Why do some people say buying a leasehold villa in Thailand is not a good investment

[rikiderorck]

Hi folks,

A foreigner can buy a house in Thailand but not the land, I believe. Many villas are sold to foreigners with a 30-year land lease.so basically guys I am trying to understand what the problem is with this kind of deal and why some say it is not a good investment.

If the lease ends after 30 years and the landowner does not agree to renew it, I think the foreigner might lose the right to use the land. But I am not sure. Can the landowner ask the foreigner to leave. Can the house still belong to the foreigner if it stays on the land. Can the foreigner remove or destroy the house. Can the landowner use the land while the house is still there.

Is it possible to include something in the contract that protects the foreigner after the 30 years. Would a clause asking for automatic renewal mean anything legally. Or is it always up to the landowner?

I read that this is considered risky or not a good investment, but I want to understand why in legal terms. Please correct me if I am wrong about anything.

[cjinchiangrai]

4 minutes ago, rikiderorck said:

Hi folks,

A foreigner can buy a house in Thailand but not the land, I believe. Many villas are sold to foreigners with a 30-year land lease.so basically guys I am trying to understand what the problem is with this kind of deal and why some say it is not a good investment.

If the lease ends after 30 years and the landowner does not agree to renew it, I think the foreigner might lose the right to use the land. But I am not sure. Can the landowner ask the foreigner to leave. Can the house still belong to the foreigner if it stays on the land. Can the foreigner remove or destroy the house. Can the landowner use the land while the house is still there.

Is it possible to include something in the contract that protects the foreigner after the 30 years. Would a clause asking for automatic renewal mean anything legally. Or is it always up to the landowner?

I read that this is considered risky or not a good investment, but I want to understand why in legal terms. Please correct me if I am wrong about anything.

The end options are always the sticking point. You can have automatic renewal but a renewal with notice is probably better and you need to define the payment terms. A renewal that costs 50 million, is not a renewal.

 

A bigger problem is what happens on a deed transfer. Does the new owner need to continue the lease? Selling the property to family and evicting you is a real possibility.

 

When the contract is registered, you effectively have a lien on the property. You should have approval on any transfers. Do nothing without an independently translated contract.

[KhunLA]

Would you build a house on land you didn't own in your home country ?

 

Why would you buy a house on land you didn't own ?  End of the lease, you no longer have access to your house.  If I was the land owner, I'm thinking, I (or kids) get a free house in 30 years.  Why would I renew, if your are even still there or alive.

 

How old are you, and do you really want to be stuck with a 30 year lease?  

 

Condo is the way to go, if you want to own.   Although with your ignorance (not being insulting, just factual), you really should rent for a few years.  Much safer with options to up & move, for any reason.

 

If I wasn't extremely experienced in RE, before coming to TH, no way would I have bought or built anything in TH, the first 5+ years I was here.

@rikiderorck