Downside Of Farang Land Purchases

[visionary]

Over the years I have heard many people married to Nationals from other countries complain that they bought additional land for relatives with the hope that additional land would result in higher family income that was never realised. Many recipients were already fully occupied with their prior vocational commitments. Many Nationals have also pointed out that many families sell what little land they have to raise capital for failed life changes that result in generations of descendants becoming condemned to lives of usurous tenancy because they are unable to raise sufficient funds to return to farm home ownership.

Throughout the world unfair rents are creating undue hardship for hundreds of millions of people. I am looking for feedback on the concept of concerned citizens and expats investing in lower than market residential rental properties. This form of investment would provide real income gain for extended families while helping relieve the burdens of the working poor. Reduced rents would provide opportunities to the disadvantaged that are too numerous to mention.

[Phrakhanong]

Our relatives in the Northeast were traditionally well off by local standards... owned several properties, had their own businesses and had a steady income. Two significant events changed their financial situation: The patriarch died suddenly from liver or kidney failure and the eldest daughter married someone that proved to be a leach and who ended up getting the family involved in loan sharks. As a result, they have already sold one property (just to pay off the loan sharks) and the second property may now need to be sold to satisfy further debts to loan sharks.

These events seem quite regular in this part of Thailand. For some reason the younger generations are less investment oriented, lazy and will take out loans for personal purchases such as cars, big nights out with friends, mobile phones etc etc. They end up in a debt trap.

Our current solution is to buy one of their properties off of them and allow them to continue living there (rent free... they just need to keep paying the utilities etc). They get the cash so they can pay off other loans. Further, they no longer have an asset which they are capable of losing when they obtain further loans (which they no doubt will). Sadly, this wont solve the real problem but at least it will partially secure their position, plus give me a place to stay whenever I am over that way.

[visionary]

Our relatives in the Northeast were traditionally well off by local standards... owned several properties, had their own businesses and had a steady income. Two significant events changed their financial situation: The patriarch died suddenly from liver or kidney failure and the eldest daughter married someone that proved to be a leach and who ended up getting the family involved in loan sharks. As a result, they have already sold one property (just to pay off the loan sharks) and the second property may now need to be sold to satisfy further debts to loan sharks.

These events seem quite regular in this part of Thailand. For some reason the younger generations are less investment oriented, lazy and will take out loans for personal purchases such as cars, big nights out with friends, mobile phones etc etc. They end up in a debt trap.

Our current solution is to buy one of their properties off of them and allow them to continue living there (rent free... they just need to keep paying the utilities etc). They get the cash so they can pay off other loans. Further, they no longer have an asset which they are capable of losing when they obtain further loans (which they no doubt will). Sadly, this wont solve the real problem but at least it will partially secure their position, plus give me a place to stay whenever I am over that way.

That is a very commendable action on your part. I wish that I had heard more similar stories throughout my life. If I had seen more of that kind of behaviour I would be a lot less cynical about the value of free market economies.When I first started work in construction in the early 70s it was quite common for concerned developers to invest in low return , below market construction ventures. With each passing year I see less evidence of sacrificial , conscientious investment. It used to be a part of our culture. I pray that it returns.

[Khun Jean]

What would be a better way is for the government to 'crack down' on these loan sharks.

Problem is most of these loan sharks are government employed in the first place.

After that a cleanup of the banks so that they do not issue creditcards to anyone asking for it.

Until then the problem of debts will always be around. Most people already own the land, it is the loanshark that is the biggest problem, and the borrowing for luxery items of course. But how do you stop people wanting some.

In the meantime, my wife now has all the land from her mother on her name. Her mother is worried that her daughters, of which some are already in debt, will just sell it. 'We' bought all the land from her other daughters, it was not that much money to begin with. In total 10 rai land, which now is used for rice planting. It gives the whole family rice for nothing because the yield is shared 50/50 with the one who works the fields. And always a place to return to when necessary.

I think this is happening a lot with mixed marriages, as i heard it happen many times.

[chownah]

I don't know what the rental rates are where you live but in my neighborhood you can rent a housle for 500 baht per month....doesn't seem usurous at all....I haven't checked the rate recently though...maybe it has gone up...I'll ask the wife when she returns.

[visionary]

I don't know what the rental rates are where you live but in my neighborhood you can rent a housle for 500 baht per month....doesn't seem usurous at all....I haven't checked the rate recently though...maybe it has gone up...I'll ask the wife when she returns.

I've spoken with a number of low income urban Thais that share basic housing units with 3 to 5 others. No one worker earns enough in their vocations to sustain private housing. In my Canadian city, slummy 1 bedroom apartments are renting for 1000 a month and more . Many workers don't make much more than that. In my city there are many minimum wage earners. Most of them do not earn enough to pay rent and utilities let alone buy groceries afterward. During the summer I delivered chinese food part time. I was stunned by the number of slummy apartments that had living rooms filled with mattresses.

[chownah]

I don't know what the rental rates are where you live but in my neighborhood you can rent a housle for 500 baht per month....doesn't seem usurous at all....I haven't checked the rate recently though...maybe it has gone up...I'll ask the wife when she returns.

I've spoken with a number of low income urban Thais that share basic housing units with 3 to 5 others. No one worker earns enough in their vocations to sustain private housing. In my Canadian city, slummy 1 bedroom apartments are renting for 1000 a month and more . Many workers don't make much more than that. In my city there are many minimum wage earners. Most of them do not earn enough to pay rent and utilities let alone buy groceries afterward. During the summer I delivered chinese food part time. I was stunned by the number of slummy apartments that had living rooms filled with mattresses.

Sounds like there is a big problem over there in Canada. Since you live in Canada why don't you solve your own problems over there.

By the way, I used to live in the US and many times I lived in shared housing situations that seem to be similar to how you describe the urban Thais which you have spoken with. If you can get with some people who have compatible life styles this can be a great deal and save you alot of money....and no matter how cheap the rent is you will save even more money if you only have to pay a fraction of the rent instead of all of it. It's nice to have lifestyle choices like shared housing.

Chownah

[thaigene2]

Our relatives in the Northeast were traditionally well off by local standards... owned several properties, had their own businesses and had a steady income. Two significant events changed their financial situation: The patriarch died suddenly from liver or kidney failure and the eldest daughter married someone that proved to be a leach and who ended up getting the family involved in loan sharks. As a result, they have already sold one property (just to pay off the loan sharks) and the second property may now need to be sold to satisfy further debts to loan sharks.

These events seem quite regular in this part of Thailand. For some reason the younger generations are less investment oriented, lazy and will take out loans for personal purchases such as cars, big nights out with friends, mobile phones etc etc. They end up in a debt trap.

Our current solution is to buy one of their properties off of them and allow them to continue living there (rent free... they just need to keep paying the utilities etc). They get the cash so they can pay off other loans. Further, they no longer have an asset which they are capable of losing when they obtain further loans (which they no doubt will). Sadly, this wont solve the real problem but at least it will partially secure their position, plus give me a place to stay whenever I am over that way.

This is eerily similar to a story involving my wife's former employer. The husband married into the family that had the land/businesses. He opened a karaoke joint, it went tits-up, (the guy was also a real butterfly according to my wife) then they had to sell a petrol station and a restaurant, and they eventually ended up with this one piece of land where they live. The matriarch just died recently..and now it looks like this remaining land will get split up into tiny chunks between the siblings. Before the patriarch died, he liked to gamble and was actually quite good at it - but that sent the wrong signals to the rest of the kids.

They are Isaan Chinese of course, but around 3rd generation I think. Just goes to show how an industrious migrant family that invests a bit of money, works hard, then watches the 2nd/3rd generation and their spouses piss it all away. Very sad.

[Sir Burr]

So, where's the downside for the farang?

[thaigene2]

I don't know what the rental rates are where you live but in my neighborhood you can rent a housle for 500 baht per month....doesn't seem usurous at all....I haven't checked the rate recently though...maybe it has gone up...I'll ask the wife when she returns.

I've spoken with a number of low income urban Thais that share basic housing units with 3 to 5 others. No one worker earns enough in their vocations to sustain private housing. In my Canadian city, slummy 1 bedroom apartments are renting for 1000 a month and more . Many workers don't make much more than that. In my city there are many minimum wage earners. Most of them do not earn enough to pay rent and utilities let alone buy groceries afterward. During the summer I delivered chinese food part time. I was stunned by the number of slummy apartments that had living rooms filled with mattresses.

Sounds like there is a big problem over there in Canada. Since you live in Canada why don't you solve your own problems over there.

By the way, I used to live in the US and many times I lived in shared housing situations that seem to be similar to how you describe the urban Thais which you have spoken with. If you can get with some people who have compatible life styles this can be a great deal and save you alot of money....and no matter how cheap the rent is you will save even more money if you only have to pay a fraction of the rent instead of all of it. It's nice to have lifestyle choices like shared housing.

Chownah

I'm not sure of his point either, and I don't know which city he is talking about.. But I reckon I'd rather be a Thai sleeping cheek-to-jowel on the floor of a Vancouver apartment, with free health care and free decent schooling for my kids, and abundant supply of Asian foods, than trying to struggle through life in some bleak eastern city in the Excited States of America..I'd take that over California too.

[visionary]

So, where's the downside for the farang?

[/quote

I'm going to answer Chownah's question at the same time.

Over the year's I've heard a lot of mourning from mixed marriage spouses about failed investments regarding agricultural land purchases for relatives overseas. I believe that low rent investment would have been a better choice for them. Below market rental investment is a win win situation for both the investors family and the working poor. As to the challenge to concern myself with Canadian issues , I do. Most of the issues affecting the working poor here are the same as there. 10% of my income goes to SE Asia , 10 % goes to Canadian social issues. As a lobbyist I am encouraging low rental investment on both fronts because it is a critical issue that is creating much suffering that is easily and profitably solvable. Every investment in low rental housing reduces overall rental demand thereby helping to reduce excess rents for all.

[Smithson]

So, where's the downside for the farang?

Over the year's I've heard a lot of mourning from mixed marriage spouses about failed investments regarding agricultural land purchases for relatives overseas. I believe that low rent investment would have been a better choice for them.

Any choice is bad, they are putting up money for something they can't own, doesn't take a economist to work out where the problem lies.