There is no doubt that the time for illegal practices in the Kingdom are being brought to account, and now it is the turn of illegal accommodation and the platforms that promote and facilitate such activities.
According to Flat Monthly CEO Michael Hogg “It is not surprising that the government is cracking down on booking platforms like Airbnb, it was really just a matter of time. We recognized that eventually there would be a clamp down and that was the reason that we launched Flat Monthly earlier this year. Our PropTech start up focuses on offering only monthly rental accommodation solutions, in a digital online manner, within the legal framework of the regulations.”
There is no doubt the increase in tourism, short term business assignments, medical tourism and sun seeking longer stay tourism is driving demand for condo style accommodation. Unfortunately the market has not been able to provide an efficient and legal solution, until the launch of Flat Monthly.
There are an estimated 60,000 vacant condominiums in Bangkok alone, so landlords are in a real dilemma as to what to do. They cannot find long term tenants, because of oversupply, but they cannot sell on a nightly basis because it is illegal. The solution developed by Flat Monthly, is essentially to create virtual serviced apartments, where accommodation is sold online like Airbnb or Booking.com, but the rental terms is a minimum of one month, often combined with services like cleaning, wifi, etc.
Hogg added that, “It is taking time to educate landlords and investors that they need to be looking for alternative solutions that take advantage of technology platforms and digital marketing, but are also legal. The rental real estate market is extremely fragmented, and unprofessionally managed, making the experience a headache for both landlords and tenants.
So, it is no wonder that these online platforms, although declared illegal, have been success” adding that “Flat Monthly have developed a solution to address this pain point for all parties, that is both legal and fully leverages technology and digital channels. The company provides a total “Serviced Living” solution including a virtual concierge (called “Howie”) and on demand services for cleaning and repairs services etc.”
Many overseas investors have purchased property on the basis that there would be a steady income stream from rentals, but few have been about to experience this outcome. Often properties are sold with the expectation that investors can make a 5-7% yield. However, what investors fail to see is that the yield is only achieved when the property is occupied. In most cases, condominiums remain empty for years, due to oversupply and poor sales & marketing. The real yield is actually 0%. This oversupply situation, underperforming real estate agent market and lack of marketing channels, has left many overseas and local investors in a desperate situation. “Our hope is that Flat Monthly can rescue these investments for the owners, and provide consistent 6-8% yields on their properties that is legal and an enjoyable experience for them.” said Hogg.