Life cycle of a high rise condominium in Bangkok?

[OneMoreFarang]

I am thinking about buying a condominium in Bangkok.

New units in new buildings are expensive, and old units in older building are cheaper. So far that makes sense.

 

In the moment I think that buying a unit in a older building and renovating that unit will still cost a lot less than a new unit in a new building.

But obviously it brings up the question: What will happen in the future?

Will the building be kept in a good condition and many owners will renovate or sell their units and new owners will then renovate them?

Or will more and more units just stay in a bad condition because nobody spends money on them. And if that happens with more and more units then there will be fewer people in the building and only people who want to rent cheap and from there it goes only down?

 

Is there something like a typical life cycle for condominiums in Bangkok (or in general)? 

What is important to look for in an "old" (maybe 20 to 30 year old) building? I.e. if the fresh water and waste water pipes were recently replaced and new lifts were installed does that make the building "like new"? Or what other big issues will happen when the building gets older and older?

Are there i.e. samples of building which are not inhabited anymore maybe after 20 or 30 years because main parts are defect and nobody is doing anything?

And what is the best way to estimate if a building will likely be in a reasonable condition in the future, maybe 10 or 20 years from now?

 

This is a drawing to illustrate the question. I guess with a condominium it is more difficult because of many owners.

 

 

[worgeordie]

I think they will all be still standing ,when you are gone, maybe that's

all you have to worry about, everything deteriorates with age ,the only

thing I have heard ,but no idea if true is wine improves with age.

I think older properties were built better, most of them, time has

given them time to settle ,so you can see any cracks.that may not

show up yet in more recently built Condos.

 

regards Worgeordie

 

[Peterw42]

I dont think you can define a typical life-cycle for a block, as many factors involved.

A good block can go bad and and bad block can be redeemed.

 

Fundamental to the life-cycle of any block is the condo management, and secondary is the type of block, investment, live-in etc.

 

Anywhere in the life-cycle of a block there are warning signs. Even early on there are things to look for as to the way the block is going.

 

Visiting a 5-10 year old block can be very enlightening. things like, did security stop you on the way in or is it an AirBnb free for all ? Is there a broken down noodle cart or obviously abandoned cars in the carpark. Are the garden/pool/common areas in good repair. Are there cats wandering around , Is all the equipment in the gym working etc etc.

What sort of people are coming and going ? Is the Condo office actively involved in rentals and sales ? (big red flag) 

 

You are correct in your thinking, there is some great value in a well maintained older block and its usually very easy to identify a well maintained block, and easy to identify a block going bad.

 

 

[OneMoreFarang]

1 minute ago, Peterw42 said:

Is the Condo office actively involved in rentals and sales ? (big red flag) 

Why is that a red flag?

I guess in a way they are always "involved". People who are interested can come and ask in the office which units are for and and sale.

What is the red flag part and why? Thanks. 

[Peterw42]

9 minutes ago, OneMoreFarang said:

Why is that a red flag?

I guess in a way they are always "involved". People who are interested can come and ask in the office which units are for and and sale.

What is the red flag part and why? Thanks. 

Mostly base on a few years of observations, I have bought and sold a few condos, wife has previously worked in a couple of condo offices and now does a bit of sales. Any block she/we have been involved with, that has gone bad, is invariably a block where the office (and the committee) spends all there time running a little real estate venture, and little to no time doing their actual job, looking after the condo block.

Under normal circumstances, (unless the developer is still involved) the condo office should have nothing to do with sales or rentals in a block. Even people like yourself consider it to be normal practice, its not.

The lift is broken in building 3, or a chance of a commission if I show someone through the condo in building 2, its just too much of a conflict of interest, owners end up wanting to be on the committee for no other reason than, to get a cut of the sales commissions etc.

In the absolute worst instance, the office starts using the condo staff (cleaners, gardeners, technicians etc) to maintain and renovate the condos they are renting and selling. 

 

It may not sound that important but its the first step in the chain of how/why a block goes bad.

[scubascuba3]

It depends on the condo, mine is 20+ years old and well looked after. Have a look around the condo block you like, see if maintenance is good, ask the office to see the most recent year end accounts. Check supplementary common fees paid, these are often hidden and people buy without realising how big they can be. Can be every year + normal common fees

[Logosone]

Very, very, wise to look at this issue. I remember staying at condo in Kuala Lumpur which must have been world class when it was built, just amazing facilities. However the whole place had deteriorated badly, tiles missing in the pool, 50% of all gym machines broken, media room unusable. I was there only 5 years after it was built.

 

Asians are fantastic at planning world class condos, however, not so good at calculating maintenance and maintaining these world class facilities when they are built.

 

What's said above is correct, it will depend on a case by case scenario, however, the period can be shorter than one thinks because condo management can be worse than one would imagine. What is for certain is that the building will deteriorate significantly. 

[Logosone]

I think one rule to add, the bigger the condo is with the more facilities, the greater the risk it will deteriorate badly. If it is a fairly small condo with limited facilities the more likely it will kept up better for longer. It's just easier and less expensive.

[AJBangkok]

My ‘hobby” if you want to call it that is buying condos in older buildings, renovating them, and then renting them out. 

The three most important factors I look at are location, size and price. I don't buy them to live in I buy them to rent out so I don't make personal compromises or over capitalize the renovation.

 

For location I look for places close to schools and within 1km of a BTS, generally the older buildings I look at are in sukhumvit between soi 1 and soi ekkamai, the closer to a school the better.

For size I focus on 3 bedrooms, size above 150 sqm. My rental target is families with kids. New condos are full of studios, 1 and 2 bedroom. New 3 bedrooms are rare, tiny and super expensive to rent. Families want living space so when they realise they are going to either have to compromise on price or space generally they’ll end up taking space over price. They will be less likely to care about the building exterior if the condo inside is renovated nicely. Which is what I focus on.

 

As for price the buying sweet spot is 50k -60k per square meter. Reno costs will run another 25k to 30k per square meter. I try to set my maximum total cost to 80k -85k per square meter after the reno. The new buildings around the condo generally sell for more than double that price.

 

For the reno, the biggest challenge is always reconfiguring the floor plans. The older buildings are usually horribly laid out and constrained by poles and toilet positions so when you select a unit you should count on making compromises so try to select the unit with the least amount of compromises.

You may think that 25-30k for a reno (including design) is expensive but In my experience we have had to take every condo we have done back to bare concrete, we have not salvaged anything. I spend extra money on the bathrooms and kitchens and usually include a few other features that the average rental doesn't have. We have never had a condo vacant more than 2 months even during covid.

 

A lot of folk are mentioning building upkeep, management and facilities. What I have noticed over the last 10 years of doing this is that sure the really cheap condos suffer from these problems to a varying extent, but that's the exact reason why they are so cheap, the flip side is that is that good location always sells, and over the years the supply of these bad condos in great locations for sale has been drying up, the new owners are renovating and spurring changes in the up keep, management, and facilities. In one building where we have 2 rental condos the average rental price has moved up 35% in the 3 years since we bought the first condo there. The committee has renovated the gym and pool area and this year will start renovating the common areas on each floor.  Yes the new owners will pay for these upgrades but in my case the special levy has worked out to less than 1/2 a months rent per year.

 

Buying a condo to live in is different than buying a condo to rent. You will be more willing to compromise on some things and less willing to compromise on others. Also you have to remember if you buy an older building and reno it, you won't be the only one doing it, you may be subject to construction noise for a very long time as so long as the condos are considered cheap there are going to be people like me buying and renovating around you. The positive thing is that all those people doing renos are increasing your property price by default through building gentrification.

 

[Ponlamai]

Also make sure you find out the height above sea level of the building at ground level because the paper that cannot be named has today mentioned BKK as sinking at a rate of 2-3 cm /year and none of it is far above the current but rapidly rising sea-level.

 

So my best guess is around 5 to 10 years before it all goes under!!

 

Good luck.

 

 

[Tubulat]

From my experience, one thing to consider is the maintenance fee.

Of course we all like to have a low m.f. but when it is to low, you'll get the problems as described above.

[Liverpool Lou]

23 minutes ago, Ponlamai said:

the paper that cannot be named has today mentioned BKK as sinking at a rate of 2-3 cm /year

An editorial in the Bangkok Post mentioned that study also.   

 

 

[OneMoreFarang]

1 hour ago, AJBangkok said:

You may think that 25-30k for a reno (including design) is expensive but In my experience we have had to take every condo we have done back to bare concrete, we have not salvaged anything.

Thanks for all the info.

With all your experience I would have thought you are able to renovate for less than that.

If you like tell me/us: Are you hiring one company do do everything for you from design until ready to rent out?

Or do you have a designer and then different contractors?

Do you always use the same people and/or company over the years?

I guess it's possible to do the renovation less expensive than that still with good quality. Or not?

Is there any specific renovation company which you like to recommend? And if, why do you prefer that company?

[Paul DS]

Sorry but when I read this I am amazed!

 

Thais do not maintain anything, from Cars to home to apartment buildings.

 

They are only repaired if they are broken and needed!

 

Condo etc:

Look at the external appearance, look for cracks covered over, very common.

Look for external pipes leaking and never fixed.

Look for blocked drains.

Check hallway wiring to see if safe and working

Has it got WIFI

Check the elevators, they are never serviced, merely repaired when not working.

The condo itslef, look for signs of above leakage, check for drains smelling

Check windows condition

Check wiring  safety cut outs and sockets actually work

Check uneven flooring

Check walls are not blowing

building Security!

Electric / Water meters

Do they still allow Gas usage! (Should be not allowed)

Check many times noise levels

Check about animals

Allocated parking spaces?  Abandoned vehicles?

Check Condo fees accounts / balance / and who's on condo management team

Foreign quota or Thai quota purchase?

 

All seem typical items for check, but in Thailand they are most often neglected.

 

Personally, I only buy 5 year old condo's as most issues are not becoming an issue yet.

[OneMoreFarang]

35 minutes ago, Paul DS said:

Thais do not maintain anything, from Cars to home to apartment buildings.

 

They are only repaired if they are broken and needed!

Your list is interesting. Thanks. But I don't agree with your statement above.

In some buildings the management cares. And the committee cares. I don't know how many buildings have a proper management and how many not. But telling us that Thais do not maintain anything is just wrong.

[newnative]

      Some good information has been posted already.  My partner and I have owned condos in at least 15 different condo projects these past 10 years.  Most have been in Pattaya but one was in Rayong and two in Bangkok.  We've owned at new projects and also at what might be the oldest project in Pattaya, built in the early 1980s.  

     Like one of the above posters, our hobby is buying a condo and renovating it--but we do it to sell rather than rent.  We did 7 View Talay shells.  We have bought older condos in bad shape but we have also bought new. 

    One of our most successful projects was a new high-floor 2 bedroom seaview condo at Centric Sea.  We tore out the brand new but not good kitchen and ditched most of the brand new but not good furniture.  Did custom everything, including the kitchen and most of the furniture, made the condo look and function much better, and then sold it and moved on to the next project.

     Our latest 2 projects involved a 2013 highrise condo in Bangkok and a 2006 highrise seaview condo in Pattaya.  Both are in excellent locations--the Bangkok one is very close to the Phetchaburi MRT.  With both, we tweaked the baths and some other things and totally re-did the kitchens.     

      Standard kitchens in condos often don't hold up well.  Even though the BKK kitchen was new in 2013, the counter was cracked, the laminate was chipped and had not withstood water, the appliances were not good, and the kitchen layout, itself, was not ideal.  And, it lacked things like undercounter lighting and built-in appliances. The fridge was small and not housed in a fridge cabinet; it was just standing there as an afterthought. (Generally, if you can see the side of your refrigerator your kitchen is not designed very well. )

     New condo projects, even some expensive ones, have smaller unit sizes but a large number of amenities.  Older projects usually have larger unit sizes but fewer amenities.  Our Bangkok condo sort of falls in-between.  It has some nice amenities like sky lounge and sky library, big pool and gym, and very good garage parking.  But, it lacks the very  latest amenities some of the new condos sport.  The smallest unit is 42sqm, most are 48 to around 100 sqm, with a few very large condos. 

    The Pattaya project's smallest size is 64sqm.  Being older, it does not have a sky lounge or sky library.  It does have very good gym facilities, a big pool, nice lobby, a regular library, and very good garage parking.  For us, a bigger condo with just those amenities suits us.  Others might prefer a smaller condo that has things like a golf simulator, outdoor theater, and the newest thing, 'co-living spaces'. 

    The good news is, despite the stories of poor maintenance, all the projects we have owned at are still functioning--none has reached the end of their 'life cycle'.  I expect all will keep on keeping on.  My Pattaya condo just completely redid the pool and the decking.  My Bangkok condo is currently being painted and the elevators were recently redone. 

     In the OPs shoes, I would first choose the area of BKK you want to live in.  Then search what is available.  Take your time and do your homework.  Look at financials, if possible, and talk with some owners if you can.  Mostly, though, use your eyes and look at everything.  Visit a few times and check the pool each time, the state of the gym, the cleanliness and the wear and tear on everything, and so on.  Look at the condo units, themselves--especially the layouts--and see which works best for you.  

     With the advent of Airbnb, my partner and I would not buy a condo to live in at a project having units of less than 40sqm or in a project of over 1000 units.  I  think these types of projects lend themselves to owners buying multiple small hotel-like units and illegally renting them daily.  We don't want to live in a hotel.   Good luck and happy hunting.

[AJBangkok]

5 hours ago, OneMoreFarang said:

Thanks for all the info.

With all your experience I would have thought you are able to renovate for less than that.

If you like tell me/us: Are you hiring one company do do everything for you from design until ready to rent out?

Or do you have a designer and then different contractors?

Do you always use the same people and/or company over the years?

I guess it's possible to do the renovation less expensive than that still with good quality. Or not?

Is there any specific renovation company which you like to recommend? And if, why do you prefer that company?

 

[champers]

On 5/20/2021 at 11:32 AM, Peterw42 said:

Mostly base on a few years of observations, I have bought and sold a few condos, wife has previously worked in a couple of condo offices and now does a bit of sales. Any block she/we have been involved with, that has gone bad, is invariably a block where the office (and the committee) spends all there time running a little real estate venture, and little to no time doing their actual job, looking after the condo block.

Under normal circumstances, (unless the developer is still involved) the condo office should have nothing to do with sales or rentals in a block. Even people like yourself consider it to be normal practice, its not.

The lift is broken in building 3, or a chance of a commission if I show someone through the condo in building 2, its just too much of a conflict of interest, owners end up wanting to be on the committee for no other reason than, to get a cut of the sales commissions etc.

In the absolute worst instance, the office starts using the condo staff (cleaners, gardeners, technicians etc) to maintain and renovate the condos they are renting and selling. 

 

It may not sound that important but its the first step in the chain of how/why a block goes bad.

In my condo complex in Pattaya the Sales Office is separate from the Juristic (general site admin) Office. This division of labour seems to work very well.

[AJBangkok]

Sue you can do it cheaper and I should have mentioned that the 25-30 baht per sqm reno cost includes buying the rental furniture. Also you have to consider that I am taking the condo back to bare concrete so it's including, wiring, plumbing, floors, ceilings, lights built ins, airconditioning etc etc and most of the time new windows. 

 

I do a custom kitchen which usually costs 400k - 500k for the cabinets and counter tops/backsplash. Built in appliances, oven, microwave, induction hob, fridge, sink, tap and dishwasher run about another 130-150k. I use tekka and bosch.

 

I use the same designer and construction company for all the units. I use the same kitchen company for all the kitchens and I use the same air con company for all the air con. I always do ducted air con so that's about 150k more than wall units.

 

The construction company i use does the demo and manages all the trades like the air cons, windows kitchen etc. They are probably a little more costly than some companies but they do a full turnkey reno and always come back to fix any problems even after 5 years. They have plenty of work and I am waiting for them to start my next project so i’d prefer not to give their name at this time .

 

For the furniture I get everything from people who do drop shipping for Chinese factories. It's always 30-45day preorder but the suppliers I use have good quality, it lookes expensive but it's normally 50% of the cost of buying similar quality furniture here.

 

As I said my numbers reflect going back to bare concrete. If you don't need to then it could be significantly cheaper to reno but that will be reflected in the selling price. The condos I buy are not in any condition to live in, they are usually rife with termite damage, mould, horrible layouts and generally falling apart. They need a total rebuild and that's reflected in the price they sell for. There are plenty of condos in better condition for 70-90k per square meter but usually they still need some refurbishment. You won't get a new kitchen, appliances, air cons etc they will be dated. I prefer nasty ones as know after I finish everything will be brand new and there won't be any major surprises so at the end of the day I am getting a brand new interior at the same or cheaper price than what a condo in decent nick sells at in the same building. 

[wordchild]

FWIW, in terms of a building to live in, my list would be

1) 10-15 years old. Older buildings the design tends to be poor, much newer and the space starts to get cramped.

2)Low rise or, at least , not too many units. good outdoor common area space ie gardens or play area for kids. OK management fees per unit  will be higher but likely the the building will be better looked after, and a better environment, especially for a family.  

3)Central BKK ie Sathorn, Chidlom/Ploenchit ,Sukhumvit no further than Thong Lor.

4)Majority of the units are owner occupied, not common but there are some condos  where this is the case.

5)Farangs on the committee. One Thai investor told me that he only buys units in condos where there is active farang involvement on the committee. His view was that they care more and will focus on long term maintenance of the building. 

6)In general  self managed buildings (with an active committee) are better than the Plus/CBRE duopoly. Condo management is not the most exciting career, in terms of progression, and both CBRE and Plus seem to actively rotate their good people.

[wordchild]

21 minutes ago, AJBangkok said:

Sue you can do it cheaper and I should have mentioned that the 25-30 baht per sqm reno cost includes buying the rental furniture. Also you have to consider that I am taking the condo back to bare concrete so it's including, wiring, plumbing, floors, ceilings, lights built ins, airconditioning etc etc and most of the time new windows. 

 

I do a custom kitchen which usually costs 400k - 500k for the cabinets and counter tops/backsplash. Built in appliances, oven, microwave, induction hob, fridge, sink, tap and dishwasher run about another 130-150k. I use tekka and bosch.

 

I use the same designer and construction company for all the units. I use the same kitchen company for all the kitchens and I use the same air con company for all the air con. I always do ducted air con so that's about 150k more than wall units.

 

The construction company i use does the demo and manages all the trades like the air cons, windows kitchen etc. They are probably a little more costly than some companies but they do a full turnkey reno and always come back to fix any problems even after 5 years. They have plenty of work and I am waiting for them to start my next project so i’d prefer not to give their name at this time .

 

For the furniture I get everything from people who do drop shipping for Chinese factories. It's always 30-45day preorder but the suppliers I use have good quality, it lookes expensive but it's normally 50% of the cost of buying similar quality furniture here.

 

As I said my numbers reflect going back to bare concrete. If you don't need to then it could be significantly cheaper to reno but that will be reflected in the selling price. The condos I buy are not in any condition to live in, they are usually rife with termite damage, mould, horrible layouts and generally falling apart. They need a total rebuild and that's reflected in the price they sell for. There are plenty of condos in better condition for 70-90k per square meter but usually they still need some refurbishment. You won't get a new kitchen, appliances, air cons etc they will be dated. I prefer nasty ones as know after I finish everything will be brand new and there won't be any major surprises so at the end of the day I am getting a brand new interior at the same or cheaper price than what a condo in decent nick sells at in the same building. 

I have only bought condos here to live in , not for investment. But i would very much agree with the above. The fit outs of condos in Thailand tends to be v poor. From my experience best  to strip it out and redo yourself.

[onebir]

On 5/20/2021 at 6:43 AM, Peterw42 said:

Is the Condo office actively involved in rentals and sales ? (big red flag) 

Why... too many short term tenants?

[wordchild]

always remember this is not London Geneva  or New York. Property values will never really  appreciate over very the long term here. (my opinion)

Even the best buildings in Bangkok will not look great in 50/70 years time.

one huge issue in Bangkok is the very limited planning controls. 

The environment around your home can change dramatically. One year you may have a idyllic view over a collection of high end houses and their gardens, a year later you could be looking at a construction site as a new high rise grows up next door  to block out your view. Exactly this recently happened to a friend of mine. The great western cities have much stricter planning so property in these cities is always inherently more valuable. 

I own in Bangkok and am happy with what we have here , but i would certainly never argue that its better than renting.

[grin]

Agree with the post about the environment changing. When I rented a condo in Bangkok about 20 years ago I had a nice view from the balcony. A couple years later my view was another balcony about 5 meters away. So maybe consider whether or not the neighboring area seems like it could be ripe for redevelopment.

[OneMoreFarang]

11 hours ago, grin said:

Agree with the post about the environment changing. When I rented a condo in Bangkok about 20 years ago I had a nice view from the balcony. A couple years later my view was another balcony about 5 meters away. So maybe consider whether or not the neighboring area seems like it could be ripe for redevelopment.

That reminds me of a guy who lived here since forever.

He told me when he arrived in Bangkok he lived in the top floor of a 5 story building in Soi Suanplu (old immigration). He could see the river from his apartment - long time ago. 

[Paul DS]

21 hours ago, OneMoreFarang said:

Your list is interesting. Thanks. But I don't agree with your statement above.

In some buildings the management cares. And the committee cares. I don't know how many buildings have a proper management and how many not. But telling us that Thais do not maintain anything is just wrong.

Yes you are quite correct, it's finding a place thats the problem, that's why my list is long....if all those questions are answered (and no cracked walls) then that's a start!

 

[Liverpool Lou]

On 5/23/2021 at 1:06 PM, Ponlamai said:

the paper that cannot be named has today mentioned BKK as sinking at a rate of 2-3 cm /year

There are no newspapers that "cannot be named" here.

[OneMoreFarang]

59 minutes ago, Liverpool Lou said:

There are no newspapers that "cannot be named" here.

There are only newspapers that cannot be linked here. ???? 

[Heng]

On the maintenance side, I'd cut out condos that have rooftop pools.   Just asking for a harder and harder to maintain task in the long run for all the co-owners.   Even more fun if you have a unit on the few floors right underneath it.  

[OneMoreFarang]

8 hours ago, Heng said:

On the maintenance side, I'd cut out condos that have rooftop pools.   Just asking for a harder and harder to maintain task in the long run for all the co-owners.   Even more fun if you have a unit on the few floors right underneath it.  

That's interesting. I think there are only few buildings which have rooftop pool and I always thought: why?

But thinking about maintenance hassle I guess you are right. There is a reason for that.