Need An Advise

[eladblum]

I was offered to buy a 14 rai plot (10 rai of lamyay trees and 4 rai empty) in chom thong at the price of 500K as a wedding present.

What do you think?

How much money can get from selling lamyay?

Could i sell the land or part of it in the future for a bigger price? (although i'm planing to stay there forever)/

[lamphun]

Chomtong is a long way from Chiang Mai, but 500K for 14 rai isn't expensive.

[thedi]

35K/rai may be the price you will have to pay, if you really want this land. You could say: this may be a going rate, considering that there is farang money involved.

There is nothing like a 'reasonable' or 'accepted' price for land in Thailand. It all depends on how much the seller needs cash and how much the buyer wants the land. This may make a difference of a factor 10 (10K to 100K/rai of farmland). Naturally land on a road has a better value, but the main point is: how much do you want it. If there is 'farang money' involved, the price is higher.

This is all true for you, when you want to buy it now, and will be true again, when a later owner wants to sell it. About selling it later: you should face the fact, that this will be hardly your decision. The land will not be yours: you gave it away as a present. In fact, from the legal point of view, you never owned it, you just gave somebody the money to buy it.

I guess you will never make any profit with farming on that land. If you take just a base of 4% interest for your investment, this would amount to 20K/year. This would be the cost of your invested capital as we calculate in the west. Add to this salaries, costs of transport etc. Naturally what you get for the fruits is not the price on the market in Chiang Mai. Just as an example: Durian go as low as 5 B/kg at the farm (30-60B on the markets), rice (kao niow, pluak) 10 B/kg from the farm against 29 B (kao sarn, which is maybe 20% loss of weight) on the marked. Fruits may be more difficult to sell, because you can not keep them (like rice). So as an investment for a business, 35K/rai for fruit plantation land may be too much, if you want to calculate like a European farmer. But as I said in the beginning: you may not find cheaper land. Land tends to be overpriced in Thailand.

On the other hand, considering that it is a wedding present, you may set other priorities ...

Go on, enjoy life! It's not all about money... it's life, it's fun, it's joy... enjoy it!

Good luck

Thedi

Edited August 19, 2007 by thedi

[mikez]

35K/rai may be the price you will have to pay, if you really want this land. You could say: this may be a going rate, considering that there is farang money involved.

There is nothing like a 'reasonable' or 'accepted' price for land in Thailand. It all depends on how much the seller needs cash and how much the buyer wants the land. This may make a difference of a factor 10 (10K to 100K/rai of farmland). Naturally land on a road has a better value, but the main point is: how much do you want it. If there is 'farang money' involved, the price is higher.

This is all true for you, when you want to buy it now, and will be true again, when a later owner wants to sell it. About selling it later: you should face the fact, that this will be hardly your decision. The land will not be yours: you gave it away as a present. In fact, from the legal point of view, you never owned it, you just gave somebody the money to buy it.

I guess you will never make any profit with farming on that land. If you take just a base of 4% interest for your investment, this would amount to 20K/year. This would be the cost of your invested capital as we calculate in the west. Add to this salaries, costs of transport etc. Naturally what you get for the fruits is not the price on the market in Chiang Mai. Just as an example: Durian go as low as 5 B/kg at the farm (30-60B on the markets), rice (kao niow, pluak) 10 B/kg from the farm against 29 B (kao sarn, which is maybe 20% loss of weight) on the marked. Fruits may be more difficult to sell, because you can not keep them (like rice). So as an investment for a business, 35K/rai for fruit plantation land may be too much, if you want to calculate like a European farmer. But as I said in the beginning: you may not find cheaper land. Land tends to be overpriced in Thailand.

On the other hand, considering that it is a wedding present, you may set other priorities ...

Go on, enjoy life! It's not all about money... it's life, it's fun, it's joy... enjoy it!

Good luck

Thedi

Thedi,

That's good advice and a great perspective on life.

Michael.

[chownah]

Yeah, great advise!!!

Want to loan me a couple million baht....go ahead....it's life...it's fun...it's joy.....it's hahah aha h aha haha hahah ahhahaa

[Loom]

In addition to asking the seller, you can check the Office of Ag Economics website. some statistics there show average yield per rai and price per kg. According to this, at the low end of the range you might be looking at 500-600 kgs per year at bt12-16 per kg or Bt6000 per rai. I'd recommend a trip to the local land department to find out about the level of registration and what that means for the owner. I'd also ask around to see if there's any other land for sale in the same area (or other recent transactions) and the price.

[chownah]

According to this, at the low end of the range you might be looking at 500-600 kgs per year at bt12-16 per kg or Bt6000 per rai

I think this year the bulk of the lamyai harvest went for under 10 baht per kilogram....by "under 10 baht per kilogram" I mean somewhere under 10 baht....wasn't it somewhere in the 5 baht per kilogram area? Also, from what I have read, lamyai trees will have one bad year every three or four years meaning that you will have no income for those years I think...but I'm not sure as I have never raised lamyai other than a few trees around the house.