Analysis of Causes and Costs of Renovation and Maintenance for Second-Hand Properties: A Case Study of Bangkok Commercial Asset Management Public Company Limited

Abstract

The economic slowdown has led to a rise in second-hand properties or non-performing assets (NPAs) in the system. This situation has increased management costs for asset management companies, particularly Bangkok Commercial Asset Management Public Company Limited (BAM), and negatively affected their competitiveness. This study aims to analyze the causes and costs associated with the renovation and maintenance of second-hand properties. The research is based on historical data from 184 properties and in-depth interviews with five experienced professionals. The findings show that most second-hand properties have an average holding period of 4.95 years. During this time, the main expenses include renovation, common area fees, land tax, cleaning, and insurance ranked in descending order of proportion. Among these, renovation and cleaning costs are considered manageable. Further analysis classifies renovation items into three groups. Group A comprising painting, flooring, and doors/windows has the highest frequency and cost, making it the primary focus for resource planning. Additionally, Group B consists of frequent but lower-cost items, while Group C includes items with minimal impact. Interview findings suggest that cost reduction can be achieved by adjusting management practices, selecting cost-effective materials, and implementing strict quality control.