
Key money is a type of non-refundable payment. This payment, often substantial, goes directly to property owners.
Foreign investors frequently encounter this in Bangkok’s rental market.
Key money differentiates itself from security deposits. Security deposits serve as collateral for potential damages, whereas key money secures rental space exclusively.
Examples include securing prime locations in Bangkok’s Sukhumvit or Silom areas. Another distinction lies between key money and advance rent payments.
Advance rent applies to future use, but key money does not count towards rent.
Key money features include lump-sum payments. These payments, typically large, happen at lease commencement.
Popularity stems from high-demand areas like commercial districts. Negotiability stands as another feature.
Terms of key money payments, amount, and frequency can vary between landlord and tenant. Visibility within agreements also characterizes key money.
Detailed terms appear explicitly in contracts, ensuring legal clarity.
Common features of key money span across markets. Upfront payment remains a constant requirement.
This payment solidifies the leasing agreement. Universality also applies, as both residential and commercial sectors practice key money exchanges.
Cultural acceptance, especially in Bangkok, denotes key money as an established norm within the real estate process.
Unusual key money features include periodic renewal payments. In some leases, tenants must pay key money again at renewal periods.
Performance-based increases may apply, adjusting key money based on business success. Transferability is another oddity, where key money rights can transfer to new tenants under specific conditions.
Unique key money features encompass speculative investment. Tenants might pay key money speculating on future returns from a prime location’s business potential.
Exclusivity agreements often tie to key money, where landlords agree not to rent nearby spaces to competitors. Third-party involvement introduces a unique angle, with brokers or intermediaries sometimes collecting or negotiating key money.
Comparing key money to other payments, its non-refundability and non-application toward rental payments stand out. Unlike security deposits, key money does not safeguard against damages nor does it ensure maintenance.
Its role in granting access to sought-after rental spaces marks a clear distinction from advance rent, which merely pre-pays for future occupancy.
Understanding key money’s intricacies aids in navigating Bangkok’s competitive real estate market. For further details, consider exploring our glossary about Bangkok real estate.
This resource deepens comprehension, offering clarity to foreign investors and home buyers alike.