flop you haven't invested as much.

I was assuming I could get a better price from the builder when dealing in quantity. Plus it will look more attractive to potential shop owners if there are more of them?

[Chairman Mao]

Interesting stuff.

Norts has some good ideas.

I wouldn't mind throwing some money into something like that sometime. (money that can be lost without too much heartache. )

Ok 6,000 baht plus 10% for the BiB to protect it from "vandals".

This true Norts?

[Gerbil]

You're confident that the demand for each one will be constant for the next 20/30 years?

No. That's why I'm looking for a good return as quick as possible. If necessary I can flog the 'management company' then if I think there'll be a downturn.

[Norton]

This true Norts?

Naw. Just a slap at DD, a Pattaya resident, slagging my "jungle " Isaan location.

[Gerbil]

Anyway, still very speculative at this stage - if I do go ahead with it, there'll be a picture thread.

[jandajoy]

Location, location, location.

I looked at investing in a similar project in Ban Chang a couple of years ago. Fortunately I didn't.

They built a bunch but then potential renters started haggling.

The original asking price of 10,000 a month dropped to 3.

Post construction they were on offer at 2000 bht a month.

[chitown]

Do completely unfurnished shophouses go for 8k a pop out that way?

Obviously do if you've gotten this far into it.

According to my wife they do..... But I'm not so sure. I think it may be lower, so I've hacked 40% off in one of my projections.

Depending on if it is right on the main road or not. What road are you talking about?

I know there are several in my mooban for 3k to 5k. I know you are talking a shop house and not a townhouse although I do not see the difference in them.