buying property for rental income

[murraynz]

i live in condo at cosy beach..i now want to buy some smaller condos to create a good rental income...

i know places like 'The Base and area around jomtien bus station,are good.

i expect a minimum 7% return-prefer annual renters..

would need to buy at bargain prices{i dont believe cap gains are realistic,in the area}

Only constructive replies please...

[ThomasThBKK]

Have no recommendations as i don't know that area at all but keep taxes into consideration of you calculations: https://www.findthaiproperty.com/thailand-investment-news/thailand-property-rental-income/

 

 

Unlike Thais, they can throw us out of thailand ????

[madmen]

4 minutes ago, ThomasThBKK said:

Have no recommendations as i don't know that area at all but keep taxes into consideration of you calculations: https://www.findthaiproperty.com/thailand-investment-news/thailand-property-rental-income/

 

 

Unlike Thais, they can throw us out of thailand ????

I will pay tax when the thais do. How many people do you know have been 'thrown" out of Thailand?

[madmen]

The problem with Pattaya is its seasonal. When its dead its really dead and I can rent a condo in several places I know without even a lease , 5 k deposit and 5 baht electricity/unit

 

I would buy a second hand condo ( new prices have multiplied into the crazy zone) as close to lower sukhumvit BKK as possible. There is a steady flow of farang that can afford the rent.

 

The base and view talay 6 are standouts though

Edited June 11, 2019 by madmen

[murraynz]

9 hours ago, madmen said:

I will pay tax when the thais do. How many people do you know have been 'thrown" out of Thailand?

thanks for your coments..of course it would be foolish of a landlord, not to allow for paying taxes,but as above, i dont think many of the locals do...

either way, the tax rates are much lower % than what im used to paying..

much lower expenses than what im used to paying NZ and aust..

sure, pattaya is seasonal, but i would rather do annual rents to long term tenants..

i would never buy from developer before completion.

[cabanlit]

Can't understand this "buy property for rental income" mindset, certainly in Thailand.

 

Yes, you may get a decent percentage in income but what about one day getting your capital back? That's the hard part, the VERY hard part.

 

May as well just leave the capital in a bank, and take monthly withdrawals from it.

[davidst01]

Do it and you have to deal with all the idiot tenants and issues in an unregulated market. It would be more hastle than its worth imho

[justin case]

1 hour ago, cabanlit said:

Can't understand this "buy property for rental income" mindset, certainly in Thailand.

 

Yes, you may get a decent percentage in income but what about one day getting your capital back? That's the hard part, the VERY hard part.

 

May as well just leave the capital in a bank, and take monthly withdrawals from it.

considering that your children if they are non-Thai will have to pay the value of your condo, to "inherit" them... kind of crazy stuff

 

[hrrecruiter]

20 minutes ago, justin case said:

considering that your children if they are non-Thai will have to pay the value of your condo, to "inherit" them... kind of crazy stuff

 

Why is that? Never heard that before. Curious as I own a condo here, considering a second, much more expensive one, wouldnt mind making it easier for my heirs to keep my assets

[guest879]

I have done it around Jomtien and pratumnak. 9 rentals total. complete waste of time. I consider myself to get my money back when I sold which took many years. the tiny rents and constant problems made it a nightmare. very hard to not be empty over low season. I was lucky I never had a problem with the law. I hope you will listen to my advice.

[Delight]

The condo act states that your heirs have to bring money into Thailand at least equivalent to the land office appraised value of the condo.

This qualifies them to obtain  the essential FET.

They keep the money-but simply have to bring it in.

If the condo is in a company name then no FET required.

Inheriting a condo can be more of a liability than an asset.

[madmen]

On 6/12/2019 at 8:03 AM, murraynz said:

thanks for your coments..of course it would be foolish of a landlord, not to allow for paying taxes,but as above, i dont think many of the locals do...

either way, the tax rates are much lower % than what im used to paying..

much lower expenses than what im used to paying NZ and aust..

sure, pattaya is seasonal, but i would rather do annual rents to long term tenants..

i would never buy from developer before completion.

You will struggle. There is no industry or work pulling in westerners to Pattaya and you only need to spend 30 mins on soi buakhao where all the locals gather to see most are poor pensioners more concerned with alcohol expense than rent expense. 

In low season the dramatic drop of tourists will also affect long termers as landlords get desperate ..some money better than none. If you have the money go VT6 , absolute prime position but not cheap 

[Number 6]

I don't see how you're making money. Maybe after 45 years you can sell for half what you paid and that will be the *profit*.

 

I'm being constructive.

Edited June 13, 2019 by Number 6

[madmen]

1 minute ago, Number 6 said:

I don't see how you're making money. Maybe over 45 years.

 

I'm being constructive.

Sub 5 million purchase 78 sqm rented 40K lower sukhumvit 7 min walk to nana or Aoke bts bought with the aus dollar flying 13 years ago off plan. When the time comes to sell I already no the going price which is good and exchange rate is great but dont want to sell with fantastic rent.

Dont listen to TV BS that everybody loses money on RE  posted by 4k /month fan room renters in pattaya. Its just complete nonsense unless of course location wasn't an issue then thats the same the world over, harder to sell!

[Lacessit]

I'm not sure why I would buy property in Thailand for rental income, with all its attendant risks, when I can get 5 - 10% return on my capital in Australia with peer-to-peer lending.

[madmen]

4 minutes ago, Lacessit said:

I'm not sure why I would buy property in Thailand for rental income, with all its attendant risks, when I can get 5 - 10% return on my capital in Australia with peer-to-peer lending.

"Peer-to-peer lending, also abbreviated as P2P lending, is the practice of lending money to individuals or businesses through online services that match lenders with borrowers. ... There is the risk of the borrower defaulting on the loans taken out frompeer-lending websites."

 

No thanks plus the dollar is heading to 15 baht historical low and will be there in a few years. Any profit you might get if you don't lose it all due to risk will be wiped out by currency exchange. I would dump that and buy into the SET here in managed funds or watch your oz dllors die a slow death

[Lacessit]

11 minutes ago, madmen said:

"Peer-to-peer lending, also abbreviated as P2P lending, is the practice of lending money to individuals or businesses through online services that match lenders with borrowers. ... There is the risk of the borrower defaulting on the loans taken out frompeer-lending websites."

 

No thanks plus the dollar is heading to 15 baht historical low and will be there in a few years. Any profit you might get if you don't lose it all due to risk will be wiped out by currency exchange. I would dump that and buy into the SET here in managed funds or watch your oz dllors die a slow death

So far, over three years, I have had minimal losses on defaults. I spread my risk by only committing $1000 max on any one peer to peer loan. I'm currently averaging 8% return overall.

15 baht to the dollar is Chicken Little territory. IMHO it's more likely the baht will tank as Thai exports become more expensive.

Invest in the SET? Only if I had a death wish. I don't invest in something I don't understand.

We'll see in a few years, won't we? What's with the black fill on your post?

[madmen]

17 minutes ago, Lacessit said:

So far, over three years, I have had minimal losses on defaults. I spread my risk by only committing $1000 max on any one peer to peer loan. I'm currently averaging 8% return overall.

15 baht to the dollar is Chicken Little territory. IMHO it's more likely the baht will tank as Thai exports become more expensive.

Invest in the SET? Only if I had a death wish. I don't invest in something I don't understand.

We'll see in a few years, won't we? What's with the black fill on your post?

AUD been steadily falling from 32baht to now approx 22 baht. That's a much bigger fall than the next leg down to 15 baht which it will test ..That's what charts are for. Time will tell

 

Black fill is an APP on my PC that turns the screen dark at night so it doesn't burn my eyes

[murraynz]

Thanks guys, for your replies. It seems like it would be foolish buying rental condos in Pattaya. I have been a landlord for many yrs in NZ, so know the pitfalls. At least we have tenant regulations, mostly anti landlord.. We get cap gains which are still not taxed.. I currently have large investment in commercial property syndicate. Returns 8per cent. But I pay 33 per cent taxes. Still have rental houses,giving a much lower return..  I think I will keep my head screwed on and not send any more money Thailand... I invest too much in the ladies already, all casual, never a wife. That would be loosing the most money. 

 

[Lacessit]

55 minutes ago, madmen said:

AUD been steadily falling from 32baht to now approx 22 baht. That's a much bigger fall than the next leg down to 15 baht which it will test ..That's what charts are for. Time will tell

 

Black fill is an APP on my PC that turns the screen dark at night so it doesn't burn my eyes

Ah, a chart believer. IMHO there are just as many people who have lost on charts as have gained from them.

[ericthai]

1 hour ago, madmen said:

AUD been steadily falling from 32baht to now approx 22 baht. That's a much bigger fall than the next leg down to 15 baht which it will test ..That's what charts are for. Time will tell

 

Black fill is an APP on my PC that turns the screen dark at night so it doesn't burn my eyes

That's the aud losing value.

[matador007]

If you want to earn 6-12% annually on USD from interest, easily done these days.
If interested, let me know and I can send you some info.

 

Right now its 20% on USD.

[Tomahawk21]

15 hours ago, guest879 said:

I have done it around Jomtien and pratumnak. 9 rentals total. complete waste of time. I consider myself to get my money back when I sold which took many years. the tiny rents and constant problems made it a nightmare. very hard to not be empty over low season. I was lucky I never had a problem with the law. I hope you will listen to my advice.

agree with you 100% , done this years ago with houses, supplies out striped demand, rents falling, shortage of tenants. being messed around my the Thais who came to re decorate, DONT DO IT ! 

[4MyEgo]

17 hours ago, Lacessit said:

I'm not sure why I would buy property in Thailand for rental income, with all its attendant risks, when I can get 5 - 10% return on my capital in Australia with peer-to-peer lending.

Just remember the higher the return, the higher the risk, as for purchasing property in Thailand for rental income, not a chance in the world, and that's coming from someone with 25 years property background in Sydney.

 

I have been averaging 1% per month tax free as a non resident on the Australian Stock Market (ASX) doing it myself, although there are also risks, but I am in control, of late with Trump taking a dump on China for the better of his country, he has really put a damper on the market making things harder to pick and choose stocks, which has halved the % of late which is still ok, but gold has been a favorite of mine of late, in and out, if the timing is right.

Edited June 14, 2019 by 4MyEgo

[bobthomas]

19 hours ago, madmen said:

Sub 5 million purchase 78 sqm rented 40K lower sukhumvit 7 min walk to nana or Aoke bts bought with the aus dollar flying 13 years ago off plan. When the time comes to sell I already no the going price which is good and exchange rate is great but dont want to sell with fantastic rent.

Dont listen to TV BS that everybody loses money on RE  posted by 4k /month fan room renters in pattaya. Its just complete nonsense unless of course location wasn't an issue then thats the same the world over, harder to sell!

Riiight! Thanks for your very useful Formulae. Which, correct me if I'm wrong, is: 1) Travel back in time 13 years, take a risk to buy a condo off plan, 2) Keep it occupied in the wake of a plethora of new condos going up around you, that to be honest, are owned by people that are renting out at ever lower prices, and 3) Hope to avoid being in that 90% or so of people that bought condos they can't rent or sell. I think a simple statistical analysis would prove that, the odds of achieving the success you have had are low enough to advise against the endeavor. If however, a person has access to quality renters such as a connection with HR Department at Samsung, in which their executives get 150,000 Baht a month housing allowance, then owning a quality condo or house could prove quite lucrative. Without a functional network of some sort in place, you would have better luck living "Happily ever after" with a Na Na Disco Queen, than making any real success in Real Estate.

 

Kind regards,

 

Uncle Bob and his 2 Cents

[Lacessit]

1 hour ago, 4MyEgo said:

Just remember the higher the return, the higher the risk, as for purchasing property in Thailand for rental income, not a chance in the world, and that's coming from someone with 25 years property background in Sydney.

 

I have been averaging 1% per month tax free as a non resident on the Australian Stock Market (ASX) doing it myself, although there are also risks, but I am in control, of late with Trump taking a dump on China for the better of his country, he has really put a damper on the market making things harder to pick and choose stocks, which has halved the % of late which is still ok, but gold has been a favorite of mine of late, in and out, if the timing is right.

Are you a trader, or a value investor? Farming dividends? Being a trader, as I understand it, involves having your eyeballs glued to a computer screen during trading hours.

I'd like to understand how your gains are tax free. My understanding is non-residents are taxed at the marginal tax rate, with no access to franking credits or tax offsets that are available to residents. How does that work?

[4MyEgo]

28 minutes ago, Lacessit said:

Are you a trader, or a value investor? Farming dividends? Being a trader, as I understand it, involves having your eyeballs glued to a computer screen during trading hours.

I'd like to understand how your gains are tax free. My understanding is non-residents are taxed at the marginal tax rate, with no access to franking credits or tax offsets that are available to residents. How does that work?

I am a retiree and a non resident and am not glued to the screen.

 

From my enquiries to my accountant, the ATO and various websites, no tax is payable on shares purchased on the ASX and no capital gains tax is payable on shares sold.

 

The above said, if the shares are not fully franked, i.e. the tax has not already been taken out, e.g. not paid by the company, then you have to pay the tax on non resident rates. Fully franked shares on the other hand already have the tax taken out, so why would you pay tax again, that would be double dipping.

 

Non residents cannot access franking credits or get tax offsets, you are correct there.

 

Now you might ask yourself why non residents don't pay any kind of tax on buying and selling fully franked shares, and the answer to that would be that maybe, just maybe the Australian Government wants foreigner companies/non residents to invest in Australian companies, tax them and they will go elsewhere, now we would be talking a whole lot of money there.

 

Google: If the dividends are fully franked then they are exempt from withholding tax and any further income tax in the hands of a non-resident. ... When it comes to the sale of the shares, at a very high level non-residents are only subject to CGT in Australia on assets that are classified as 'taxable Australian property' (TAP).Mar 24, 2014

 

Taxable Australian property meaning "real estate", now you don't want to own property in Australia if you are deemed a non resident because you will pay tax from the very 1st $ you make, i.e. non residents are excluded from the $18,200 threshold, remove the 50% capital gains tax discount and add the foreign resident land tax levy and you will understand why you don't want to own property in Oz as a non resident. 

Edited June 14, 2019 by 4MyEgo

[manchega]

based on BKK experience of rental income properties.  I was making good 15-20% ROI but also spending on maintenance is eating that up every 3 - 5 years.

Long term tenants, but a lot of hassle involved in getting new ones, serious ones etc. if I look at any single month the hours of lost working time start to outweigh the returns of the townhouses when days are spent on dealing with getting new tenant, organising cleaning for uninhabited property etc.

as the poster who says they will be getting their capital back, I am of the same opinion that the money could be better of sitting somewhere else

particulalry when in BKK people are able to rent whole houses for 5-10k in areas with good access to malls (not central sukhumvit stuff) and transport hubs.

if you consider a family can move into somwhere for much lower rent and they don't care about security guards, mod western cons of fitted kitchen, dishwashwer, washer and drier, water filters, fitted bathrooms, walk in closet etc.

Hoping to get capital back or watch these go underwater despite being on the good side of the river..

[Lacessit]

2 hours ago, 4MyEgo said:

I am a retiree and a non resident and am not glued to the screen.

 

From my enquiries to my accountant, the ATO and various websites, no tax is payable on shares purchased on the ASX and no capital gains tax is payable on shares sold.

 

The above said, if the shares are not fully franked, i.e. the tax has not already been taken out, e.g. not paid by the company, then you have to pay the tax on non resident rates. Fully franked shares on the other hand already have the tax taken out, so why would you pay tax again, that would be double dipping.

 

Non residents cannot access franking credits or get tax offsets, you are correct there.

 

Now you might ask yourself why non residents don't pay any kind of tax on buying and selling fully franked shares, and the answer to that would be that maybe, just maybe the Australian Government wants foreigner companies/non residents to invest in Australian companies, tax them and they will go elsewhere, now we would be talking a whole lot of money there.

 

Google: If the dividends are fully franked then they are exempt from withholding tax and any further income tax in the hands of a non-resident. ... When it comes to the sale of the shares, at a very high level non-residents are only subject to CGT in Australia on assets that are classified as 'taxable Australian property' (TAP).Mar 24, 2014

 

Taxable Australian property meaning "real estate", now you don't want to own property in Australia if you are deemed a non resident because you will pay tax from the very 1st $ you make, i.e. non residents are excluded from the $18,200 threshold, remove the 50% capital gains tax discount and add the foreign resident land tax levy and you will understand why you don't want to own property in Oz as a non resident. 

If I understand you correctly, you are a value investor who buys quality shares when you consider they are low, and sells them after at a higher price. I'm not sure whether that is a capital gain, or a trading gain. It depends on how long you hold the stock. My understanding is one has to hold the stock for 1 year minimum, anything less is a trading gain and taxed differently by the ATO.

[4MyEgo]

13 minutes ago, Lacessit said:

If I understand you correctly, you are a value investor who buys quality shares when you consider they are low, and sells them after at a higher price. I'm not sure whether that is a capital gain, or a trading gain. It depends on how long you hold the stock. My understanding is one has to hold the stock for 1 year minimum, anything less is a trading gain and taxed differently by the ATO.

I don't know where you are getting your information from but hopefully this will clear things up, in particular the bottom line that I have copied and pasted for you from within the link, see below the link address that I have copied and pasted.

 

The wording hits the nail on the head, e.g. 'taxable Australian Property', which shares are clearly not: https://www.ato.gov.au/General/Capital-gains-tax/

 

If you’re an Australian resident, CGT applies to your assets anywhere in the world. For Norfolk Island residents, CGT applies to assets acquired from 23 October 2015. Foreign residents make a capital gain or loss if a CGT event happens to an asset that is 'taxable Australian property'.

 

If you need more convincing, let me know...

Edited June 14, 2019 by 4MyEgo