Factoring in Thailand

 

One of the most difficult aspects of living in Thailand and trying to run a business is dealing with banks. The language of financial transaction is not always easy to understand in a second language. The cultural nuances of interaction within the formal setting of a bank can be hard to discern. You can quite easily leave your bank in Thailand, not quite understanding what has been said and agreed.

This is where some assistance from a Thai person can be helpful. Patience is a must. However, if you are in urgent need of cash to fund working capital for your business the delays caused by persuading a Thai bank to loan you some money can be frustrating.

One solution is to use a factoring firm in Thailand. Thailand has a strong regulatory system in place to deal with debt, risk management, securitisation and accounts receivable factoring. There are now a growing number of Thai firms offering factoring, reverse factoring and supply chain finance.

Factoring is where a company sells its unpaid invoices to a factoring firm. They will advance between 75% and 90% of the cash immediately to the company account. Once an unpaid invoice has reached its maturity date, the sum involved is paid by the debtor straight to the factoring firm. They take out their original remittance and their fee (usually about 3%) and send the remaining sum to their client.

The benefits of invoice factoring are obvious. Accounts receivable form the collateral for the cash advance, so equipment and property are not risked in the event of a debtor not paying. With non-recourse factoring the factoring company will take on the legal responsibility of recovering debt.

Another advantage with factoring, is that a factoring facility comes with credit control. This means they will analyse your customers and their paying habits. They will flag potential invoices that they suspect might be risky. Credit control effectively manages risk and helps a company avoid funding shortfalls.

A factoring firm in Thailand is very different to obtuse banks. They can quickly approve a factoring facility and make a payment. Factoring firms are customer facing rather than banks that are focussed on regulatory and procedural issues.

Factoring in Construction

I haven’t encountered anyone who has used factoring to pay building contractors in Thailand. This will no doubt be because I mostly encounter people building residential property rather than commercial property. However, the law allows for factoring in construction.

To factor a construction project a team of specialists is needed to check every stage of a construction – completing the foundations, completing the ground level and putting the roof on. Once a stage has cleared all its snags then money can be released to suppliers and contractors using reverse factoring. In reverse factoring it is the buyer that initiates factoring in order to facilitate fast payments to suppliers. This is a vital financial tool in improving supply chains. Cash is quickly released into the supply chain to make sure deliveries happen on time, and no individual business is hit with liquidity issues.

Construction is a key part of growing Thailand’s economy. New hotels provide new income. As cities expand and the middle class grow new housing is needed. Rural areas in Thailand need better infrastructure to connect with the growing economy.

All this points to the growing adoption of factoring practices in Thailand, especially in logistics and construction.

Re-Purposing Property in Thailand

Thai law is a minefield. It is not consistently applied and in many cases foreigners are allowed to have de facto ownership of land and property, especially if they have a Thai partner. Despite strict and xenophobic laws regarding land ownership the Thai way is not to mount witch hunts against groups in society.

Part of the reason for this is the common Thai belief in 'live and let live'. While many Thais may harbour nationalistic notions about Thailand being for the Thais they tend to shy away from individual acts of revenge; rather they bow to hierarchy and follow the line of headmen and other influential local people.

Another reason for this turning a blind eye attitude is the lack of clear lines of power in Thailand. Outside of Bangkok are fiefdoms focussed around policing and other areas where 'tea money' and personal influence are important. Regimes change in Bangkok, new regulations are made and the memos are not passed on; or if they are then they are ignored. A clear example of this are visa laws. They change and often the changes are not reflected on the ground. The recent fiasco with 10 year visas is an example in point.

The point of this digression is that you if you are considering re-purposing your property in a rural area of Thailand you don't necessarily have to apply for planning permission at the land office. Putting feelers out in the local community is a good idea, though. You see dozens of 'hotels' on Agoda that were clearly once residential villas designed as a place to live, not as a business. They have become spas, yoga centres, retreats, diving accommodation and even backpacker hostels. There seems to be an acceptance with re-purposing private property in Thailand.

And it makes sense from a utility point of view. The jungle takes its toll on villas. The wood gets attacked by insects, the ground shifts, building faults appear, rats come etc. The best way to keep a property well maintained is to use it.

Recent trends in tourism show a growing interest in 'activity-based' holidays. People want to go to the jungle or the beach and ride mountain bikes, qualify as a scuba diver, get a teaching certificate in yoga, detox. The list goes on. English teaching, learning Thai. Mastering kite boarding. Working out in a Muay Thai gym. It is a big part of the Thai tourist economy.

Places like Sri Thanu in Koh Phangan have re-branded themselves as yoga centres par excellence. Several unused bungalows, guest houses and private villas in the area have now managed to tap into this income stream by re-inventing themselves as dorms, yoga studios, cafes, luxury accommodation that comes with a yoga package.

Especially if the changes to the property are superficial. If just a change of furniture and decor is needed then why not go for it? You might have on your hands a business with a reasonable rate of return; you might interest buyers; you might discover that also really love yoga or mountain biking. Finally it should be mentioned that people are prepared to pay more for niche activities and often want packages and turn-key holidays so that they can totally immerse themselves in their holiday mission.

Property Sales and Travel Infrastructure in Thailand

There are two types of buyer in Thailand, as elsewhere in the world. There are those who look for value and want to fix up a place to sell for a profit; and those who want a ready-made proposition for either personal use or for commercial use. The returns are lower normally in the second category but the thinking is that the risk is also smaller.

This can all be a matter of perception. And indeed, con artists will work hard to influence perceptions in their favour. With risk it is believed comes greater rewards.

The same division can be seen at work in terms of small businesses, especially in limited commercial spheres like the Thai islands where space is limited and the distance from Bangkok is a key factor in planning holidays for many people. In these places a pioneer will try something new like a raw food cafe or a silent disco bar. The locals shake their heads until one of these ideas results in a successful business. The imitators soon follow.

When selling a property in Thailand one way of balancing the risk factor of relying on leases, shell companies or compliant Thai front people is to stress the benefits of the locale. One of the main things that people looking to buy a villa in Thailand look at is travel infrastructure. For short term rental tourists need easy access to a residential property, especially from Bangkok.

This has been one of the reasons for the success of places such as Koh Samui and Phuket - they have easy access to an airport. While tourists can tolerate long distance flights to Thailand, they get more frustrated with travel the closer they get to the holiday property. If the last leg drags people perceive a place as 'in the middle of nowhere'.

As well as being able to mention that a property is close to an airport it is also important to mention the proximity to the nearest rail line.Thailand trains are reliable, cheap and cover the north to the south of the country. There is also a line going east-west linking Bangkok to the border town of Aranyaprathet next to Cambodia.

New stations, line extensions and new lines are all being planned. Thailand train travel has great potential. It opens up not just Thailand but is on the verge of linking up Thailand to Cambodia and to the rest of South East Asia. It is an exciting time for rail enthusiasts. It is now possible to book many of the train journeys in Thailand  and beyond online. This is another convenience that goes a long way to mitigating the hassle of long legs to a journey.

The same goes for ferry trips. Many of the main ferries from the mainland to the southern islands of Koh Samui, Koh Phangan and Koh Tao are now possible to book online.

As you can see the national travel network in Thailand is a major asset for Thai tourism. It encourages visitors to venture to the far flung parts of the country and even enjoy the trips. It helps tourists get to their final destination quicker. In short it helps rent and sell properties in Thailand just as being near a BTS stop helps when renting out a Sukhumvit apartment.

The Value of Beach Land

Before discussing the value of property and land in Thailand the reader should be reminded that in Thai law a foreigner can own a property but not the land on which it sits. The usual recourse around this legal nonsense is to allow foreigners to take out 30 year leases on land.

Does this mean that after 30 years the foreigner effectively loses the right to use a piece of land on which his or her property resides? Well, many developers put in clauses in their sales contract promising that another 30 year lease will be granted for a small fee. This is dependent on the owner of the land honouring their legal agreement to appear down the land office and register another 30 year lease.

Whether land is located on or next to a beach or in a city or rural location should not make any difference to this legal arrangement. An important proviso is that rural land is off limits to foreigners unless the land is bought in the name of a Thai wife.

However, in terms of tourism beachfront land is the easiest to sell. Tourists want to be as close to the sea as possible. Moreover, beachfront restaurants and resorts on average do much better than similar businesses set back from the beach.

It is possible to find beach land available to rent. Often there is a shell business already on location with the option to carry on this business or to try something else. There is an issue of knocking down structures on a rented piece of land.

From the perspective of global warming, there is the ever-increasing risk of rising water levels removing beach and the subsequent threat of structures getting flooded in the rainy season.

Another issue with beachfront land is that it was traditionally viewed by Thais as less valuable than land inland where the farming possibilities are better. For this reason, beachfront land was often left  in inheritance to second children and daughters. Dealing with Thais with smaller inheritances who might be looking for higher returns to make up for a shortfall in income increases the temptation for double dealing.

Finally, Thai developers are often on the lookout for the next big location in tourism. The strategy is to identify a beach popular with backpackers where land can be had for relatively cheap prices and then to construct luxury hotels that massively increase room rental prices. This is a strategy not open to foreigners unless they are well-connected in Thai society.

Even then possible sites for such a plan such as Bottle Beach on Phangan Island require the acquiescence of land owners. In the case of Bottle Beach they are holding out either because they want to protect their beach or because they are expecting a big pay day in the future.

Living the Dream in Thailand

Despite all the uncertainty about the body politic in Thailand, much of it connected to two men – Thaksin and his Royal Highness – foreigners still continue to flock to Thailand looking to live out their dreams. Thailand is a place where the sun nearly always shines, where there are superb beaches, great dining options and the local culture encourages people to take it easy.

While those looking to escape the rat race may be enticed by the laid back attitude prevalent among Thais they should look a bit deeper into Thai culture. For every success story of a foreigner setting up a bar, resort, villa or shop in Thailand there are a hundred sad stories. The temptation for people in the UK and elsewhere in the developed world is to cash out – to sell the house or business, take out the pension and move to Thailand to spend the rest of their life in the sunshine.

When you look at prices for renting a business in Thailand or buying land it all seems very doable. There are plenty of middle men in Thailand prepared to act as go-betweens to sort out the legal requirements and the visa. There are thousands of potential customers in the form of holiday makers, ex-pats and wealthy Thais from whom a self-sustaining lifestyle can be made. What can go wrong?

 Plenty.

Firstly, the situation with visas is a moveable feast in Thailand. Every change in government or regime in Thailand comes with its own brand of nonsense to publish on the matter. The latest bunch has cracked down hard (supposedly) on English teachers and dive instructors working in the Kingdom on tourist visas. Other administrations have made noises about stopping the loophole of Thai registered businesses with foreign shareholders buying land in Thailand.

 Foreigners have to continually jump through hoops to extend their resident visas for Thailand. Only those working for big corporations don’t have these headaches. Typically you have to leave the country regularly to renew a visa; have to show evidence of funds in Thailand and have to deal with Thai bureaucrats and immigration officers as well as bank staff who all seem to have their own interpretations of the rules. Some of them seem to just hate foreigners.

Further scratching beneath the surface reveals a Thai attitude that can be best summarised as ‘wait and let them leave’. Many Thais will sign a lease for however many years with the expectation that sooner or later the foreigner will run out of money or enthusiasm and they will be left with land or business unit they can lease out again. If on the rare chance the foreigner does succeed there is always the possibility of not renewing a lease and taking over a ready-made successful enterprise.

For example the bars on Haad Rin’s Full Moon Party beach change management every few years as foreigners realise they are not living the dream. The monthly windfall is taken away by the Thai landlord. Moreover the bucket shacks between the bars seem to pick up a good percentage of the punter’s booze cash.

Another example out of millions is the Phanganer clothes shop in Thongsala (see above picture). It is up for rent. The brand is established, the location looks good; the shop is smart and new. However, if you check out the www.waybackmachine.org you will discover the place has been up for lease since August 2013. What looks like a steal has not generated much interest.

Thai Forum is littered with villas for sale for bargain prices. The second hand market for villas is bad. Real estate agents make more money selling new builds and off-plan builds. They skewer the market in their favour.

All of this is not to say that the dream of living and working in Thailand is a lie. Plenty of foreigners marry Thais and carve out their little niche. Some do very well running budget Bangkok hotels and ex-pat bars. Some seem happy in the boondocks farming rubber.

What is certain is that you should never rush in. Do due diligence and then do it again. Don’t forget you could just get a cheap villa rental for a year and not commit the bulk of your savings into a lifestyle project that could go horribly wrong.

Registering Right of Access for Land

Many villas and houses in Thailand are on plots surrounded by other plots owned by somebody else. Guaranteeing access to a plot of land is essential to your chances of selling or leasing that plot of land. Much of the time roads between commercial plots become adopted by the government, and by this means the property owners in the area don’t need to worry about access rights or maintenance payments for such things as road repair.

However, in many cases ‘estate’ roads go through other people’s lands. This can lead to legal entanglement especially if neighbours become antagonistic.

Thai property law calls this situation servitude. Owners have a right not only to access their land but also to have facilities such as water pipes. The law stipulates:

Section 1387. An immovable property may be subjected to a servitude by virtue of which the owner of such property is bound, for the benefit of another immovable property, to suffer certain act affecting his property or to refrain from exercising certain rights inherent in his ownership.

In other words, your neighbour cannot close down your access road even if it does go through his or her property.

The time limit for exercising this right is 10 years. If you don’t claim your right of access via a land title within 10 years it may be forfeited.

For more information: www.samuiforsale.com/real-rights/servitudes-easements.html

Thai Property Market Shows Growth for 2014

Business analysts such as CBRE and The Real Estate Information Center (REIC) claim the Thai property market is showing growth at the moment.  The REIC predict the property sector will grow 5% to 10% in 2014 (http://www.thailand-property.com/news/view/thai_property_market_to_see_up_to_10_growth_in_2014). Although analysts point to increased demand and a general upswing in the USA and UK economies, it is worth noting that the healthy property market portrayed is somewhat misleading.

The news of the 2 trillion Baht government investment plan for infrastructure in Thailand is central to the confidence displayed in the Thai property market. It looks like a lot of this money will go into the expansion of the BTR or Skytrain. As a consequence there is a high demand for property near the new proposed BTR stops. Buying to let in Bangkok has been a solid performer bringing in returns of 10%. For those with excess cash and an eye for an investment Bangkok remains an attractive proposition. Thai condominium laws mean that foreigners can buy a freehold. There are, of course, others legal structures to gain ownership of a property as a foreigner.

As with the UK housing market, figures for the industry are skewed by the capital effect. Because property prices rise in the capital the increases (in London over £1,000 a month) bring up the averages for the country as a whole. However, if you are selling a property in Udon Thani or Hull then you might not find you can make a good return on your initial investment.

The problem of reporting is systemic. The people who tend to comment on the building and property markets are those who live by these commercial sectors. It is in their interests to exaggerate and pick facts to create more confidence and more increases. Real estate traders get bigger commissions as they are on percentage payments. Moreover, high confidence means more building works and more employment. The property sector is important in Bangkok as it is in London for many reasons.

In Thailand the underlying problems in the Thai property market remain, although perhaps there is some light at the end of the tunnel.

These problems are:

1)The restrictive ownership laws and the obtuse and restrictive visa laws for non-Thais
2) The massive financial crash of 2008 and its continuing repercussions of spiralling out of control national debts
3)The on-going political violence and uncertainty in Thailand which has a strong impact on foreign investment and tourism

Just these 3 issues should make sellers and buyers of Thai property realise that value is key and that it is not the place to make a quick buck, unless that is unless you want to buy to let a flat near a Skytrain stop.  

Making Customers Happy by Giving Less Choice

One of the easiest ways to insure success in the villa rental business is to make your customers so happy that they return again and again. In this way one success echoes on and on and brings in a regular income.

It is a complex mix of things that make people like or dislike a villa in Thailand – the location, the beach, the nearby facilities and amenities, the weather, the prices are just a few of the variables that affect people’s perception of a holiday destination and a holiday rental.

The thing to remember as the owner of the Thai property for rent is that you know better than your prospective guests what will make their holiday a memorable one. You know better than them what is important and what is not.

It is for this reason that I entitled this piece ‘making customers happy by giving them less choice’. Often the temptation is to focus on giving value for money by offering a cheap price for a ‘bare bones’ rental. The thinking is that the renter can opt to pay for services that they value, and that will enhance their enjoyment of the holiday by making good choices.

This is frequently a mistaken modus operandi because often the renter is new to the area and to villa rental. They might not realize that it is going to be much more convenient to have maid service, wifi broadband, shopping service etc. They might shy away from car rental but if your villa is a hot walk from the beach then the answer is to include either vehicle hire in the rental package or a taxi service. You can build these expenses into the rental cost. The customer will never know this; indeed, they will be so busy having a good time that they will not question how the rental fee is broken down.

You don’t have to provide a ‘turn-key’ holiday experience necessarily to make customers happy, but you have to anticipate where they might make bad choices and take those choices away to give yourself the best chance of having a successful rental; a rental so successful that it repeats in the future and makes you good money.

That is what I mean by saying that less choice can be a better thing. People aren’t going to remember that the villa cost $30 more a night than other comparable places, but they will remember the wonderful home cooked Thai food that they experienced.

Using Social Media to Promote Your Villa in Thailand

2012 saw a massive shake up in the SEO world. The Google Penguin update in April destroyed the livelihoods of millions of internet marketers and supposed SEO experts. The hypocritical American corporate wiped out the little man and handed the first page slots to itself and its corporate buddies. The excuse was the need to improve content from searches. The real reason is that Google hated the fact that people learnt to get on the front page for their particular search terms without paying Google money for adwords. They called this ‘black hat’ promotion.

There are no doubt many Thai villa owners as well as developers and estate agents in Thailand who were doing link exchanges as well as sending links to their sites via article directories and the like who were penalized this year.

To these people I would say there is no way back. There is a lot of rubbish talked about removing all the links (as if that is feasible) and submitting to Google for re-consideration. The chances of this helping are slim. It is a monumental waste of time.

Travel related searches are now dominated by Wikitravel, Agoda and Trip Advisor. They are all big corporate entities that don’t really give local information by local people. They are all about selling hotel rooms or about getting free user generated content that is one sided.

How can you compete?

Well one answer is to boycott Google. Bing and Yahoo are returning much more varied and interesting search results. Persuading people to use these search engines starts with you.

Another option is to start a new site if your site was hit. Google rates new sites with regularly updated content much higher than old sites with ‘too many’ targeted backlinks.

The other option which many people are going for is social media. It is a way to bypass Google and get traffic from referrals. In Brazil more people use Facebook than they do Google.

It is difficult but the way to get social media to work for you is to engage with your audience. To put up snippets that people will react to. As for linking it is different to SEO. It is not reciprocal. Rather the more people and posts and photos you can like or re-tweet or pin the better your chances of being noticed and being drawn into wider social circles that can give exposure to your villa.

Twitter is perhaps the worst of the social media. It is full of people who ‘follow back’. They don’t care about your tweets; they just want to bolster their follower numbers. Twitter streams are full of streams of selfish people not listening to each other. Having 100 followers who are social media marketers is useless – everyone is selling and no one is buying.

Much better is Facebook. It is easy to set up a Facebook page. Often they rank well. They allow a forum for people to post comments, photos and video. It is a genuinely engaging media that keeps people on page and could lead to sales. Communities of travellers meet and their opinions hold weight with their peers.

So if you have a villa you want to rent or sell then set up a Facebook page and start to get your friends to the page. Once you have 30 likes you get stats from FB. These stats aren’t much use but it is the first hurdle and a sign you are heading in the right direction.

Pricing Your Rental Villa

Finding the right price for your villa in Thailand can be a tricky business. There are a number of things to consider: your running costs, your competition, your expected occupancy rate; and, changes in the rental market. Only when you have made an assessment of all these factors can you begin to price your villa correctly. And then, of course, there are seasonal price fluctuations to consider.

If you follow the prices for a successful hotel in Thailand you will shocked to discover just how often they change their prices. You will also be surprised at the lack of transparency when it comes to prices. There are often hidden extras such as tax, transfers, movie channels that don’t appear in the initial price quoted. If you go to booking engines such as Agoda, Booking.com, Trip Advisor etc. you will find a different price on each site. This is partly to do with commissions charged. If you are managing your own villa it can be a real headache dealing with all these prices.

I have found that it is worth trying booking sites but only keep up with 1 or 2 that perform for you. Most don’t produce much.

Running Costs

Here is a check list of running costs that you should consider:

1)    Electricity bill. This is the main bill due to air-con. Many hotels use keycards to stop people leaving the air-con on while they are out. Keep a close eye on your electricity bills when you have guests as this will help you estimate your electricity costs in renting your villa.
2)    Water. Big groups and families can often use a lot of water for showers. Hot water use will also impact on the electricity bill.
3)    Cleaning. If you offer a maid service, laundry service, rubbish removal etc. All these costs need to be factored into your price.
4)    Transfers / Agent fees. Many villas offer free pick up. It is a good idea as that way you don’t lose your customers at the last hurdle. It is also a chance for them to meet the villa agent, pay damage deposit, collect keys etc.
5)    Wear and tear. After a year you should spend money to repair your Thai villa. Chances are that it will need a lick of paint, this piece of wood replaced, filters cleaned and so on. Try to estimate a yearly cost for keeping the villa presentable. This should include such things as new sheets, a fee for use of fridge, TV and other expensive items. The more detailed you can be the better your estimate will be.

6) Legal fees.

Minimum you want to be making 50% more than all these costs put together. Of course the higher your occupancy rates the lower your profit margin needs to be per day rental. Some places make nearly all their money by making 200% profit at Christmas / New Year and over the year this works at a profit minus costs rate of about 50%. It varies. Keeping your eyes on thesew figures is key. Estimate what your minimum is to break even over the year. that will greatly help you to decide how much you can discount.

Your Competition

The received wisdom is that you try to slightly undercut your competition to attract more customers. There is a lot to be said for this approach. You need to study the villas that are the same size as yours, offer similar facilities and are in a similar location. It can be hard sometimes to find an exact match. This is good news as it means you have something unique to offer. I look at what hotels are charging to guide my pricing as well.

In Thailand there is often not much price undercutting going on. The market reaches a type of unspoken monopoly on prices, especially when there is no shortage of customers.

Much of the price changes go on with slightly altering the peak and low season prices. This is connected to expected occupancy levels.

Occupancy Levels

If you find you have high occupancy levels at Christmas and during the European summer holidays it is often not a bad idea to slightly raise your prices for these times. This will increase profit. By the same token if low season occupancy rates are low it is a good idea to drop the rates at these times of the year. Another idea is to offer monthly rates at these slow times. To make this possible you can offer different packages that perhaps don’t include maid service and other services. People keen for longer term lets often want a bare bones package. This suits you and the tenants. As long as you are making near your 50% profit margin there is no problem. Moreover, it is always good to have people staying – they help spread the word about the villa and can also be encouraged to leave positive comments on Trip Advisor. They can also form part of a repeat customer business.

If you have really low occupancy rates then you should consider drastically changing your marketing strategy, upgrading the villa and altering your prices. Pursue as many avenues and ideas as possible to get the bookings. Analyze what is putting people off.

Changes in the Rental Market

Holiday destinations in Thailand fall in and out of fashion. They go from being relatively unknown to being centres for mass tourism. They also fall out of favor. Places in Thailand have a habit of developing quickly and the market gets flooded. In Koh Samui hotels shot up in the 80s and 90s and now there are far too many rooms to fill. Everyone suffers, and no one can see the obvious that over-development is bad for business. In Koh Samui the hotel owners imagine all they need is more daily flights to the island. They don’t see that people are put off by the over-commercialism and high prices.

The 2008 global financial crisis has had an on-going impact on tourism to Thailand. It is a long recession and many North Americans and Europeans simply don’t have the same money to spend as before. Thus, offering cheap deals for the times when the Europeans are likely to visit is a good idea.

By contrast Russians, Chinese and other Asians are coming in droves to Thailand. Finding ways to get exposure in these markets is a good idea. One way is to offer other languages on your website. Also finding the online sites that these relatively new markets use to search for villa rental is a good idea. However, beware these customers often are far more astute with their spending and are looking for bargains that eat heavily into your profits. Also they often have very different expectations to European guests.

Pricing your villa correctly to balance being attractive to the consumer and making a healthy return for your money is not simple. The more factors you consider the more accurate you can be in assessing the mood of the market.

New Seo - The New Playing Field

One of the most important selling tools you have for selling a house in Thailand is the internet. Through the internet you can reach millions potentially, although sometimes it is hard to get more than a handful of people to your site everyday.

That just got harder with the new changes this April to the Google Algorithm. The change seems to penalize those who try to boost there position in the SERPS. Those who don't regularly send links to there sites are unaffected; but those who were seeing good progress in their position in Google for keywords have, in many cases, seen the carpet pulled out from under their feet. Do not panic is the old seo wisdom - the site will be back. I'm not so sure. Some of my sites have been down for the longest time. If Google preferred genuine content above you, then you would have less reason to grumble; but often that is not the case. Here is what I'm more certain about:

Good original content

1) Google is trying to find a way mathematically to discern shit from shinola. The better you can write and the more originality and value you can add to your writing the more you will be rewarded both now and in the future with good SERPS position and Page Rank.

Perseverance

2) If you just continue sending backlinks to your site or sites then over time they will come back. The key is to hit a variety of key phrases. If you just keep linking 'property for sale in Thailand' then you will be forever penalized by Google. You must spread your links over lots of related keywords and phrases related to your niche. Variety.

Aged Domains

3) The new (and not so new) idea in SEO is to fool Google by buying age and page rank. Every day valuable sites and URLs just get discontinued because someone lost interest or just plain forgot to renew their URL address. In auctions you can buy sites with 100s if not 1,000s of backlinks. You can find sites with page rank up to 5. If you buy a site with age it will soak up the links and will not be penalized so readily by Google. It may seem like starting again but you will be surprised how much difference age makes in the SERPS. You can also just move shop as it were, by redirecting your old site to your newly acquired aged domain.

Other Sources of Traffic

4) The final bit of advice is to find ways to not rely on Google. Lots of people make a good living from their sites and they are poorly placed in Google. How do they do this? The answer is through referrals. If you can get your links on sites with high traffic then you can see good traffic just from people clicking through to your site. The future is that more and more people will just pay for targeted traffic. Adwords is about this very topic.

Don't Dispair

You can make a sale. It is only a matter of time and hard work. The internet is only one way to sell your house. It is an important way no doubt and there is no reason to think that you cannot compete with 'the big boys'. The internet is a level playing field.

Marketing Tip: Pillar Content

Sometimes it takes new technology to re-discover old truths. One of these truths is that for all media people are drawn towards quality content that internet marketers now call 'pillar content'. Such is the extent to which quality drives popularity that many websites thrive not through artificial link building but from popular momentum generated by free links, bookmarks, Facebook thumbs up and so on.

Basically if you add value you get more interest. When selling something it is only a successful ploy to wave a price tag under someone's eyes if they have already decided to buy. People who type 'buy adidas trainers' into google are more than 60% of the time going to do just that online. The conclusion being that being number one in google.com for 'buy adidas trainers' allows you to just place a big picture and a link on your page and you have a sale.

From the marketers viewpoint most buyers are still in the uncommitted stage. They are turned off by adverts but turned on by information. This is why free maps with advertising down the side is a successful marketing ploy: it is pilllar content and promotion.

This is the key - pillar content and promotion. So if you are trying to sell a Thai villa or other property then you need a website that offers good information about the surrounding area, visa regulations, weather etc. This specific information by itself will generate traffic.

For a brochure, it is sometimes a good idea to include some value in the printed media to make people hold onto it. That is the thinking behind coupons in magazines and newspapers. Again a map or a timetable or a list of useful telephone numbers and websites gives the brochure an element of pillar content that makes it a better promotional tool.

In short, it is about going the extra mile and not being totally in the face of the customer that ideas of buying can take seed and maybe go from thought to reality. And then you have a sale. That's when you want to be up there for 'buy adidas trainers'.

Buying Furniture for a Thai Villa

Once you have built your Thai villa either for residential purposes or for rental then you have to find some furniture to put in the villa. This can be a difficult process because there are so many furniture suppliers to choose from.

Naturally your choice of furniture supplier will partly depend on what style of interior décor you wish for your house. You might prefer a minimal look, a Thai look or a more traditional western style. Some people go for a Moroccan theme in their Thai villa. While a Moroccan style is attractive in itself, it is in my opinion, somewhat gauche and inappropriate in a Thai setting.

If you are buying furniture for yourself because you intend to primarily use your Thai villa for your own use then you will want good quality furniture that is going to look good and last a long time. If you are furnishing your villa primarily for rental purposes then cost is a key factor. While the furnishings in a rental villa should be attractive they do not need to be top of the range. Renting out a villa to the public means the furniture is probably going to get more wear and tear then if the villa is just for your own use. Also if you are going to rent your Thai villa you should consider going for a neutral décor that has a generic and accessible feel.

It is important to remember a few things when looking for furniture in Thailand.

1)    When you order the furniture it does not get sent out immediately. Normally furniture suppliers make to order. So don’t forget to leave plenty of time between ordering furniture and making plans to rent out your villa. On average furniture will take 2 months to make.

2)    You cannot always dismiss a furniture supplier in Thailand because they have a clunky website. Although Thais are very adept in putting up websites they often make websites that are lacking in design values.

3)    The biggest areas for buying furniture in Thailand are Bangkok and Chiang Mai. Chiang Mai is famous for making heavy traditional pieces of furniture that emphasize the beauty of the wood. Chiang Mai is in the north of Thailand and has access to many rare and beautiful hardwoods. Furniture made in Chiang Mai is often cheaper than furniture made in other parts of Thailand. However, transportation costs can often negate any savings.

4)    Most furniture shops and suppliers will want a 50% deposit paid up front and the other 50% paid on delivery.

5)    If you are sending money to Thailand to pay for furniture then don’t send it in Thai Baht. 9 times out of 10 the Thai bank you are sending the money to will give you a better exchange rate than your local bank.

6)    It is very possible to negotiate with furniture shops. If your order is worth over $1,000 most furniture suppliers will be happy to offer a 10% discount and they sometimes throw in extras such as cushions and bed sheets to further sweeten the deal for you.

7)    Always get 2 or 3 quotes before committing. This will give you a much better idea of what represents good value.

8)    Good green options are furniture pieces made from renewable resources such as coconut, rattan and water hyacinth. Be careful, a lot of what is called ‘rattan’ is actually plastic in a rattan style weave. 

Pinging the Digg

The title says it all really. Recently I've discovered another dimension to successful internet marketing. It is not enough to write ezines, hubs and info barrels etc. sending you one way links to your site promoting property in Thailand. It is a great start, but to truly optimize your work you have to back link to your back links.

Energy Saving Tips

With every year that passes laws around the world are enforcing tighter regulations concerning carbon emissions and energy saving measures. It is only by adopting green building practices and green interior design ideas that governments around the world can meet their targets for the reduction of greenhouse gas emissions.

Bearing this in mind, it stands to reason that those villas in Thailand that have a better green profile are the villas that in the future are going to be the easiest to sell. Not only do people want environmentally friendly products but also governments are making 'green' a legal necessity.

Bearing this in mind, here is a list of energy saving and 'green' measures that are relevant to properties in Thailand:

• Heat is a major factor in Thailand. Anything that can reduce the reliance on air-conditioners is a good idea. For example, installing window awnings over east facing windows to reduce direct sunlight. Planting trees by south facing windows to create natural shade. Using ceiling fans rather than air-con. Allowing natural ventilation through a living space by opening windows.
• Installing uPVC window frames to reduce thermal gain.
• Buying glass with a low-e coating to also reduce thermal gain.
• Installing photovoltaic systems (solar panels) to produce clean, carbon free, alternative energy.
• Collecting rain water by attaching rainwater bins to drains. This rain water can be used to water the garden.
• Planting a garden that is less dependent on regular watering.
• Providing a composter to turn food waste into organic fertilizer for the garden.
• Installing a programmable thermostat that can accurately regulate the indoor temperature and cut down on cooling costs when you are not at home.
• Using recycled wood or wood from sustainably managed forests.
• Buying furniture made from quickly renewing resources such as rattan, water hyacinth and bamboo.
  

These are just some of the measures that can be taken to make a property in Thailand more environmentally friendly and energy efficient. A villa in Thailand that tenants and prospective buyers will need to spend less on cooling is a more attractive property to purchase or rent.

The Importance of Getting out of the Office

There is a temptation when trying to sell or rent a property in Thailand to spend too much time in the office and to place too much emphasis on internet marketing. For many people they just want to go to a nice air conditioned office, sit in front of a computer for seven hours and go home to a cold beer and feel they have done a good day’s work. This is an easy trap to fall into. You find a comfort zone and you are reluctant to get out of the office and try something different to promote your Thai property.

So far in this blog I too have placed too much emphasis on internet promotion and have ignored other ways of generating leads. So below I will briefly list other strategies for generating enquiries and interest.

Brochures

Brochures may seem old fashioned but they are still a good marketing tool in Thailand. In a future post I will look at some of the salient issues involved with making a good brochure, but for now let us suppose you have your brochure. Leaving them on a table in your office is not good enough. You must be proactive and put them out in places where tourists and potential customers go. The best thing to do is to purchase a number of Perspex brochure holders and put your company logo and details on them. The easiest way to do this is with a sticker. Then you need to drive around your local area and visit bars, restaurants, hotels and resorts and ask to be allowed to leave some brochures. Often these places have a table dedicated to information. Place your brochure holder with brochures there. More often than not Thai people are happy for you to leave brochures. In one day you can often place brochures in up to 20 tourist spots.

It is important to keep a record of where you have placed your brochures and to take your time to return to check your brochures. Sometimes all the brochures have been taken. Sometimes some cheeky person has put their brochures in your holder. Never leave too many brochures in one place and count how many have been taken. This will give you an idea about which spots are the most effective and which are not worth continuing.

Networking

Going to opening parties for new businesses and to launch parties is a good way of meeting people who are potentially interested in Thai property. Of course you will meet mostly people looking for new customers like you, but not everyone attending will be in the business so to speak. Networking doesn’t have to be confined to parties. It can be done on a very informal basis. Sometimes just going to a bar and striking up a conversation with a tourist can result in a new lead. Be friendly, find common ground, buy a few drinks and more often than not the conversation will get around to what you do. Offer to show them a property as a form of recreational activity. It is vital to never hard sell. It puts people off when they are out trying to enjoy themselves.

Show Friends and Family and Friends of Friends Around

It is always a good idea to take time out to show family and friends not only your property but also the general area. Show people the benefits of an area and they will grow to love a place. It is only then that viewing your property can be done in the right context. Being kind makes you look good and it makes people more inclined to take your words as the truth. Furthermore, when your friends and family return home they are more likely to recommend you and your property to their friends. If you show hospitality and kindness to enough people the word will soon get round. A personal recommendation is a powerful selling tool in business.

In the same vein it is sometimes good to let people stay in your property for discounted prices or even for free. If they had a good time it is a strong advertisement for you and your property. People back home will see the holiday photos and be envious.

Again, as with networking, it is important to not pressure people. People will often react negatively to pressure and back away. It makes you look desperate.

Placing Classifieds in Shops

Again this is about leg work and research. You would be surprised how many people stop to read classifieds in shops and supermarkets. Placing your ads in these places gives your property visibility. I heard one story of a successful promoter of a property in Spain who got the vast majority of his bookings from placing classifieds in supermarkets in the north of England. Lots of people don’t trust internet adverts but do follow up on ads placed in shops and in printed media.

Making Friends

Finally, it is always a good marketing strategy to make as many friends as possible. If you do someone a small favour they will be more inclined to do you one back. Maybe they have a friend coming to Thailand for a few days. They remember about how nice you are and come up with a plan to put their friends up at your place. Scratch enough backs and something must come of it.

So there are a few tips on what you can do outside the office and away from the computer to generate leads and paying customers. This is not an exhaustive list. I hope to be adding to it in the future.

Buying Off Plan Property in Thailand - the Advantages and the Disadvantages

Advantages

1) The main advantage of buying an off plan property in Thailand is the price. Off plan properties are nearly always cheaper than a comparative built property. Off plan in Spain and other countries around the world are investment opportunities. The same is true in Thailand. The earlier you invest in a development the bigger the potential profit is. As the development progresses so the prices for remaining off plan properties also increase.

2) If you invest with a developer with a proven track record your investment is usually safe.

3) It is sometimes possible to sell on your off plan before construction has finished. Thus making a quick profit.

4) Once the property is built you have a brand new house or villa. This villa because it is new will usually come with a structural warranty. Second hand houses and villas rarely come with a structural warranty.

5) Your new villa has had no previous owners so you won’t have to pay for alterations. Furthermore, most developers allow customers who purchase off plan property to customize their villa in terms of interior design, tile colors etc. This means you can really get the villa of your dreams with off plan.

Disadvantages

1) The main worry for the purchaser of an off plan property is that the constructor and/or developer will go bankrupt before your off plan property is completed. In which case you will have to apply to the Thai courts for compensation.

2) Time can be a negative factor. Often things take longer to build than expected in Thailand. It can be frustrating making plans to stay in your new villa only to discover that it isn’t ready for occupancy yet.

3) In the current economic climate the housing market has seen a considerable slow down. This means that off plan investment is unlikely to result in a quick purchase and re-sale to make a tidy short term profit. In the longer term property prices will increase and so will demand in Thailand. This means off plan property is more suitable for those able to wait a few years to make a profit on their investment.

4) You cannot see the property before you commit to buying. You have to make your decision based on computer renditions of the off plan property or from viewing a show house. It is the technical competency of the constructor, the reputation of the developer and the real estate agent that you have to place faith in. This is faith that the villa will be completed to set out specifications. It is important to get an independent building inspector to visit the property as it is being built to make sure the building plans are being followed.

These are the major issues of buying off plan in Thailand. It is always advisable to do your homework before committing to an off plan project. Remember that in Thailand real estate agents and developers are often one and the same thing, so don’t expect independent advice from the real estate agent. If you are keen to buy off plan property in Thailand always check around and compare the prices with finished houses on the market. If there is no considerable saving in buying an off plan property then it is not a good investment. And finally, it can never be stressed enough, get a good lawyer to advise you about the issue of foreign ownership in Thailand; and get a lawyer to check with the land registry office who actually owns the land you are intending on purchasing or leasing.

Writing Articles to Promote Your Property Website

It can be very frustrating having a website that is designed to sell your property or rent your property in Thailand. It is often the case that your website will be difficult to find by potential customers because you are competing with real estate agents and developers in Thailand for the same keywords. It is very hard to get on the first page of google or yahoo! for keywords such as 'property', 'real estate' , 'villa rental' or 'Thailand'. You are competing against CBR Ellis, Raimon Land, Siam Properties, Soho Properties and Viviun.com to name but a few. All the best domain names will already be gone - anything with 'Thailand' and 'property' in the domain address will have been snapped up long ago.

Instead it is a smarter move to try and focus on other keywords. For instance, the name of the resort or beach near your property. Or the name of the island or town where your property is located. There will be a lot more availability. Maybe the .com address is gone but perhaps the .net is available. If so buy it and slightly tweak your site and put it up again. That is the first step. The next is to get some good links to the site.

The best way to get the best links to a site is to write quality content on a magazine style site that has a big readership. Write articles about the beach, good restaurants in the area, funny or unusual things that happened to you in Thailand; write about festivals and food, about language and culture. The possibilities are nearly endless. In each article make sure to put links into the text. The anchor text, as it is called should be one of your keywords. For example, Thong Nai Pan  has both 5 star hotels and cheap bungalows to stay in. This example has got the name of the beach, 'hotel' 'cheap' and 'bungalow' all in the anchor text. You will have to carefully read the editorial guidelines for article submission for each magazine site but it gives you an idea of what an effective link should be. Don't just put the web address at the end of a piece. Rather the link should be integral to the context of the article and in the body of the article. But don't get link greedy: often you are confined to just one or two links per article.

As you write more articles make sure you link between your articles on the same site. This is usually encouraged and will further boost your search engine rankings for each of the interlinked articles. For example: as I mentioned in my previous article on website promotion it is a good idea to get a blogger and wordpress account. Here I have used words from the title of a previous post to link back to that previous post. The more internal links in a website the more search engine friendly the site becomes (this is one of the reasons why wikipedia comes out on top for some many different searches).

Here's a list of magazine sites to write articles on. They are all free, and they all allow 'self-serving' links. As I said before, read the editorial guidelines carefully before making your first submission.

1) http://ezinearticles.com/ This website has really good exposure. They are very fussy about spelling and links so follow the rules. 

2) www.hubpages.com lets you post automatically without having to submit and wait for acceptance. It is a good blogging site that is easy to use. You can add pictures, video and link widgets. They also share adsense money with you and help you get affiliate links with amazon.com and ebay.com

3) www.infobarrel.com Is another good blogging site. They share adsense and amazon money with you. The articles from infobarrel do well in search engines and give good linking juice to your website.


Remember to set up a new email address to handle all the new mails you'll be receiving. Also you can write nearly the same article several times using different wording. If you publish the same  exact article you won't get in trouble but google might down-rank the article as a duplicate - this  is all open to debate at the moment.

Finally, to give your blogs an extra boost don't forget to digg them, facebook them and twitter them.

The Rental Market in Koh Phangan and Thong Nai Pan

There seem to be three distinct stages in the development of the accommodation market in Thailand, especially for beach destinations. Phuket, Koh Samui and Hua Hin have all followed a similar evolution in their development. Below are the three stages.

1) The first visitors to a beautiful beach are invariably intrepid backpackers who are prepared to take long bus and boat journeys, hike and trek and really embrace the adventure that sometimes can be involved in getting to a destination. Backpackers will take cheap basic accommodation such as simple no bathroom bungalows or even just a hammock. Just being in a beautiful place with access to the basic necessities of food and water is enough. 

As more backpackers arrive so the locals are able to offer better accommodation and perhaps a generator for electricity in the evening and cold drinks. 

Businesses quickly become established and the locals start to make good money catering for the larger number of visitors to their little bit of paradise. With this improvement in income usually comes the financial incentives to improve infrastructure: better roads go in, better boat links become available, taxis appear and electricity arrives.

With these improvements come backpackers and tourists who want a bathroom, hot water and air-con. And thus mid-range accommodation options appear. At the same time travel guides start to publicize a location.

2) It is at this point that phase two starts. And that is high end tourism arriving. This is driven by the building of a '5 Star Hotel'. The hotel offers lots more amenities and facilities to a location. Not to mention more employment opportunities to the locals. Behind the hotel is investors who want a return for their money. They spend money on advertising the hotel and the location. The hotel works hard to liaise with travel agents, offering commissions and making promotional materials. This is when a location really explodes in popularity. TV and mass media exposure are sure to follow.

For a while the beautiful location is shared between the cheaper more basic operations geared towards cost conscious backpackers, the mid-range places and the high-end hotels. A bohemian vibe with better facilities. 2 dollar noodles and 100 dollar dinners. The choice is great for the visitor and allows maximum employment opportunities.

3) Stage two to stage three is a gradual progression more and more towards catering to high spending short stay tourists. Prices go up. The cheap bungalows are torn down and replaced with sealed concrete units with air-con, hot water and bathrooms.

A successful hotel in Thailand invariably creates copycat business plans. If an area can make good money for one 5 star hotel it can make good money for two 5 star hotels. This is especially true during times of  economic prosperity in the developed world.

At the same time a fledgling land market is normally to be found in the area. When hotels move in with tourists who spend money so the dream is created - the possibility of owning a house in paradise. As the land market becomes more established so prices start to rise. The 5 star hotels offer more and more luxury, everyone upgrades and prices rise. This creates confidence in the commercial strength of a location. With this land prices further increase.

And this is when a location really happens as a money-maker. It has everything going for it: a large turn over of high-spending tourists, a great profile as a must-visit place, and a growing reputation as a new real estate hotspot. Land prices increase year by year but are still well below the average for similar land in places like Phuket.

This is where Thong Nai Pan is at. Namely at the start of phase 3 where land prices have sharply risen and the profile of the average visitor has changed from backpacker to 2-week holiday maker or honeymooner.

In Thong Nai Pan Noi there are three 5 star hotels - Panviman, Santhiya and Ra Sa Nan Da. The latest Ra Sa Nan Da is directly on the beach with boutique villas with private plunge pools. The cheapest villa costs 22,000 Thai Baht a night ($688). That is serious money.

Now all the essentials are in place for a luxury villa rental business to flourish. Big spenders are coming to Thong Nai Pan, 5 Star Hotels are charging 5 star prices and people are starting to build their own luxury villas.

Unlike in Haad Rin and other beach resorts in Koh Phangan the tourism is not dependent on the few days surrounding the Full Moon Party. Furthermore, much of the rental accommodation in  Koh Phangan is mid to low range in quality and geared towards a long-term rental market. The returns on such a business are small but steady.

Whereas in Thong Nai Pan people want luxury and are willing to pay for it. Amongst those higher-end tourists visiting Thong Nai Pan will be a growing proportion who have already been before. They will be looking for a bargain. Why spend nearly $700 a night for a small villa when you could rent a private villa for $300 a night? These people will be wanting more space and privacy and extra amenities such as a fully fitted kitchen. For a family this makes perfect sense, and for those with food allergies it is crucial. This is what happened in Koh Samui. First the expensive hotels, then the land market, then the villas-for-rent market. One step creates the next step.

The key to making money under this paradigm of development is to know where the market is at. Things can change quickly and the market can tip into the negative situation of supply far outweighing demand.

I believe the time is right in Thong Nai Pan for money to be made in the rental market. At the moment in Thong Nai Pan the supply of luxury villas to rent is minimal yet the demand is there. It is just a matter of correct promotion to get the message out to those who would definitely be interested. Luxury villas can offer maid service, cleaning services, car rental etc. that hotels offer, but most importantly they can offer real value for money compared to thousand-dollar-a-night places.

No where else in Koh Phangan has the same cachet as Thong Nai Pan, and nowhere else in Koh Phangan has such an active land market. Now is the time to build a villa and rent it out, or buy a villa and rent it out. By the time the next up-cycle in the world economy comes around it will be too late.

Finding Reputable Lawyers in Thailand

Finding a reputable lawyer in any country is not a simple task, and this is especially true in Thailand. All lawyer firms will tell you how competent they are. Every firm of lawyers in Thailand probably has a website full of testimonials from satisfied customers. So what can you do?

Well despite its shortcomings the internet is still a good place to start. Here are a few guidelines to help you in an internet search for a reputable lawyer to help you deal with the complexities of Thai law in regard to buying and selling property, and setting up your own Thai company.

1) The first place to go is a forum. Forums give you information and advice from people who have been in similar situations to you. One of the biggest forums for issues related to buying property abroad is: http://www.propertycommunity.com/

2) A forum specifically for Thailand that is well subscribed is: www.thaivisa.com/forum. You can post nearly any question here and get a host of answers.

3) It is worth looking at several websites for Thai lawyers. You will soon begin to notice which websites look more professional. Looks can be deceptive, but on the internet a really professional looking website with clear easy to understand text is a good indicator of a reputable law firm.

Other things you should consider when choosing a law firm:

1) Is there any connection between the developer and the law firm? It is worth asking. There is an obvious conflict of interest if a law firm represents both seller and buyer.

2) Following on from the previous point, be wary of taking the advice of a property developer when choosing a law firm in Thailand.

3) If you are buying property or land in Koh Phangan, then it is a very good idea to seek legal council in Koh Samui or further afield. The law firms on Koh Phangan have an unproven track record. Whereas, law firms in Koh Samui, Phuket, Hua Hin and Bangkok have been operating for much longer in the property field and can provide much better legal advice.

4) Word of mouth is an invaluable resource. If you meet anyone who has experience of the property market in Thailand then you should pick their brain.

5) When buying property or land in Thailand or when leasing land in Thailand the first thing any lawyer should do is check at the land registry office to make sure the seller really does really own the land; and what type of land title the land has It sounds obvious but people continue to fall prey to this scam.

6) Finally, don't buy land or property on Koh Tao. The island is a legal oddity because it is a former prison colony and no proper land titles exist for the place.

Once you have decided on a few lawyer firms that seem legitimate and competent then the next step is to contact them. The promptness of the response as well as the professionalism exhibited by the response is another good indicator as to the quality of the law firm. Finally, arrange a meeting. The first meeting should be free. Ask difficult questions and use your intuition.

If you follow these guidelines you should be able to find a reputable law firm in Thailand. There are many to choose from.