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Rental pool in Thailand

What is the difference between a rental pool and a guaranteed income

Property in Thailand is regularly purchased as an investment due to its higher returns compared to Europe. Developers typically partner with world renowned hotel groups such as best western, wyndham group, renaissance, sheraton and mövenpick to ensure consistent occupancy and success for the investor.

Once completed, these hotel chains take over and attract tourists from all over the world. For investors looking to make a profit, there are also additional programs such as a rental pool.

Features of the rental pool program

A rental pool is an agreement that allows property owners to share the same space. Lease payments and all other costs associated with ownership and maintenance are divided between the owner and the management company in a certain ratio.

As a rule, either 80% by 20%, 70% by 30%, or 60% by 40%. In some cases, the management company may receive an increased share of the profits if a profit sharing scheme is chosen rather than revenue sharing. This means that after deducting all maintenance, management and marketing costs from the rental income, the owners will receive 60-70% of net income.

High-end projects often require professional hotel operators, who in this case receive 60%. The main thing is that each owner will receive a share of all apartments in his pool, regardless of area or type.

Key differences between a rental pool and a guaranteed income?

When investing in real estate, there is an alternative option - the Guaranteed Income Program. Some developers offer both alternatives at the same time. Between them there are two main ones:

  • The income in the rental pool fluctuates depending on whether the apartment is rented out or not. With an income guarantee, owners receive a fixed interest rate specified in the contract—usually 5–10% per annum of the value of the property—regardless of whether the property was occupied or not during that year.
  • The duration of payments from rental pools is usually longer - up to 15 years, while with guaranteed income it is usually only 3-5 years.