Am I allowed to ask questions about a TV posting?

[elgenon]

TV listed a property for 6,900,000 that guarantees 7% return for 15 years. Forgetting time value of money and additional costs this means you are guaranteed to get more than your money back in 15 years. Is this too good to be true?

[Peterw42]

Why dont you ask the person selling the property, any listing will have contact details etc. Thaivisa isn't selling the property, Thai visa is a website where the listing appears.

A quick google search "guaranteed rental return thailand" will give lots more information, most of the returns are not real or the contract not enforceable etc, return is a gross figure etc.

You can get some great rental returns in some segments of the market (up to 10% is achievable) but not usually via the rental return promises.

 

 

 

Edited April 6, 2019 by Peterw42

[baansgr]

Dont forget, maintenance fees, upkeep, commissions/taxes, suddenly that 7% drops to 4%...and Thailand without any recourse on unscrupulous developers unless a lengthy court case costing millions its not an ideal investment. Plenty guaranteed returns in UK, Singapore and the like with proper regulations.

[Peterw42]

A typical scenario can be, a 7% gross rental return, then the company charges a 6% management fee. A 1% net rental return, 1% over 15 years equals 15 %, the same amount you overpaid when you purchased the property. 

[NCC1701A]

1 hour ago, elgenon said:

Is this too good to be true?

everything  in Thailand is too good to be true.

[Pilotman]

sorry mate, I don't mean to be insulting  but are you that naive?  Nobody can 'guarantee' a rental return. There are many hidden costs in property rental but the biggest risk by far is that the property is in Thailand, where there are very few laws protecting you and certainly no guarantees that the property will still be yours in the future.  

[Pilotman]

19 minutes ago, Pilotman said:

sorry mate, I don't mean to be insulting  but are you that naive?  Nobody can 'guarantee' a rental return. There are many hidden costs in property rental but the biggest risk by far is that the property is in Thailand, where there are very few laws protecting you and certainly no guarantees that the property will still be yours in the future.  

just to add, as a good rule of thumb here in Thailand, only invest what you are prepared to lose. 

[xylophone]

31 minutes ago, Pilotman said:

sorry mate, I don't mean to be insulting  but are you that naive?  Nobody can 'guarantee' a rental return. There are many hidden costs in property rental but the biggest risk by far is that the property is in Thailand, where there are very few laws protecting you and certainly no guarantees that the property will still be yours in the future.  

As you have said, there are very few laws protecting one in Thailand and therefore no guarantees that the property will still be yours in the future..........

 

Here in Phuket, there are is a developer offering a 7% return for 15 years when one buys a 5 or 6 million baht condo, but the purchaser can only live in it for one month a year and supposedly upon 15 years being reached, this company will buy it back for the original purchase price.

 

At first glance it may seem too good to be true, but what one is really doing is handing over the money to the developer, so that the developer can pay the money back in yearly instalments, so at the end of 15 years, the investor gets his money back (one hopes) and reimbursement of his original purchase costs.

 

Of course there is no telling that the developer will still be around in 15 years, or that this property will still be rentable/livable, or of course that the contract will be honoured, as many here haven't, as witnessed by the empty and unfinished developments around the place.

 

PS. Forgot to add that the condos are rented out mainly to Chinese short stay tourists, as the developer has contacts in China, so a very lucrative business model!

Edited April 6, 2019 by xylophone

[elgenon]

On 4/5/2019 at 8:01 PM, Pilotman said:

sorry mate, I don't mean to be insulting  but are you that naive?  Nobody can 'guarantee' a rental return. There are many hidden costs in property rental but the biggest risk by far is that the property is in Thailand, where there are very few laws protecting you and certainly no guarantees that the property will still be yours in the future.  

I wanted to hear different peoples' perspectives and ideas. I always learn. I am never insulted when somebody criticizes me for asking questions. If I didn't ask questions I would know a lot less than i do. It doesn't imply naivete just a willingness to learn. Many times I learn things that have nothing to do with the original question. Please see all the replies.

[Pilotman]

1 minute ago, elgenon said:

I wanted to hear different peoples' perspectives and ideas. I always learn. I am never insulted when somebody criticizes me for asking questions. If I didn't ask questions I would know a lot less than i do. It doesn't imply naivete just a willingness to learn. Many times I learn things that have nothing to do with the original question. Please see all the replies.

to be fair, you have been told the same thing repeatedly here. How many times do you need to read advice to 'learn'? I agree that asking questions is what TV is good for, but when you get such definitive advice as you seem to have received, its time to make a decision don't you think? 

[scorecard]

On 4/6/2019 at 9:35 AM, baansgr said:

Dont forget, maintenance fees, upkeep, commissions/taxes, suddenly that 7% drops to 4%...and Thailand without any recourse on unscrupulous developers unless a lengthy court case costing millions its not an ideal investment. Plenty guaranteed returns in UK, Singapore and the like with proper regulations.

And keep in mind that there 'offers; have been around for a long time and in many cases the returns have not materialized and in some cases the developer has just reduced the guaranteed % from 15 to 10 to 5 to nothing more said. 

[Psimbo]

I've always considered  the 'guarantees' to be complete BS. No one can promise that a property will generate that sort of return- always smells of a rip-off to me. My complex is typically 30-70% empty during the year so the owners clearly are not getting a decent income.

[Lacessit]

Scammers love the time factor. 15 years gives them plenty of time to disappear with the funds. That's why forestry plantation investments are so popular with them.

[Peterw42]

17 minutes ago, Psimbo said:

I've always considered  the 'guarantees' to be complete BS. No one can promise that a property will generate that sort of return- always smells of a rip-off to me. My complex is typically 30-70% empty during the year so the owners clearly are not getting a decent income.

Not every empty condo is looking for a rental return, they can simply be holiday houses that are used over high season or school holidays. A little old thai lady owns the condo next to me, she bought it to give to the the grandkids one day, she isn't remotely interested in renting it out.

[Jip99]

Just now, Psimbo said:

I've always considered  the 'guarantees' to be complete BS. No one can promise that a property will generate that sort of return- always smells of a rip-off to me. My complex is typically 30-70% empty during the year so the owners clearly are not getting a decent income.

 

 

So, they are 70-30% full.

 

 

Let's call it 50%, let's say 25 weeks.

 

Take a condo that rents long-term for 10,000 Baht p.m  =  120,000 Baht p.a. .

 

 

That will likely generate up to 750/850 Baht per night on short-term lets.

 

 

750 x 7 x 25 = 131,250 p.a.

 

Not all, just an example.

[worgeordie]

One thing for sure,it's getting harder to find tenants ,and without 

one,the property is going to give you no return at all,and will in fact

end up costing you money,bad time to buy property to rent,they are

too expensive,there's  too many for rent,and not enough tenants.

regards worgeordie

[Jip99]

Just now, Peterw42 said:

Not every empty condo is looking for a rental return, they can simply be holiday houses that are used over high season or school holidays. A little old thai lady owns the condo next to me, she bought it to give to the the grandkids one day, she isn't remotely interested in renting it out.

 

 

True  - and that will apply to a decent percentage of 51% of the condos.

 

In fact the facilities provided by condos bank on the fact that they are never at 100% occupancy.

[Snow Leopard]

On 4/6/2019 at 7:25 AM, xylophone said:

As you have said, there are very few laws protecting one in Thailand and therefore no guarantees that the property will still be yours in the future..........

 

Here in Phuket, there are is a developer offering a 7% return for 15 years when one buys a 5 or 6 million baht condo, but the purchaser can only live in it for one month a year and supposedly upon 15 years being reached, this company will buy it back for the original purchase price.

 

At first glance it may seem too good to be true, but what one is really doing is handing over the money to the developer, so that the developer can pay the money back in yearly instalments, so at the end of 15 years, the investor gets his money back (one hopes) and reimbursement of his original purchase costs.

 

Of course there is no telling that the developer will still be around in 15 years, or that this property will still be rentable/livable, or of course that the contract will be honoured, as many here haven't, as witnessed by the empty and unfinished developments around the place.

 

PS. Forgot to add that the condos are rented out mainly to Chinese short stay tourists, as the developer has contacts in China, so a very lucrative business model!

I doubt if you can get out of the contract also. Locked in. 

[elgenon]

2 hours ago, Pilotman said:

to be fair, you have been told the same thing repeatedly here. How many times do you need to read advice to 'learn'? I agree that asking questions is what TV is good for, but when you get such definitive advice as you seem to have received, its time to make a decision don't you think? 

Sorry to have offended you. I'm glad you understand my position and reasoning perfectly.