Should I buy a condo or rent?

[cowboys2008]

I'm retiring soon. Should I buy a condo for about $125,000 or rent?

[G_Money]

How long is a piece of string?

 

No perfect answer for your question.  Each person’s situation is different.

 

For me renting is the answer in Thailand.  Owning only in the USA.

 

For whatever reason being able to grab my passport and walk away on short notice if needed.  PRICELESS!

 

Even forfeiting my Vespa 150 and my wardrobe.

[KhunLA]

How long have you lived in TH, and how many different places ?

 

Where are you located now ?  Just noticed HH/Cha Am area.

 

How long do you plan on owning it ?  More than 12 years to be even close to a financial break even, relative to other expenses.

 

$125k USD = ฿4.3M ... or ฿30k monthly rent for 12 years.  Of course your age will be a factor.  What it will be worth in 12 yrs, along with condo fees.   If getting full ROI, then very nice, you've lived here 12 ish year, rent free.  Even if market drops 50%, still should beat rent.

 

3 basic question.  Don't expect to make a profit, if and when selling, especially if owning 5-10 yrs.  RE is an excellent investment, IF, it has land, as that seem to be the only part of it that appreciates.   I've had 3 house builds, sold 2, and only the land appreciation gave us any return/profit when selling.   Profit & living basically rent free, so all good.

 

Location location location of course, but if your budget is $125k USD, then you won't be in any primo, appreciating location, usually.  Or it will be rather small.  Can you do small, and have you done small yet.  I would think it gets old very fast.

 

Excellent advice below, and yes, definitely rent for a year, at any place you plan on buying in.

[BKKKevin]

Most buildings have rentals available… I would rent in a building before buying… You can see if you really like the building and neighborhood… While renting you also get to scope out all the units available for sale and most likely get a better deal… 
 

Remember it’s easy to buy but not so easy to sell…

[BKKKevin]

Right now a 10 year US Treasuries give you a 4.5% return…

That translates to about 15,000 baht/month for your $125k…

My bet is any ~$4 million baht condo you find to buy will rent for less than 15,000 baht/month…

[quake]

Op, if you buy, make yourself aware of the tax rules for bringing money in.

        and how to avoid a large tax bill. plenty of info on threads on this forum.

 

Ps  if your old, rent if still young buy. bought my first condo in 2000

      still have it, and it  owes me nothing, just my take on it.

 

 

 

[novacova]

12 hours ago, cowboys2008 said:

I'm retiring soon. Should I buy a condo for about $125,000 or rent?

Rent. Give it some time before you buy.

[jas007]

For a retiree, renting is probably the way to go, financially.  Can. it work out? Sure.  But you could also lose some money or end up in a place you don't actually want to be.  

 

I'm 73 and I can't imagine purchasing a place and actually having it work out, financially. The best case realistic scenario: I eventually get my money back minus the upkeep costs and the lost opportunity cost of sinking all that cash into a property. Still, I'm still thinking about buying something, just for the hell of it.  It would be fun to have a place that I could furnish just the way I wanted. Of course, size is a consideration. My current rental is a 39 square meter studio.  Renting is one thing, but I would never buy anything this small.  

[Wuvu2]

16 hours ago, BKKKevin said:

Right now a 10 year US Treasuries give you a 4.5% return…

That translates to about 15,000 baht/month for your $125k…

My bet is any ~$4 million baht condo you find to buy will rent for less than 15,000 baht/month…

 

I couldn't agree more. I've paid rent for the last 14 years and left my cash invested in the S&P. The S&P is up over 450% and my cash has tripled even after paying rent. Thai real estate values have gone sideways at best. 

 

The Thai real estate market is bizarre. Sales data is not public info so there's no way to estimate comparable values, and most farangs must pay all-cash which makes little sense to me. I've been very happy with my decision to rent.

[Shutterbug Guy]

Rent first and get to know the area and the condo I've rented in different places over a half dozen years or so before buying.  Once you purchase, you're stuck; be sure it's the one that works for you.  

 

I bought a nice sea-view unit that I will never resell; I will only give it back to my family upon my eventual demise.  

[Patong2021]

rent.

[edwardflory]

My opinion: LOCATION

 

Have a older Thai condo in BKK area, mortgage & fees ( 16 years and still paying ) total 2050bt a month. around 3000 people as neighbors in 8 buildings of 5 stories

 

Have house in wife's home village, old, on stilts, and village in the middle of nowhere - 1 hour to a major shopping area the OTHER side of the mountain.

 

LIVING in KORAT,

2 BR house with indoor kitchen, fenced yard, veggie garden, gated community. 4 MAJOR stores within 10 minutes, with Immigration 15 minutes away, can't count mom & pop stores and 7-11 under 10 minutes. Fishing lake 2 minutes -20 minutes from center city Korat.

4500bt a month.

 

[thailand49]

To me there is a right answer!  Rent first, take it slow, when you do find out how many units are owner occupied how many owners aren't paying their monthly dues and what management or association is doing. They should freely provide you with a monthly statement as to what is collect and how it is spent.

 

Renting allows you to see first hand units are dime a dozen, until you know don't bring all your worldly goods with you many later bitch and complain because they got too much stuff. Don't rent too high and try to obtain an end unit thus you only need to deal with one bad problem.

[khunPer]

19 hours ago, cowboys2008 said:

I'm retiring soon. Should I buy a condo for about $125,000 or rent?

In general buying one's home is a better investment than renting, but there are a number of factors to consider; hereunder that it's in Thailand.

 

I'm in level with @KhunLA's comment above.

 

The economy can simply be based on your initial investment, loss of interest, and ongoing costs for share of maintenance. This compared to renting something like the condo of interest in same neigerbourhood.

 

If you look at an around 4 million baht investment rent would typically be in the area 30,000 to 40,000 baht per month. Subtract the monthly maintenance fees for an owned condo and deduct the relative interest loss per month of 4 million baht invested in something that could pay you 4% p.a. – which could be around 13,000 baht per month – then you have the base famount to divide into your investment. This will how you how many year you need to own the condo compared to renting, before it's a gain. You might typically end up with between 15 and 25 years.

 

Resale of conso might not be a gain in Thailand; however, widely dependin on location, as everywhere else. You might be lucking to get the initial investment back, but could both face a small loss or some capital gain. In Thailand it's mainly the land under the building that increase in value, while the building decrease it's value over time.

 

Being at retirment age a 20-25 years planning ahead might be a bit long; however, depending if Thai-retirement-visa age – i.e., 50 years – or Western home country's retirement age at aroung 65-70 years of age. Especially of re-sale after limited period might not include a gain, but could even be a small loss.

 

In addition, about the neighbourhood, are you sure you would stay there for the next perhaps 20 years?

[Gottfrid]

It´s just to buy it. Too cheap here anyway. 🙂 

[Albo]

I see no reason a single man should buy a condo with its many issues in Thailand. Gross rent multiple is insane in the country. Take advantage of it .. rent.

[bbi1]

20 hours ago, cowboys2008 said:

I'm retiring soon. Should I buy a condo for about $125,000 or rent?

Rent. Only a fool would buy in Thailand. Keep your property investments overseas.

[Albo]

2 minutes ago, Gottfrid said:

It´s just to buy it. Too cheap here anyway. 🙂 

 

It's not cheap at all. The prices are cheap because you're not getting any sqm. Then consider the build of the condo and building as well as all the vagaries. Then of course the depreciation.

[Gottfrid]

1 minute ago, Albo said:

 

It's not cheap at all. The prices are cheap because you're not getting any sqm. Then consider the build of the condo and building as well as all the vagaries. Then of course the depreciation.

I guess that depends on the wallet size. 😂

[bbi1]

3 hours ago, Wuvu2 said:

 

I couldn't agree more. I've paid rent for the last 14 years and left my cash invested in the S&P. The S&P is up over 450% and my cash has tripled even after paying rent. Thai real estate values have gone sideways at best. 

Exactly. Idiots buy in Thailand. You can rent the same place in Thailand for the same rentaly price as 10 years ago too.

[Albo]

1 minute ago, Gottfrid said:

I guess that depends on the wallet size. 😂

 

I guess it depends on understanding the value of things in the world 😉

[bbi1]

19 minutes ago, khunPer said:

If you look at an around 4 million baht investment rent would typically be in the area 30,000 to 40,000 baht per month. Subtract the monthly maintenance fees for an owned condo and deduct the relative interest loss per month of 4 million baht invested in something that could pay you 4% p.a. – which could be around 13,000 baht per month – then you have the base famount to divide into your investment. This will how you how many year you need to own the condo compared to renting, before it's a gain. You might typically end up with between 15 and 25 years.

You gotta be kidding. More like 15k baht per month to rent a $4 million baht valued property.

[Albo]

11 minutes ago, bbi1 said:

You gotta be kidding. More like 15k baht per month to rent a $4 million baht valued property.

 

Not in BKK.

 

16-19k.

 

1+1, 44-48.5swm, reasonable view, higher floor, BTS MRT.

 

I'm living in 48.5sqm, 1+1, 300m MRT. Floor 5. View unobstructed. 13k. Owner Value maybe M3.0-3.1.

[Celsius]

6 minutes ago, Albo said:

 

Not in BKK.

 

16-19k.

 

1+1, 44-48.5swm, reasonable view, higher floor, BTS MRT.

 

My landlord is selling the condo we are renting for 7 million baht. Our rent is 18,000b a month. Let's assume he is willing to take a catastrophic 2 million baht loss, I don't see how anyone can come ahead even with 5 million investment in this depreciating asset. Condo fees are 45b per square meter, so that's another 2000b a month expense for the landlord. not to mention twice a year Aircon cleaning and all the eventual repairs they have to deal with.

 

I will leave this amateur investing to HK, Taiwanese, Singaporean and Chinese landlords. They are masters at losing money.

 

 

[Albo]

Just now, Celsius said:

 

My landlord is selling the condo we are renting for 7 million baht. Our rent is 18,000b a month. Let's assume he is willing to take a catastrophic 2 million baht loss, I don't see how anyone can come ahead even with 5 million investment in this depreciating asset. Condo fees are 45b per square meter, so that's another 2000b a month expense for the landlord. not to mention twice a year Aircon cleaning and all the eventual repairs they have to deal with.

 

I will leave this amateur investing to HK, Taiwanese, Singaporean and Chinese landlords. They are masters at losing money.

 

 

 

Yeah, I'm certainly not debating that.

 

The only reasonable reason imo to own a condo is for it to be an asset you can leave to your wife. You also gain the benefit of having something solid beneath you. I would pay no more than 4 million for a condo that's probably listing now for 5M. Better still would be something around 3.5M purchasing for something around 3. Again, safety and security for the wife.

 

Celsius - You are getting a fantastic deal. But it's very likely it's not worth anything close to 7M.

[Crazy Noobie]

I say RENT and don't buy. The only time I would buy in Thailand is if I was going to leave my place to my Thai wife or girlfriend. It usually takes over 10 years before you even break even. Also if you want to sell it years later you will not make a profit, as no one wants a "used" condo when there are so many brand new ones on the market. So rent and you will have more freedom to move whenever you want to a better area.

[mokwit]

A major consideration in buying or not is how soon you may have to sell, because a material haircut to shift it is likely. If you think your company will move you in 2 years type considerations. Also visa security.

[Celsius]

13 minutes ago, Albo said:

 

 

 

Celsius - You are getting a fantastic deal. But it's very likely it's not worth anything close to 7M.

 

not today, but when it was built in 2018 the room was selling for close to 7 million. 

 

Another reasonable reason to own is to claim it and decorate it to your own comfort and taste and avoid the stress of signing a lease. Agreed. If I was planning to die in Thailand I would just let wife buy a house and not deal with a bad condo management.

 

What irritates me here is that you truly only own your unit.... almost feels like a prison when your keycard/fingerprint lets you access only your floor and common areas. I have to fingerprint myself 8 times every time I get Grab. Once to leave the floor (my facilities are on the same floor I live), once to take me to ground floor, once to exit the elevator lobby (or garage) once to exit the building. Repeat on the way back.

 

I am surprised they didn't install fingerprint to open a garbage chute.

[mokwit]

9 minutes ago, Celsius said:

What irritates me here is that you truly only own your unit.... almost feels like a prison when your keycard/fingerprint lets you access only your floor and common areas. I have to fingerprint myself 8 times every time I get Grab. Once to leave the floor (my facilities are on the same floor I live), once to take me to ground floor, once to exit the elevator lobby (or garage) once to exit the building. Repeat on the way back.

Agree, that sounds a bit much - maybe facial recognition would be better, but without personal ID controls you have all kinds of strangers wandering around, often after having got in with a copied key card.

[bbi1]

1 hour ago, Celsius said:

Condo fees are 45b per square meter, so that's another 2000b a month expense for the landlord. not to mention twice a year Aircon cleaning and all the eventual repairs they have to deal with.

 

 

Does a landlord usually pay for aircon cleaning or is this something the tenant pays for usually?