Buying a condo in Bangkok - pros and cons

[richard_smith237]

My Wife and I sold our Condo for the original purchase price. Additional costs while we lived there were the Mortgage and service costs.

 

Pro's: After selling, all costs, fees, Mortgage etc: Monthly Cost worked out: 11,000 baht.

That's about 1/5th of the rent for a similar condo.

 

Con's: Trying to sell the condo took nearly 3 years. We were 'stuck' with the Condo until we sold and could move into a larger place. 

[HampiK]

1 hour ago, KittenKong said:

I dont personally know anyone at all in Pattaya who actually made a clear profit on a condo sale, but I know many who lost a little or a lot, or who simply have not been able to sell at all even after several months or years. Maybe I just know a lot of unlucky or stupid people.

Pattaya is much different from Bangkok about many things also about Condos.

In Pattaya Thai and Farang prices are very common in Bangkok i checked more than 30 condos and none of them had different prices for Thai and Farang, as here are enough Thais also buying or let's say not that many farangs as in Pattaya

[JAZZDOG]

1 hour ago, richard_smith237 said:

My Wife and I sold our Condo for the original purchase price. Additional costs while we lived there were the Mortgage and service costs.

 

Pro's: After selling, all costs, fees, Mortgage etc: Monthly Cost worked out: 11,000 baht.

That's about 1/5th of the rent for a similar condo.

 

Con's: Trying to sell the condo took nearly 3 years. We were 'stuck' with the Condo until we sold and could move into a larger place. 

I guess it depends how much you paid for the condo if it was an OK deal. From what you say the upside 44,000/month between your out of pocket and rent on a similar condo. That 44,000 would equate to getting a 6% return on about 9 million baht. I don't know about the Bangkok market but here in Pattaya I rent a condo that sold for 9 million three years ago for 25K baht. Granted it is a good deal but there are so many vacant condos it is not hard to find deals. I own quite a few properties in different countries but they need to be yielding good returns in exchange for me being "stuck" in an position of illiquidity.  

I would be interested to know how much you paid for this condo?

[NutsMango]

1 hour ago, JAZZDOG said:

I guess it depends how much you paid for the condo if it was an OK deal. From what you say the upside 44,000/month between your out of pocket and rent on a similar condo. That 44,000 would equate to getting a 6% return on about 9 million baht. I don't know about the Bangkok market but here in Pattaya I rent a condo that sold for 9 million three years ago for 25K baht. Granted it is a good deal but there are so many vacant condos it is not hard to find deals. I own quite a few properties in different countries but they need to be yielding good returns in exchange for me being "stuck" in an position of illiquidity.  

I would be interested to know how much you paid for this condo?

The two last condos in Bangkok which I rented

 

1) Current market asking price ~ 5.5 million - my rent 20000 THB inclusive water, electricity, internet

 

2) Current market asking price ~ 6.5 million - my rent 23000 THB

 

The #2 was impossible to find two years ago for under 7 million, more like 7.5 million

[luk AJ]

There is a big difference between buying a condo as investment or as a “home”.
I like to own my place so I can do what I want. Even if at the end I would make loss when selling, I would still prefer to own a place.
Also in case financially everything goes wrong, I have an important back-up.


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[JAZZDOG]

6 minutes ago, NutsMango said:

The two last condos in Bangkok which I rented

 

1) Current market asking price ~ 5.5 million - my rent 20000 THB inclusive water, electricity, internet

 

2) Current market asking price ~ 6.5 million - my rent 23000 THB

 

The #2 was impossible to find two years ago for under 7 million, more like 7.5 million

#1- The owner probably nets 12,000 / month after water, elec and condo fees. Based on $5.5 million he makes 2.5% if he has 100% occupancy, surely not the case, plus his money is tied up and he is a landlord, no good!

#2- Also not to good and if I understand correctly it has lost value in the last two years. Between the ownership laws here and the fact it is such a buyers market do to over saturation I can't see myself investing here. There are too many excellent opportunities elsewhere.

[JAZZDOG]

5 minutes ago, luk AJ said:

.There is a big difference between buying a condo as investment or as a “home”.
I like to own my place so I can do what I want. Even if at the end I would make loss when selling, I would still prefer to own a place.
Also in case financially everything goes wrong, I have an important back-up.


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Actually I believe there is a big difference between "buying a condo as an investment OR as a home" as opposed to buying a condo as GOOD investment AND a home. I totally understand wanting your own place, question is at what opportunity cost?

[newnative]

1 hour ago, luk AJ said:

There is a big difference between buying a condo as investment or as a “home”.
I like to own my place so I can do what I want. Even if at the end I would make loss when selling, I would still prefer to own a place.
Also in case financially everything goes wrong, I have an important back-up.


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    I totally agree.  It seems when we have these discussions of renting vs. buying, there are always a number of posts stating that if we had only, only, ONLY invested the money that we foolishly used to buy a condo and, instead, rented all those years, we would have made a better return on our investment. Possibly true, but for some of us we would not have been happy during those rental years.  For some condo buyers it's a personal thing, it's owning our own space and doing what we want with it.  It's making it ours.  It's the concept of 'home'.  Life is short, some people don't want to live their lives in someone else's rental environment.   Like you, luk AJ, I would buy rather than rent even if I thought I might lose some money on the deal; owning is worth it to me. 

    

[HauptmannUK]

I really don't see the sense in buying in Thailand. My wife is Thai and has a house and various pieces of land in Isaan.  Right now she has 3M THB in the bank and is pretty much set on buying a condo in Jomtien for us to live in 6 months of the year and as 'an investment for the future'.  I have tried to explain to her that she'd be better off putting the money into some more liquid form of investment and we can rent a property. But the Thai mentality is to own, if you can afford to.

 

Personally I would never make any large scale investment in Thailand. I have a property in the UK that I can rent out and, after costs, the income would more than cover the rental on a nice apartment in most places in Thailand.

I can't understand why anyone would want to be a landlord in Thailand. The returns seem quite modest (less than 5% after costs) and building quality means no more than 50 year lifespan. Add in the hassle factor and its just not worth it.

I am in my late 50's and value an easy lifestyle and financial flexibility very highly.  The idea of 'doing up' a condo in Bangkok sounds like the road to insanity (I have experience of dealing with Thai 'tradesmen'!).

[JAZZDOG]

7 minutes ago, HauptmannUK said:

I really don't see the sense in buying in Thailand. My wife is Thai and has a house and various pieces of land in Isaan.  Right now she has 3M THB in the bank and is pretty much set on buying a condo in Jomtien for us to live in 6 months of the year and as 'an investment for the future'.  I have tried to explain to her that she'd be better off putting the money into some more liquid form of investment and we can rent a property. But the Thai mentality is to own, if you can afford to.

 

Personally I would never make any large scale investment in Thailand. I have a property in the UK that I can rent out and, after costs, the income would more than cover the rental on a nice apartment in most places in Thailand.

I can't understand why anyone would want to be a landlord in Thailand. The returns seem quite modest (less than 5% after costs) and building quality means no more than 50 year lifespan. Add in the hassle factor and its just not worth it.

I am in my late 50's and value an easy lifestyle and financial flexibility very highly.  The idea of 'doing up' a condo in Bangkok sounds like the road to insanity (I have experience of dealing with Thai 'tradesmen'!).

Bingo!

[KittenKong]

I really don't see the sense in buying in Thailand. My wife is Thai and has a house and various pieces of land in Isaan. Right now she has 3M THB in the bank and is pretty much set on buying a condo in Jomtien for us to live in 6 months of the year and as 'an investment for the future'. I have tried to explain to her that she'd be better off putting the money into some more liquid form of investment and we can rent a property. But the Thai mentality is to own, if you can afford to.

You cant really argue with people who think that buying gold is an investment. I gave up long ago.

[newnative]

6 hours ago, KittenKong said:

Yes. I think that renovating old condos is about the only way that you can turn any sort of profit on them here. But who in his right mind would want the hassle of dealing with contractors and suppliers and suchlike here? Not me, not at any price. Nor do I want to have to deal with real estate people or building managements here. It's all massively tedious and unpleasant.

There are far easier and more enjoyable ways of earning money, I think.

      You've hit upon why my partner and I have been able to make a profit on all the condos we have sold in Pattaya.  You, and thank goodness many others, dislike doing the work it takes to make a condo truly special and one-of-a-kind.  As you say, you don't  '...want the hassle of dealing with contractors and suppliers and suchlike...'.  But, and here's the good thing, there are some buyers that recognize good design and will pay a premium for a condo that has it.  They don't want to do the work themselves but will pay to own it.  

     Luckily, my partner and I enjoy doing this.  (And, readily admit that most people would 'rather take a bullet', as my brother-in-law likes to say. )  We often take several months, even before any construction starts, to get a design as good as we can make it.  Dealing usually with small to medium size condos, sometimes it comes down to centimeters to make a piece work and a space work.  Often, there is a lot of custom furniture and art work involved to make the most of the space and set our condos apart. 

     One of our first condos was a 48sqm studio at VT7.  We did, I think, a nice design and, with a lot of measuring, planning, and custom furniture, made it into a cool junior 1 bedroom.  One of our neighbors on the floor, in an identical-size studio (and typical, boring design of bed and sofa side by side), saw our condo and was convinced it was much bigger than the one he was in. ("How come you have a separate bedroom?")  We kept saying no, they are the same size but he wouldn't believe us until he actually got out a tape measure and measured the room dimensions.  Nice when a design works out well.  And, an easy sale.

[newnative]

3 hours ago, HauptmannUK said:

I really don't see the sense in buying in Thailand. My wife is Thai and has a house and various pieces of land in Isaan.  Right now she has 3M THB in the bank and is pretty much set on buying a condo in Jomtien for us to live in 6 months of the year and as 'an investment for the future'.  I have tried to explain to her that she'd be better off putting the money into some more liquid form of investment and we can rent a property. But the Thai mentality is to own, if you can afford to.

 

Personally I would never make any large scale investment in Thailand. I have a property in the UK that I can rent out and, after costs, the income would more than cover the rental on a nice apartment in most places in Thailand.

I can't understand why anyone would want to be a landlord in Thailand. The returns seem quite modest (less than 5% after costs) and building quality means no more than 50 year lifespan. Add in the hassle factor and its just not worth it.

I am in my late 50's and value an easy lifestyle and financial flexibility very highly.  The idea of 'doing up' a condo in Bangkok sounds like the road to insanity (I have experience of dealing with Thai 'tradesmen'!).

    It's not just 'Thai mentality' to own.  I think you will find that in many countries home ownership is something that people strive for, something that people hope to have.   Home ownership can also serve as one gauge as to how a city or country is faring.  Hong Kong, for example, is doing well economically but ranks low on the happiness index because, for many Hong Kong residents, home ownership is unattainable. 

[JAZZDOG]

28 minutes ago, newnative said:

      You've hit upon why my partner and I have been able to make a profit on all the condos we have sold in Pattaya.  You, and thank goodness many others, dislike doing the work it takes to make a condo truly special and one-of-a-kind.  As you say, you don't  '...want the hassle of dealing with contractors and suppliers and suchlike...'.  But, and here's the good thing, there are some buyers that recognize good design and will pay a premium for a condo that has it.  They don't want to do the work themselves but will pay to own it.  

     Luckily, my partner and I enjoy doing this.  (And, readily admit that most people would 'rather take a bullet', as my brother-in-law likes to say. )  We often take several months, even before any construction starts, to get a design as good as we can make it.  Dealing usually with small to medium size condos, sometimes it comes down to centimeters to make a piece work and a space work.  Often, there is a lot of custom furniture and art work involved to make the most of the space and set our condos apart. 

     One of our first condos was a 48sqm studio at VT7.  We did, I think, a nice design and, with a lot of measuring, planning, and custom furniture, made it into a cool junior 1 bedroom.  One of our neighbors on the floor, in an identical-size studio (and typical, boring design of bed and sofa side by side), saw our condo and was convinced it was much bigger than the one he was in. ("How come you have a separate bedroom?")  We kept saying no, they are the same size but he wouldn't believe us until he actually got out a tape measure and measured the room dimensions.  Nice when a design works out well.  And, an easy sale.

Nice ! Also a good development to get off the ground. I also agree that it most likely is the only way to make a substantial profit on a condo. I was a Florida Contractor for 30 years so I know when I say you are far from a passive investor. This is your job and you need to flip to make it work. It's never easy but building homes in third world countries with third world costs of labor coupled with wealthy western buyers

is the sweet spot. 

 

[Wang Lalker]

i don't see owning a condo as having/owning a home, you still got too much bad news that you must deal with
oh and i have seen many living spaces advertised by rock solid sellers in bangkok region for under 300,000 baht. yeah sure it aint asoke/sukhumvit but not everyone needs girly bars and masses of traffic. and yeah they aint got pool spar and sauna nor drunken farang bums either. where? not going to tell ya. try learn to read thai first.

caveat: not certain that farang can buy these places or that they are not stinking canal affected

[KittenKong]

You've hit upon why my partner and I have been able to make a profit on all the condos we have sold in Pattaya. You, and thank goodness many others, dislike doing the work it takes to make a condo truly special and one-of-a-kind. As you say, you don't '...want the hassle of dealing with contractors and suppliers and suchlike...'. But, and here's the good thing, there are some buyers that recognize good design and will pay a premium for a condo that has it. They don't want to do the work themselves but will pay to own it.

I'll do that myself when it is for my own condo for me to live in, though I would not enjoy it at all. But I would never do it as a source of income. Nor would I want to change condos/houses any more often than I have to: I hate doing that too.
So that just about excludes me from doing renovation work here, at least more than once.

I'm not surprised that doing this enabled you to sell at a profit, but I would be surprised if those who just want to sell their condo here in the state they found it manage to show much profit. In Europe it's fairly easy to do this, unless you happen to buy at the very peak of some property boom.

[onera1961]

I bough my condo 18 years ago for 2m baht. The unit next door which is the same size just sold for 4.5m. I’m happy I bought one. I’d rather fill my pockets than someone else’s by paying rent. That said, it’s probably only sensible if here long term though. 

What is the value of 2 million today if invested in S&P 500 18 years ago. I find real estate attractive if I can get low interest mortgage.

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[WebGuy]

Thank you guys for the healthy discussion.

I'll try to take everything into consideration and avoid Chinese space stations :)

[Wang Lalker]

10 hours ago, WebGuy said:

Thank you guys for the healthy discussion.

I'll try to take everything into consideration and avoid Chinese space stations :)

run your strategy by us for when the meth heads move in next door

[HauptmannUK]

On 17/04/2018 at 5:03 PM, newnative said:

    It's not just 'Thai mentality' to own.  I think you will find that in many countries home ownership is something that people strive for, something that people hope to have.   Home ownership can also serve as one gauge as to how a city or country is faring.  Hong Kong, for example, is doing well economically but ranks low on the happiness index because, for many Hong Kong residents, home ownership is unattainable. 

I would strongly disagree that property ownership correlates with personal happiness. Switzerland has one of the world's lowest ownership rates but is one of the happiest countries. Romania has the worlds highest home ownership an is a miserable godforsaken place.

[newnative]

1 hour ago, HauptmannUK said:

I would strongly disagree that property ownership correlates with personal happiness. Switzerland has one of the world's lowest ownership rates but is one of the happiest countries. Romania has the worlds highest home ownership an is a miserable godforsaken place.

     I never said that owning a home is going to make you happy.  I said that the desire to own a home is not unique to Thailand, that it is something that many people, not just Thais, strive for.  Of course, not everyone wants to or can afford to own.  Switzerland's low rate of ownership might partly be one of affordability--a higher percentage of older Swiss own than younger.  In Hong Kong's case, it does seems to be one factor in how the residents feel about their lives, which apparently reflects on the so-called happiness index.  Romania, by the way, ranks 55 out of 140 countries surveyed on the Happy Planet Index--not bad for a 'miserable godforsaken place'.  

[HauptmannUK]

5 hours ago, newnative said:

Romania, by the way, ranks 55 out of 140 countries surveyed on the Happy Planet Index--not bad for a 'miserable godforsaken place'.  

I visited Bucharest last year for business. Didn't meet many happy-looking  Romanians. Gives me doubts about the Happy Planet Index.

[Khun Jean]

I use a simple criteria.

When it is very easy to buy then don't.

 

The ones that make a good ROI are very difficult to buy/find, so buy them when you find it.

 

(A good ROI means for me at least 10% per year).