Would anybody like to buy my condo ? –an unusual deal.

[Delight]

I wish to sell my condo –and then rent it back.

Details

 

 

Location  -Pratamnak Hill –Pattaya

Condominium Title deal area -74.5 m2. Foreign owned.

One bedroom

Quality furniture

I was the original purchaser –gained access 01 Sept 2007

The deal.

I bear all the running costs-maintenance fees & all maintenance. Exactly as I do now.

The new owner has no responsibilities.

Purchase price 3M Baht (non negotiable)

Rent for me to pay 90,000 Baht per 6 months –paid in advance (non –negotiable)

This represents a 6% net return on capital employed

50/50  split transfer charges.

I will need a legal agreement that allows me to  stay there, irrespective of who actually owns the condo- till my  death. I will pay for this.

 

 

Reach me via Facebook

 

 

https://www.facebook.com/alan.light2

[HampiK]

From the numbers it sounds good, one question.... 180'000 per 6 months, would be 360K per year.. but this would be 12% when I calculated correct.

[Delight]

2 minutes ago, HampiK said:

From the numbers it sounds good, one question.... 180'000 per 6 months, would be 360K per year.. but this would be 12% when I calculated correct.

Thanks

 

Have modified

[ukrules]

Somethings wrong with these numbers. That's a 12% yield, you would normally be lucky to get 5%. The rent on a 3M condo should be around 12,000 Baht yet you're prepared to pay 30,000 Baht per month.

 

How much do the other similar sized condos in your building rent for ?

[Delight]

1 hour ago, ukrules said:

Somethings wrong with these numbers. That's a 12% yield, you would normally be lucky to get 5%. The rent on a 3M condo should be around 12,000 Baht yet you're prepared to pay 30,000 Baht per month.

 

How much do the other similar sized condos in your building rent for ?

 I have corrected my numbers. It is 180,000 Baht PA

Typical long term rent 18000 PM

I can live with the numbers

[scubascuba3]

What's the name of the condo?

[Delight]

2 hours ago, scubascuba3 said:

What's the name of the condo?

Executive Residence 3

Note

 

I understand that I can be contacted by email

It is registered on ThaiVisa

Better than Facebook

[Langsuan Man]

8 hours ago, Delight said:

I will need a legal agreement that allows me to  stay there, irrespective of who actually owns the condo- till my  death.

If your are 70 that is one thing, if you are 50 another

 

And please advise this mathematically challenged individual, what is the benefit to the buyer of your scheme ?

[Delight]

7 minutes ago, Langsuan Man said:

If your are 70 that is one thing, if you are 50 another

 

And please advise this mathematically challenged individual, what is the benefit to the buyer of your scheme ?

 The buyer i.e the business person gets 6% return on the investment

Compare that to say the savings rate in a typical bank-less than 1%

Business men buy condos all the time to rent out-my offer is no different -except the return is certain

 

I do not understand your reference to age

Which do you see as being more attractive -from an investment point of view 50 or 70

[Langsuan Man]

Just now, Delight said:

Which do you see as being more attractive -from an investment point of view 50 or 70

If I want to sell my new asset then obviously I want you to die as early as possible ?

 

And how long I have to wait is tied directly to your age when entering into this scheme !

 

 

 

 

[simoh1490]

The other age related issue of course is the duration of the yield, 6% is good today, in two years time it might not be, in twenty years time it might be disastrous.

[saakura]

What is the guaratee that you will not walk out on the deal after 6 months? Filing a case in court and tracking + pursuing you would be such a mighty waste of time and lawyer fees.

[sanemax]

4 minutes ago, Langsuan Man said:

If I want to sell my new asset then obviously I want you to die as early as possible ?

And....................which floor is it on ?

[simoh1490]

3 minutes ago, saakura said:

What is the guaratee that you will not walk out on the deal after 6 months? Filing a case in court and tracking + pursuing you would be such a mighty waste of time and lawyer fees.

In that scenario, all the buyer has to do is replace the tenant, no need to track - a rent default clause would obviously apply.

[saakura]

1 hour ago, simoh1490 said:

In that scenario, all the buyer has to do is replace the tenant, no need to track - a rent default clause would obviously apply.

Yes, provided the new tenant is willing to offer you the same 6% return and on a long ter basis, without having to look for a new tenant every 6-12 months. If i am unable to sell my condo quickly due to any reason, i could do it the way of OP.

[jackdd]

6 hours ago, saakura said:

Yes, provided the new tenant is willing to offer you the same 6% return and on a long ter basis, without having to look for a new tenant every 6-12 months. If i am unable to sell my condo quickly due to any reason, i could do it the way of OP.

You should of course make sure that the condo is really worth 3 million and not buy it unseen.

If it's worth 3 million and somebody is looking for a long term investment (renting out instead of selling it after a year or two) then the offer is good

[Tagaa]

That sounds like a sweet deal for the seller/new tenant. He pays 180,000 Bt p/year for the rest of his life...fixed...no hope for an increase...ever.

 

If you are 75 years old, I might take the risk, all else being valid. If you are 50, no way I'd ever agree to let you live in my property for life at that fixed amount.

 

Maybe if you were to offer an escalation of 3% p/year, you might get more interest.

[inThailand]

Though the return numbers look possible. Since the seller/turn renter said he would pay the condo fees, maintenance expenses and the typical rental expenses of cable TV, WiFi, water and electric, the seller/turn renter's monthly costs must be north of 22K per month (15k + about 7k). Is that really attainable long term from other would be renters? 

And of course, any buyer would have the same problem the seller/turn renter has....no takers! No buyers! Hence the unusual offer.

[Delight]

8 hours ago, saakura said:

What is the guaratee that you will not walk out on the deal after 6 months? Filing a case in court and tracking + pursuing you would be such a mighty waste of time and lawyer fees.

 My motive is to sell and stay

 

I have no interest in renting in the regular way

I wish to stay and I wish to have full control over any maintenance issue. Exactly the same as I have now

I do not wish  to have to wait for any future owner to return my calls

[Delight]

1 hour ago, Tagaa said:

That sounds like a sweet deal for the seller/new tenant. He pays 180,000 Bt p/year for the rest of his life...fixed...no hope for an increase...ever.

 

If you are 75 years old, I might take the risk, all else being valid. If you are 50, no way I'd ever agree to let you live in my property for life at that fixed amount.

 

Maybe if you were to offer an escalation of 3% p/year, you might get more interest.

Right now my offer is 4.5% above Thai base

Exactly 3 years after the transfer the rent will be reviewed

If  the Thai  base increase -then the rent will increase. The rent will never go down

So a 1 % increase in base means that I will pay 1 % more.

 

I have no problem with income _ I have  a good regular income.

My motive for this deal is comfort for me and I my Thai wife

 

The fact is that non of my UK family want the condo . FET prohibits that.

My wife does not want the condo.

Too much hassle beyond my death.

With this deal a minimum 2M Baht from the sale will end up with my wife.

That is comfort

[simoh1490]

That's a very generous deal, I would cap the increases if I were you otherwise you could find yourself paying way over the odds in rent - perhaps limit the increases to a maximum of 1%/1.5% per year.

 

[Delight]

2 hours ago, simoh1490 said:

That's a very generous deal, I would cap the increases if I were you otherwise you could find yourself paying way over the odds in rent - perhaps limit the increases to a maximum of 1%/1.5% per year.

 

  You  are right !

 

Max return will be 7.5%  This wll apply  If Thai base rate  reaches 3.0%. That will be the limit

 

I can live with that.

 

The deal is about return on capital for buyer -when I am alive

 

When I die it is about condo market rates

[smutcakes]

Hi,

 

Would you be willing to leave 18 months rent up front as guarantee?

Would i also be able to sell the investment on, provided that your approval was given ?

[simoh1490]

Guarantee against what, death?

 

I think the OP's proposition is pretty good to be honest and it's affordable for many, I'd be interested but I don't want a condo in Pattaya which ultimately I would end up with at some point. All investments are a gamble to some degree but this one takes the edge of the risk in that there's a sitting tennant, realistically the arrangement could go on for many many years and for the OP's sake, we hope it does. 

[Tagaa]

3 hours ago, smutcakes said:

Would i also be able to sell the investment on, provided that your approval was given ?

There seems to be some confusion in LOS about selling a property with a tenant. I don't understand why. That should be the easiest investment property in the world to sell. The tenant has no right to object & no one needs their approval.

 

If you own an investment property, and it has a tenant, under an existing lease, there is nothing to prevent you from selling the property. THE LEASE STAYS INTACT...no ifs, ands or buts, for the length of the lease. The only thing that happens is that the seller and new owner provide proof to the tenant of the sale & rent checks are now payable to a different landlord. Easy - Peasy.

 

Now...here is the kicker...for a lease to be a valid & enforceable (in the Western world, anyway) the lease needs a beginning and ending date. The ending date as described by the proposed deal (the death of the tenant) would not qualify to bind a valid lease. The seller/tenant can sign a 30 year lease and should he die before the termination date, a clause could be placed in the lease agreement that the lease would be subject to early termination, say 30 days after the tenants death, giving family time to grieve & clean out the unit. The only sticking point with this is that leases are inheritable. The tenant says now that his family does not want the condo, but we all know that the only thing that stays the same, is that things change.

 

Perhaps a better legal vehicle would be a usufruct. They are valid & enforceable for ANY length of time, which includes the death of the usufructuary. Usufruct's are codified in Thai Law, in the Civil, Land and Commercial Code, Title VII.

 

 

[smutcakes]

6 minutes ago, Tagaa said:

There seems to be some confusion in LOS about selling a property with a tenant. I don't understand why. That should be the easiest investment property in the world to sell. The tenant has no right to object & no one needs their approval.

 

If you own an investment property, and it has a tenant, under an existing lease, there is nothing to prevent you from selling the property. THE LEASE STAYS INTACT...no ifs, ands or buts, for the length of the lease. The only thing that happens is that the seller and new owner provide proof to the tenant of the sale & rent checks are now payable to a different landlord. Easy - Peasy.

 

Now...here is the kicker...for a lease to be a valid & enforceable (in the Western world, anyway) the lease needs a beginning and ending date. The ending date as described by the proposed deal (the death of the tenant) would not qualify to bind a valid lease. The seller/tenant can sign a 30 year lease and should he die before the termination date, a clause could be placed in the lease agreement that the lease would be subject to early termination, say 30 days after the tenants death, giving family time to grieve & clean out the unit. The only sticking point with this is that leases are inheritable. The tenant says now that his family does not want the condo, but we all know that the only thing that stays the same, is that things change.

 

Perhaps a better legal vehicle would be a usufruct. They are valid & enforceable for ANY length of time, which includes the death of the usufructuary. Usufruct's are codified in Thai Law, in the Civil, Land and Commercial Code, Title VII.

 

 

It depends whats in the lease contract. Some leases do not permit assignment, like some dont permit sub leasing. In this case you would need a sales and purchase agreement and a lease agreement which would come into affect on the completion of transfer of ownership. In that lease agreement a prudent lessor and lessee would both negotiate their terms with regards future conditions of subleasing, assignment etc and penalties for this breach.

[Delight]

4 hours ago, smutcakes said:

Hi,

 

Would you be willing to leave 18 months rent up front as guarantee?

Would i also be able to sell the investment on, provided that your approval was given ?

 

I am  not sure why I  would need to submit a  guarantee.

That said if the buyer argues  a  strong case -then I am not inflexible

Reference selling his investment.

That should be possible -assuming that the legal agreement remains unchanged i.e I stay there -pay the rent- honour my responsibilities- until my last breath.

[Delight]

22 minutes ago, Tagaa said:

There seems to be some confusion in LOS about selling a property with a tenant. I don't understand why. That should be the easiest investment property in the world to sell. The tenant has no right to object & no one needs their approval.

 

If you own an investment property, and it has a tenant, under an existing lease, there is nothing to prevent you from selling the property. THE LEASE STAYS INTACT...no ifs, ands or buts, for the length of the lease. The only thing that happens is that the seller and new owner provide proof to the tenant of the sale & rent checks are now payable to a different landlord. Easy - Peasy.

 

Now...here is the kicker...for a lease to be a valid & enforceable (in the Western world, anyway) the lease needs a beginning and ending date. The ending date as described by the proposed deal (the death of the tenant) would not qualify to bind a valid lease. The seller/tenant can sign a 30 year lease and should he die before the termination date, a clause could be placed in the lease agreement that the lease would be subject to early termination, say 30 days after the tenants death, giving family time to grieve & clean out the unit. The only sticking point with this is that leases are inheritable. The tenant says now that his family does not want the condo, but we all know that the only thing that stays the same, is that things change.

 

Perhaps a better legal vehicle would be a usufruct. They are valid & enforceable for ANY length of time, which includes the death of the usufructuary. Usufruct's are codified in Thai Law, in the Civil, Land and Commercial Code, Title VII.

 

 

Interesting

[smutcakes]

8 minutes ago, Delight said:

 

I am  not sure why I  would need to submit a  guarantee.

That said if the buyer argues  a  strong case -then I am not inflexible

Reference selling his investment.

That should be possible -assuming that the legal agreement remains unchanged i.e I stay there -pay the rent- honour my responsibilities- until my last breath.

A guarantee in case you walked away/passed away or vanished. I would then have 18 months funds up front to take care of some refurbishment , try leasing the property and money to take legal action depending on the circumstances.

[simoh1490]

What was written earlier about the lease and it being transferable is correct but I don't think an ususfruct would work since that gives rights over the land. Perhaps a superficies can be used since that deals solely with the structure rather than the land?