A higher service charge in a branded residence is expected - it funds the service level you bought. The risk is not the size of the charge. It is a charge that has been understated, or a sinking fund that has not been provisioned.
The service charge is the recurring fee every owner pays towards running the building. In a branded residence it is materially higher than in a standard condominium, and that is not, in itself, a problem — it is what pays for the service level you bought. It becomes a problem when it is understated at the point of sale, or when it funds an operation that has not been properly provisioned for the future.
Almost everything inside your own front door. In-unit maintenance, appliance replacement, soft furnishings, redecoration and the periodic refurbishment that guest use makes necessary all sit with the owner, and the last of those is the one people forget to budget for. If a unit is in a rental programme, check carefully whether cleaning, linen and consumables are inside the service charge, inside the rental split, or billed to you separately — all three arrangements exist.
The service charge keeps the building running this year. The sinking fund is the reserve that pays for the things that fail every ten or fifteen years — lifts, roofing, chillers, generators, structural repairs. A building with a healthy sinking fund absorbs those events. A building without one issues a special levy, and special levies are how owners discover that a cheap service charge was never cheap at all.
This is the single most useful piece of due diligence available on an existing building, and it is often obtainable: ask for the sinking-fund balance, the contribution rate, and the schedule of major works the committee expects over the next decade. See what a sinking fund is in a Thai condominium for the legal background.
| Ask for | What you are testing |
|---|---|
| Three to five years of actual charges, not a first-year estimate | Whether the charge has been held artificially low to support sales |
| The rate per square metre, not the total | Comparability between buildings and unit sizes |
| The sinking-fund balance and contribution rate | Whether major works are funded or will arrive as a levy |
| The last three years of special levies | Whether the ordinary charge is actually sufficient |
| Whether the developer is subsidising the charge, and until when | The size of the step-up you will face when the subsidy ends |
| What happens to your charge if you leave the rental programme | Hidden coupling between the two |
Service charges and sinking-fund contributions are a permanent deduction from gross rent, which is why the honest net figure on managed resort stock sits in the mid-single-digits — in the region of 4–5% — rather than the gross numbers that get advertised. It is not guaranteed and your capital is at risk. A projection that quotes a yield without naming the service charge per square metre is not a projection you can use. Our guide to Phuket service charges covers typical structures, and the cost of ownership hub puts every recurring line in one place.
Want the actual service-charge history for a specific building?
See if you qualify →Because the charge funds the service level. Staffed reception, security, housekeeping of common areas, amenity operation and maintenance to a contracted standard all cost more than a basic condominium regime. A higher charge is expected; an understated one is the actual risk.
Typically building staffing, common-area utilities and insurance, maintenance of lifts, pools and plant, management fees and amenity operation. It does not usually cover anything inside your own unit, including refurbishment driven by guest use.
The sinking fund is the reserve for major works that recur every ten to fifteen years, such as lifts, roofing and chillers. A building with a healthy fund absorbs those costs; one without issues a special levy to owners. Ask for the balance, the contribution rate and the schedule of expected works.
Enough to be the main reason honest net yields sit in the mid-single-digits rather than the double-digit gross figures often advertised. Any projection that does not state the service charge per square metre cannot be relied on. Returns are not guaranteed and capital is at risk.
Reviewed 2026-07-20 · Written by James Allwinton, who runs the research and the numbers behind every introduction at The Expat Investor. We are an introducer, not a financial, legal or tax adviser — this is general information, not advice.
How we source this: category explanations are written from the operating structures we see in the market and from Thailand's Condominium Act; ownership and title points follow the Thai Land Department position set out across our answers library. Figures for any specific building — price, service charge, sinking fund and the net yield actually achieved — are confirmed with you privately rather than published here.