Thread: 3+3 lease

I am considering purchasing a established business here in thailand. The business property is not freehold. My understanding is landlords use a 3 year term to avoid registration with the land office.

My questions are how strong are these leases?

Are the terms for years 4-6 usually pre-argreed?

Leases without registration at the landoffice are officiall not valid.

My experience is that Thai landlords prefer 1-2 yr leases.
-After 1-2 year the landlord can increase the leaseprice big time.

When your landlord regiser at the landoffice, tax have to be paid.
Yearly +/- 2x the montly rent, by he landlord,he will pass that on to you for sure.

if the business becomes a success he will raise then rent and hijack the business and squeeze you out

Originally Posted by chingching

if the business becomes a success he will raise then rent and hijack the business and squeeze you out

Thank you but i dont really need conjecture.

you asked for input..you have recieved it...conjecture or otherwise, heed the words, good luck

Not conjecture, but true possibility that will likely happen. You say you want to buy a business in Thailand? How long have you lived in Thailand and how much do you know about owning a business?

Personally, I would never own a business in Thailand. Having owned three in the US, it has always been a temptation but the odds are definately not with you. If you are successful, like already stated, you will be run out one way or another. Either the BIB will ask for lots of money, the locals will start exactly the same business right next to you or your landlord will jack prices to the point of not allowing you to make a profit.

You have to be Chinese to have a successful business in Thailand. Not conhecture, but fact.

Originally Posted by yankee99

Originally Posted by chingching

if the business becomes a success he will raise then rent and hijack the business and squeeze you out

Thank you but i dont really need conjecture.

Only a Douchbag would purchase such a business.

The only question is, are you that Douchbag?

Always those that think they know it all and end up flat on their arse.

Anyone with any sense at all knows if a business is making money, it is never, never, never sold in Thailand.

But always those foolish enough to buy businesses with grandiose ideas of earning a huge income to live in Thailand.

This is as far from the truth as it gets.

When they see you as a foreigner owner of the business, the Thai's will open up the same exact business right across the street and charge 1/2 as much.

There is more to business in Thailand than any sane person can reasonable understand.

1. There has to be a need that Thai people can afford
2. There has to be a service NO ONE else can provide

# 1 the big problem is the profit margin earned from things Thai people can afford, you would realistically have to have 1,000+ customers a day to make enough money for a westerner to live on

Tourist related business ideas, well we all see what is happening to the Russian owned businesses now in Phuket?

Bet they never ever planned for the Thai people uprising and wanting to kick the foreigners out of Thailand, but that is exactly what happened and now the businesses are all closed.

If you think anyone will be happy if you start making money, you haven't been in Thailand long enough

Most can't seem to do simple math(s).

Rent + utilities + any staff costs = break even
(this is simple and of course there are more costs than this - but for sake of argument let's say just this)

Let's say you open a stall to sell T-shirts and your 'tilac' will sit there all day trying to sell them. You buy the t-shirts for 39 baht each and try to sell them for double, so let's say 79 baht each. Monthly rent of 10,000 baht and 1,000 for electricity = 11,000/mo divide by 30 days = 367 baht per day. You must sell 10 t-shirts to cover the costs. If you sell a further 20 t-shirts you'll have earned the princely profit of 780 baht. If you share that evenly with tilac you'll have pocketed the grand sum of 390 Baht - or slightly more than the daily minimum wage. Can you sell more than 30 t-shirts a day?

Originally Posted by Tom Sawyer

Most can't seem to do simple math(s).

Rent + utilities + any staff costs = break even
(this is simple and of course there are more costs than this - but for sake of argument let's say just this)

Let's say you open a stall to sell T-shirts and your 'tilac' will sit there all day trying to sell them. You buy the t-shirts for 39 baht each and try to sell them for double, so let's say 79 baht each. Monthly rent of 10,000 baht and 1,000 for electricity = 11,000/mo divide by 30 days = 367 baht per day. You must sell 10 t-shirts to cover the costs. If you sell a further 20 t-shirts you'll have earned the princely profit of 780 baht. If you share that evenly with tilac you'll have pocketed the grand sum of 390 Baht - or slightly more than the daily minimum wage. Can you sell more than 30 t-shirts a day?

Oddly enough a mate did just that.
Selling at 150 baht though.
Did ok.
Good pitch outside Tescos in Ban Phe... 5000 a month.

Originally Posted by rickschoppers

Not conjecture, but true possibility that will likely happen. You say you want to buy a business in Thailand? How long have you lived in Thailand and how much do you know about owning a business?

Personally, I would never own a business in Thailand. Having owned three in the US, it has always been a temptation but the odds are definately not with you. If you are successful, like already stated, you will be run out one way or another. Either the BIB will ask for lots of money, the locals will start exactly the same business right next to you or your landlord will jack prices to the point of not allowing you to make a profit.

You have to be Chinese to have a successful business in Thailand. Not conhecture, but fact.

Yes conjecture. I am not asking if buying a business is a good idea. I am not concerned if another business opens next door. Etc etc.

These are all the same problems i had in business in the USA. I only want to know if anyone has first hand experience with a 3+3 lease. I do appreciate the warning and i am aware of the risks.

Originally Posted by chingching

if the business becomes a success he will raise then rent and hijack the business and squeeze you out

Landlords do this all over the world why would Thailand be different?

Originally Posted by Lorenzo

Originally Posted by yankee99

Originally Posted by chingching

if the business becomes a success he will raise then rent and hijack the business and squeeze you out

Thank you but i dont really need conjecture.

Only a Douchbag would purchase such a business.

The only question is, are you that Douchbag?

Yes i am if that's what it takes.

Originally Posted by liveinlos

Always those that think they know it all and end up flat on their arse.

why do presume i know it all?

Anyone with any sense at all knows if a business is making money, it is never, never, never sold in Thailand.

So you are saying every business ever sold in thailand is a loser? No one sell for a profit? No one sells because of death? No one sells for health reasons? No one sells to retire?

But always those foolish enough to buy businesses with grandiose ideas of earning a huge income to live in Thailand.

This is as far from the truth as it gets.

I guess every business in thailand is failing.

When they see you as a foreigner owner of the business, the Thai's will open up the same exact business right across the street and charge 1/2 as much.
No better place to open a restaurant then the mall food court.Did you ever notice when Mcdonalds opens BK and kfc are on the other corners? I think thats a good thing.
There is more to business in Thailand than any sane person can reasonable understand.

1. There has to be a need that Thai people can afford
2. There has to be a service NO ONE else can provide

# 1 the big problem is the profit margin earned from things Thai people can afford, you would realistically have to have 1,000+ customers a day to make enough money for a westerner to live on

Why do you think i need 1000 thai customers? How about 100 falang spending 300 baht.

Tourist related business ideas, well we all see what is happening to the Russian owned businesses now in Phuket?

Bet they never ever planned for the Thai people uprising and wanting to kick the foreigners out of Thailand, but that is exactly what happened and now the businesses are all closed.

If you think anyone will be happy if you start making money, you haven't been in Thailand long enough

if you any info on a 3+3 i would love to read it.

Originally Posted by Tom Sawyer

Most can't seem to do simple math(s).

Rent + utilities + any staff costs = break even
(this is simple and of course there are more costs than this - but for sake of argument let's say just this)

Let's say you open a stall to sell T-shirts and your 'tilac' will sit there all day trying to sell them. You buy the t-shirts for 39 baht each and try to sell them for double, so let's say 79 baht each. Monthly rent of 10,000 baht and 1,000 for electricity = 11,000/mo divide by 30 days = 367 baht per day. You must sell 10 t-shirts to cover the costs. If you sell a further 20 t-shirts you'll have earned the princely profit of 780 baht. If you share that evenly with tilac you'll have pocketed the grand sum of 390 Baht - or slightly more than the daily minimum wage. Can you sell more than 30 t-shirts a day?

Lets say the business averages 150 customers a day averaging 300baht = 45000 this is sales of 1,350,000 a month plus room rent income of 80,000 (per month). for a total of 1430000 = 17,160,000 a year. Now rent 80,000 x 12 = 960,000 salary 15 at 12,000= 180,000 = 2,160,000 a year. Supplies 6,864,000. Some other small expenses (utilities license and others)not worth writing. You can do the math...

Of course i am not selling t-shirts and dont know that business

Originally Posted by liveinlos

There is more to business in Thailand than any sane person can reasonable understand.

1. There has to be a need that Thai people can afford
2. There has to be a service NO ONE else can provide

Not so, at least for number 1, if it's something like out-sourcing or factory for export. Number 2 is important, you need to make yourself as the falang, indespensible. Then sit back and laugh as they try and fail to copy you.

Originally Posted by Smug Farang Bore

Well the Thais don't exactly play Marquis of Queensury when it comes to business

Even if you've had success elsewhere, things are done different in Thailand.

"the Thai way"

As was pointed out, if you make a success they will want a slice n if you don't they will leave you alone happy with the rent you pay.

Many things will effect the answer to your question ie location, amount of money involved, type of business and who ya land lord is.

Taking a business in Bangkok is different to Samui n Sakhon Nakon . . . Well!

I rented in Bangkok for 10 years and they made the rules up as they went along especially when they found out Jonny falang was involved.

As for lawyers involved . . You probably die of old age or go skint before you sort it.

If you get stubborn with them, be sure to check your wiring as fires seem to start easy here - even in the rainy season and look both ways when crossing the road.

Good luck..

I never said the landlord was thai. But since you asked the landlord is not thai or chinese or asian for that matter.

Originally Posted by yankee99

the landlord is not thai or chinese or asian for that matter.

They have foreign landlords in Thailand? Are you sure about this?

Originally Posted by nedwalk

you asked for input..you have recieved it...conjecture or otherwise, heed the words, good luck

wot he said .

^Why not? Many ferangs have property leased or owned by companies and wives? Why not rent it out like hundreds already do in Thailand?

Here's a Thai business: work at the airport for security.

Steal from the baggage and shippers.

Take the stolen goods out and sell off the street or have other family members sell it off for you?

No license required, no over head to speak of and little or no risk involved since you are the law.

Free enterprise at its very best in Thailand.

Originally Posted by 9999

Originally Posted by yankee99

the landlord is not thai or chinese or asian for that matter.

They have foreign landlords in Thailand? Are you sure about this?

pounds to peanuts the trail ends with a Thai , even if the go between isn't .