Navigating the Thai rental market can be a minefield—especially when it comes to understanding the difference between key money and goodwill payments. These terms often confuse newcomers and even seasoned expats, leading to costly misunderstandings and missed opportunities.
Return to Town & Country Property’s homepage for expert insights into Thailand’s real estate landscape.
Let’s break it down: “Key money” is typically a one-time, upfront payment made to the landlord or property owner. It’s not a deposit, and it’s not refundable. Instead, it’s a fee for the privilege of renting a property—often seen in high-demand commercial zones like Pattaya, Bangkok, or Phuket. This practice is common in commercial real estate, especially for bars, restaurants, and retail spaces.
“Goodwill,” on the other hand, is a payment made to the previous tenant or business operator. It reflects the perceived value of the location, customer base, or brand reputation. In essence, you’re buying into someone else’s success. But beware: goodwill is subjective, and without proper documentation, it can become a legal and financial trap.
At Town & Country Property, we’ve seen countless cases where tenants paid excessive goodwill without securing proper lease terms or legal protection. That’s why we always recommend working with a trusted agent who understands the nuances of Thai property law, lease structures, and negotiation tactics.
✅ Pro tip: Always request a written agreement that clearly defines the nature of the payment—whether it’s key money, goodwill, or a hybrid of both. Transparency is key to avoiding disputes and ensuring long-term stability.
This article is part of our ongoing effort to educate clients on the real estate pitfalls in Thailand, especially in fast-moving markets like Pattaya. Whether you’re leasing a villa, a shopfront, or a hospitality venue, understanding these financial terms is crucial.
Plan to Set Up a Business in Pattaya, Thailand? "Click Here to See Just Listed Commercial Property & Business"
DISCLAIMER
Of course this script has been exaggerated.
Luckily there are many reasonable landlords that keep a very good relationship with their long-term tenants.
But, even now during forced government instructed COVID business closures, there are still landlords insisting to collect their rental fees in full. Not very compassionate during times of hardship.
Town & Country Property – your award-winning specialist on the Eastern Seaboard.
Author: Mr. KC Cuijpers
For more information: Please contact Town & Country Property – [email protected]
Related Reading
- — a deeper dive into the practice.
- — lifestyle and investment comparisons.
- — for those chasing returns in the residential market.
Return to Town & Country Property’s homepage for expert insights into Thailand’s real estate landscape.
Let’s break it down: “Key money” is typically a one-time, upfront payment made to the landlord or property owner. It’s not a deposit, and it’s not refundable. Instead, it’s a fee for the privilege of renting a property—often seen in high-demand commercial zones like Pattaya, Bangkok, or Phuket. This practice is common in commercial real estate, especially for bars, restaurants, and retail spaces.
“Goodwill,” on the other hand, is a payment made to the previous tenant or business operator. It reflects the perceived value of the location, customer base, or brand reputation. In essence, you’re buying into someone else’s success. But beware: goodwill is subjective, and without proper documentation, it can become a legal and financial trap.
At Town & Country Property, we’ve seen countless cases where tenants paid excessive goodwill without securing proper lease terms or legal protection. That’s why we always recommend working with a trusted agent who understands the nuances of Thai property law, lease structures, and negotiation tactics.
✅ Pro tip: Always request a written agreement that clearly defines the nature of the payment—whether it’s key money, goodwill, or a hybrid of both. Transparency is key to avoiding disputes and ensuring long-term stability.
This article is part of our ongoing effort to educate clients on the real estate pitfalls in Thailand, especially in fast-moving markets like Pattaya. Whether you’re leasing a villa, a shopfront, or a hospitality venue, understanding these financial terms is crucial.
Plan to Set Up a Business in Pattaya, Thailand? "Click Here to See Just Listed Commercial Property & Business"
DISCLAIMER
Of course this script has been exaggerated.
Luckily there are many reasonable landlords that keep a very good relationship with their long-term tenants.
But, even now during forced government instructed COVID business closures, there are still landlords insisting to collect their rental fees in full. Not very compassionate during times of hardship.
Town & Country Property – your award-winning specialist on the Eastern Seaboard.
Author: Mr. KC Cuijpers
For more information: Please contact Town & Country Property – [email protected]
