Buying To Rent Out?

[YoungFarangNa]

In the USA, you can buy a house for 10% down, rent it out, perhaps the rent pays your mortgage payments, or perhaps you lose a little bit. In time, you can you sell the property, pay off the mortgage and make a profit. So if the property was $250K, you invest $25K and if it goes up to $300K you can sell at a $50K profit minus fees and a slight loss on each mortgage payment. You return somewhere in the 150% range on your investment. If you sell the house in 5 years, you don't pay tax on your gains.

Now lets look at Thailand, you buy a property for $250K (8.5m Baht). You rent it out (rental rates in Thailand are worse than the USA and its more likely you wont find a renter but lets ignore that). You get to keep the rent each month, around 50k baht a month. You make 11 months rent a year (1 to the agent who finds the renter) so 600K baht/17.6k USD yearly which is around a 7% return. You have pay tax on this, and if you have $250K in cash Id imagine you are in the 30%+ tax range so you are making 5% annually on your investment minus keeping the property up, paying insurance, and not having a renter. You will also profit when the property price increases. It reaches $300K USD and you decide to sell, you have to pay tax to the Thai government on your gains (how much?)...Rate of inflation is around 3% so you made 2% compounded(in rent) + $50K USD(minus the Thai tax rate)... This is the profit of your initial investment of $250K...

Correct me where I went wrong but buying property in Thailand as an investment(you dont plan to live there) seems like an all around bad idea.

Edited October 24, 2007 by YoungFarangNa

[katom]

buy any property in thailand is a bad idea.. but thats a different story..

[think_too_mut]

buying property in Thailand as an investment(you dont plan to live there) seems like an all around bad idea.

It generally is - wrong. What might pay is a low end property that is always rented out.

Someone I know, built a 10 rooms (36sqm with bathroom and balcony each, Pattaya, the other side of the Sukhumvit) building for 4 mil baht. Rents them out at 2000B per month. Minimal maintenance (no pool, no security), always full. One farang rents 1 room as his storage.

Still, it's 20K baht per month income on 4 mil baht investment. It's not 5% as he has some expenses about the property.

That same money in an Oz bank would bring more in interest per month and no hassles. Free to pack up and go.

[maipleur]

buying property in Thailand as an investment(you dont plan to live there) seems like an all around bad idea.

It generally is - wrong. What might pay is a low end property that is always rented out.

Someone I know, built a 10 rooms (36sqm with bathroom and balcony each, Pattaya, the other side of the Sukhumvit) building for 4 mil baht. Rents them out at 2000B per month. Minimal maintenance (no pool, no security), always full. One farang rents 1 room as his storage.

Still, it's 20K baht per month income on 4 mil baht investment. It's not 5% as he has some expenses about the property.

That same money in an Oz bank would bring more in interest per month and no hassles. Free to pack up and go.

10 rooms for 4 mil?!!, man thats expensive. Its more than double on the going rates around the country.

He then also only makes 20k per month of a 4 mil investment..

I think we should leave him out of any equations when it comes down to advice etc. No disrespect intended, but those figures would not work in a dress shop.

My friend purchased 3 free hold condos today, 1 for 4,900,000 Baht and it has tennants at 40k per month for 1 year (signed contract)

the other two he purchased at 3.5 each and has a rental return of 25k per month for 1 and the other he will stay in while here in Bangkok..

A lot of people say dont buy at the moment and I would agree in some regards, but as the uncertainty from investors has been going on a for a while now, prices are dropping.. Freehold condos with an average return of 8% are not bad in my book.

Edited October 24, 2007 by maipleur

[londonthai]

the difference between thailand and usa, new zealand or the other countries that here nobody will ask from where money came in - some of it would be from the black market. Some call it money laundering, but on a small scale - and it doesn't matter if there is a small return on investment or even if you loose some money. The money comes out clean

[think_too_mut]

buying property in Thailand as an investment(you dont plan to live there) seems like an all around bad idea.

It generally is - wrong. What might pay is a low end property that is always rented out.

Someone I know, built a 10 rooms (36sqm with bathroom and balcony each, Pattaya, the other side of the Sukhumvit) building for 4 mil baht. Rents them out at 2000B per month. Minimal maintenance (no pool, no security), always full. One farang rents 1 room as his storage.

Still, it's 20K baht per month income on 4 mil baht investment. It's not 5% as he has some expenses about the property.

That same money in an Oz bank would bring more in interest per month and no hassles. Free to pack up and go.

10 rooms for 4 mil?!!, man thats expensive. Its more than double on the going rates around the country.

He then also only makes 20k per month of a 4 mil investment..

His investment is 400K baht per room. Never one is dormant. I can't call him stupid as he is not an Oz resident to make more and safe through lazy banks.

[YoungFarangNa]

"My friend purchased 3 free hold condos today, 1 for 4,900,000 Baht and it has tennants at 40k per month for 1 year (signed contract)

the other two he purchased at 3.5 each and has a rental return of 25k per month for 1 and the other he will stay in while here in Bangkok.."

sounds like he caught him a farang fish. i am renting in sala daeng area a minute from the bts for 25k/month. it is 1 or 2 years old. id would be very surprised if it is less than 85-90K/m2 to own.

i guess if you can find the right places to advertise you could consistently book farang at inflated rental rates you could do very well. 10%+ in rents is pretty perfect.

[RAZZELL]

You can be pretty sure that in a market like the USA, UK or Europe over the long term prices will rise...the same cannot be said about property prices in Thailand.

RAZZ

[think_too_mut]

buying property in Thailand as an investment(you dont plan to live there) seems like an all around bad idea.

It generally is - wrong. What might pay is a low end property that is always rented out.

Someone I know, built a 10 rooms (36sqm with bathroom and balcony each, Pattaya, the other side of the Sukhumvit) building for 4 mil baht. Rents them out at 2000B per month. Minimal maintenance (no pool, no security), always full. One farang rents 1 room as his storage.

Still, it's 20K baht per month income on 4 mil baht investment. It's not 5% as he has some expenses about the property.

That same money in an Oz bank would bring more in interest per month and no hassles. Free to pack up and go.

My friend purchased 3 free hold condos today, 1 for 4,900,000 Baht and it has tennants at 40k per month for 1 year (signed contract)

the other two he purchased at 3.5 each and has a rental return of 25k per month for 1 and the other he will stay in while here in Bangkok..

A lot of people say dont buy at the moment and I would agree in some regards, but as the uncertainty from investors has been going on a for a while now, prices are dropping.. Freehold condos with an average return of 8% are not bad in my book.

If I were to rent a condo, it would be in the 30-35K baht range, paying it myself.

That's where the problem is: people paying from their own pocket would be where I could be. Those on company's check will go for something much higher. Would not have a glance at the "middle priced" accommodation, 4-5 million baht.

The affordable properties (unless low end) may remain unoccupied for years or for decades. Or never see any inhabitants except the mosqitoes.

It may be even hard to abandon such a property and run away.

[cclub75]

Well, first, the scheme in the US you are talking about... is a mere souvenir now. Don't you know that since 2005 (yes it started 2 years ago), there is a massive real estate crisis over there ? And since august 2007, we have also a credit crisis ?

Anyway.

As for Thailand, you're right. But difficult to make a rule of it. People who simply reduce the buying price, by looking at smaller units (that are easier to rent by the way) can show a much better return in %.

[Heng]

Now lets look at Thailand, you buy a property for $250K (8.5m Baht).

Correct me where I went wrong but buying property in Thailand as an investment(you dont plan to live there) seems like an all around bad idea.

You went wrong by purchasing a $250k property of a few to several hundred square meters which was likely carved from a 200 rai plot that cost the owner maybe $250k to purchase all 200 rai say 20 years ago and perhaps $160k per house x 200 plots to develop, ideally without any kind of external financing.

[maipleur]

"My friend purchased 3 free hold condos today, 1 for 4,900,000 Baht and it has tennants at 40k per month for 1 year (signed contract)

the other two he purchased at 3.5 each and has a rental return of 25k per month for 1 and the other he will stay in while here in Bangkok.."

sounds like he caught him a farang fish. i am renting in sala daeng area a minute from the bts for 25k/month. it is 1 or 2 years old. id would be very surprised if it is less than 85-90K/m2 to own.

i guess if you can find the right places to advertise you could consistently book farang at inflated rental rates you could do very well. 10%+ in rents is pretty perfect.

sorry I should of been more clear. The 4.9 "condo" is an apartment, with two beds and is 88sqm.

the other two are also "apartments" of 65 ish sqm.

Im not sure if your last sentence was aimed at me, but I dont book anyone anything or take a commission.. He is a friend of ten years and he bought from a reputable broker..

[maipleur]

buying property in Thailand as an investment(you dont plan to live there) seems like an all around bad idea.

It generally is - wrong. What might pay is a low end property that is always rented out.

Someone I know, built a 10 rooms (36sqm with bathroom and balcony each, Pattaya, the other side of the Sukhumvit) building for 4 mil baht. Rents them out at 2000B per month. Minimal maintenance (no pool, no security), always full. One farang rents 1 room as his storage.

Still, it's 20K baht per month income on 4 mil baht investment. It's not 5% as he has some expenses about the property.

That same money in an Oz bank would bring more in interest per month and no hassles. Free to pack up and go.

My friend purchased 3 free hold condos today, 1 for 4,900,000 Baht and it has tennants at 40k per month for 1 year (signed contract)

the other two he purchased at 3.5 each and has a rental return of 25k per month for 1 and the other he will stay in while here in Bangkok..

A lot of people say dont buy at the moment and I would agree in some regards, but as the uncertainty from investors has been going on a for a while now, prices are dropping.. Freehold condos with an average return of 8% are not bad in my book.

If I were to rent a condo, it would be in the 30-35K baht range, paying it myself.

That's where the problem is: people paying from their own pocket would be where I could be. Those on company's check will go for something much higher. Would not have a glance at the "middle priced" accommodation, 4-5 million baht.

The affordable properties (unless low end) may remain unoccupied for years or for decades. Or never see any inhabitants except the mosqitoes.

It may be even hard to abandon such a property and run away.

the Bangkok property market is a funny one when comes to rentals. I looked for 4 months on this site and contacting brokers also. There is not many properties for rent bewteen 25k to 40k, although plenty under and plenty over. Thats my experience anyway.

As you pointed out, it is a "middle priced" apartment, but the one I saw (4.9) was really nice. The decor is brand new, it came fully furnished with 3 flat screen tv's, two double beds, fridge etc etc.. Everything brand new! It even had an ensuite bathroom with a bath. It was originally priced at 6mil and sat on the market for 9 months. My friend offered 4.8 and the guy settled (within 12 hours) on 4.9.. bargain and fantastic location on wireless road. 10 minutes walk to everything.

Im going to buy one on the floor below him at the same price from the same guy, if Im quick enough.

Edited October 24, 2007 by maipleur

[YoungFarangNa]

"My friend purchased 3 free hold condos today, 1 for 4,900,000 Baht and it has tennants at 40k per month for 1 year (signed contract)

the other two he purchased at 3.5 each and has a rental return of 25k per month for 1 and the other he will stay in while here in Bangkok.."

sounds like he caught him a farang fish. i am renting in sala daeng area a minute from the bts for 25k/month. it is 1 or 2 years old. id would be very surprised if it is less than 85-90K/m2 to own.

i guess if you can find the right places to advertise you could consistently book farang at inflated rental rates you could do very well. 10%+ in rents is pretty perfect.

sorry I should of been more clear. The 4.9 "condo" is an apartment, with two beds and is 88sqm.

the other two are also "apartments" of 65 ish sqm.

Im not sure if your last sentence was aimed at me, but I dont book anyone anything or take a commission.. He is a friend of ten years and he bought from a reputable broker..

i meant 40k times 12 month is a 10% return on the value of the property. which is very good and i probably not so common.

[YoungFarangNa]

buying property in Thailand as an investment(you dont plan to live there) seems like an all around bad idea.

It generally is - wrong. What might pay is a low end property that is always rented out.

Someone I know, built a 10 rooms (36sqm with bathroom and balcony each, Pattaya, the other side of the Sukhumvit) building for 4 mil baht. Rents them out at 2000B per month. Minimal maintenance (no pool, no security), always full. One farang rents 1 room as his storage.

Still, it's 20K baht per month income on 4 mil baht investment. It's not 5% as he has some expenses about the property.

That same money in an Oz bank would bring more in interest per month and no hassles. Free to pack up and go.

My friend purchased 3 free hold condos today, 1 for 4,900,000 Baht and it has tennants at 40k per month for 1 year (signed contract)

the other two he purchased at 3.5 each and has a rental return of 25k per month for 1 and the other he will stay in while here in Bangkok..

A lot of people say dont buy at the moment and I would agree in some regards, but as the uncertainty from investors has been going on a for a while now, prices are dropping.. Freehold condos with an average return of 8% are not bad in my book.

If I were to rent a condo, it would be in the 30-35K baht range, paying it myself.

That's where the problem is: people paying from their own pocket would be where I could be. Those on company's check will go for something much higher. Would not have a glance at the "middle priced" accommodation, 4-5 million baht.

The affordable properties (unless low end) may remain unoccupied for years or for decades. Or never see any inhabitants except the mosqitoes.

It may be even hard to abandon such a property and run away.

the Bangkok property market is a funny one when comes to rentals. I looked for 4 months on this site and contacting brokers also. There is not many properties for rent bewteen 25k to 40k, although plenty under and plenty over. Thats my experience anyway.

As you pointed out, it is a "middle priced" apartment, but the one I saw (4.9) was really nice. The decor is brand new, it came fully furnished with 3 flat screen tv's, two double beds, fridge etc etc.. Everything brand new! It even had an ensuite bathroom with a bath. It was originally priced at 6mil and sat on the market for 9 months. My friend offered 4.8 and the guy settled (within 12 hours) on 4.9.. bargain and fantastic location on wireless road. 10 minutes walk to everything.

Im going to buy one on the floor below him at the same price from the same guy, if Im quick enough.

make sure you think everything through and make sure nothing is wrong with the property. its pretty strange for him to be selling a 6m property for 4.9m.

[donx]

make sure you think everything through and make sure nothing is wrong with the property. its pretty strange for him to be selling a 6m property for 4.9m.

Well perhaps this isn't strange at all. Those such as bingobongo, thaigene2, think_too_mut and others on here have been arguing for a long time that condo prices are bound to drop. Perhaps we will be seeing more discounted condos for sale very soon.

[think_too_mut]

make sure you think everything through and make sure nothing is wrong with the property. its pretty strange for him to be selling a 6m property for 4.9m.

Well perhaps this isn't strange at all. Those such as bingobongo, thaigene2, think_too_mut and others on here have been arguing for a long time that condo prices are bound to drop. Perhaps we will be seeing more discounted condos for sale very soon.

It is us, farangs, who brought that state of mind that property prices may only go up.

Price drop happens in Japan all the time, it would be unnatural if they don't. More precise - it is price of land that goes up, any construction on it simply loses value as it ages until the land is worth more than the building and it gets demolished and same one rebuilt after 10-15 years.

It is normal that a condo in a 10 years old building cost half the price of next door new one.

Which will cost half today's price in 10 years too. The materials and quality have been standardized so no much difference and with no inflation it's simply neweness of a place. What remains and does not drop (or maybe 5%) is rent it can be rented for. Same or similar for a new and "used" place.

It's unheard of in, for example, Sydney. In my street there (Victoria Street, Potts Point) a terrace house goes for 4 million dollars 120 years after it was built. In Japan it would have been demolished and rebuilt 10-15 times over that period.

My place in that street is now 2 times what I paid exactly 10 years ago. Try that (to double the price) anywhere in Bangkok.

Thais, looking over farang shoulders have learned to expect the same and are hanging on to their real estate like they do with their cars that lose little resell value + farang developers and buyers that fuel this kind of non-asian expectations.

[RAZZELL]

this kind of non-asian expectations.

Exactly, the property market has entirely different charateristics.

RAZZ

[pkrv]

Price drop happens in Japan all the time, it would be unnatural if they don't. More precise - it is price of land that goes up, any construction on it simply loses value as it ages until the land is worth more than the building and it gets demolished and same one rebuilt after 10-15 years.

It is normal that a condo in a 10 years old building cost half the price of next door new one.

Which will cost half today's price in 10 years too. The materials and quality have been standardized so no much difference and with no inflation it's simply neweness of a place. What remains and does not drop (or maybe 5%) is rent it can be rented for. Same or similar for a new and "used" place.

This is a very interesting observation I have seen similar comments in Hong Kong and haven't yet got my head around the concept. Someone once told me that the expected life time of a block in Hong Kong was about 25 years. Given it takes a massive vote of the owners (something like 70%) to sell the land the condo is on, I must make the assumption that it is in all the owners interests to decide to demolish and on sell - but I don't know.

Edited October 26, 2007 by pkrv

[johnnyk]

Land in HK is owned by the state and leased out.

[johnnyk]

In the USA, you can buy a house for 10% down, rent it out, perhaps the rent pays your mortgage payments, or perhaps you lose a little bit. In time, you can you sell the property, pay off the mortgage and make a profit. So if the property was $250K, you invest $25K and if it goes up to $300K you can sell at a $50K profit minus fees and a slight loss on each mortgage payment. You return somewhere in the 150% range on your investment. If you sell the house in 5 years, you don't pay tax on your gains.

Been living in a cave in New Guinea for the past few years?

[pkrv]

Land in HK is owned by the state and leased out.

Opps - Freehold Condos in Thailand hence 70% (ish) need to agree, it's interesting to compare, but the comparison is different I agree.

[think_too_mut]

Land in HK is owned by the state and leased out.

Is it not like that in Singapore too? HDB (Housing Development Board) builds condos and sells (leases) them at affordable price for 50 years...then everybody out, demolish and rebuild them?

[rgs2001uk]

buying property in Thailand as an investment(you dont plan to live there) seems like an all around bad idea.

It generally is - wrong. What might pay is a low end property that is always rented out.

Someone I know, built a 10 rooms (36sqm with bathroom and balcony each, Pattaya, the other side of the Sukhumvit) building for 4 mil baht. Rents them out at 2000B per month. Minimal maintenance (no pool, no security), always full. One farang rents 1 room as his storage.

Still, it's 20K baht per month income on 4 mil baht investment. It's not 5% as he has some expenses about the property.

That same money in an Oz bank would bring more in interest per month and no hassles. Free to pack up and go.

My friend purchased 3 free hold condos today, 1 for 4,900,000 Baht and it has tennants at 40k per month for 1 year (signed contract)

the other two he purchased at 3.5 each and has a rental return of 25k per month for 1 and the other he will stay in while here in Bangkok..

A lot of people say dont buy at the moment and I would agree in some regards, but as the uncertainty from investors has been going on a for a while now, prices are dropping.. Freehold condos with an average return of 8% are not bad in my book.

If I were to rent a condo, it would be in the 30-35K baht range, paying it myself.

That's where the problem is: people paying from their own pocket would be where I could be. Those on company's check will go for something much higher. Would not have a glance at the "middle priced" accommodation, 4-5 million baht.

The affordable properties (unless low end) may remain unoccupied for years or for decades. Or never see any inhabitants except the mosqitoes.

It may be even hard to abandon such a property and run away.

the Bangkok property market is a funny one when comes to rentals. I looked for 4 months on this site and contacting brokers also. There is not many properties for rent bewteen 25k to 40k, although plenty under and plenty over. Thats my experience anyway.

As you pointed out, it is a "middle priced" apartment, but the one I saw (4.9) was really nice. The decor is brand new, it came fully furnished with 3 flat screen tv's, two double beds, fridge etc etc.. Everything brand new! It even had an ensuite bathroom with a bath. It was originally priced at 6mil and sat on the market for 9 months. My friend offered 4.8 and the guy settled (within 12 hours) on 4.9.. bargain and fantastic location on wireless road. 10 minutes walk to everything.

Im going to buy one on the floor below him at the same price from the same guy, if Im quick enough.

make sure you think everything through and make sure nothing is wrong with the property. its pretty strange for him to be selling a 6m property for 4.9m.

who says the propert was worth 6m? i learned a long time ago something is only worth what some else is willing to pay for it.

yeah sure you can sit in your house and delude yourself its worth x, and if you wait long enough you may get what you ask for,if you want to find out its true worth right now try selling it.

the law of supply and demand, buyers and sellers market, maybe the seller only paid 4m for it.

i had the same problem in the uk years ago, the first question i was asked by an estate agent was what did you pay for your house, i told them in was none of their business, i wanted to sell the house for x, they told me i couldnt, as it would drag down the resale value of similair type properties in the street.

i eventually cut them out the equation and sold the house privately, i was happy and the buyer was happy.

the fact that some speculators were up to their eyeballs in debt and couldnt afford to take a loss was not my problem.

[donx]

i had the same problem in the uk years ago, the first question i was asked by an estate agent was what did you pay for your house, i told them in was none of their business, i wanted to sell the house for x, they told me i couldnt, as it would drag down the resale value of similair type properties in the street.

Interesting. In the US I can find out on the Internet exactly what anyone that currently owns a house in my state paid for it. Isn't this information public knowledge in the UK? Even if it was years ago, that information was always publicly available by going to the proper government agency.

[johnnyk]

If someone wishes to engage in speculation, ie. buying to rent out and later sell at a profit, there are far better places to do it than Thailand.

The rental market here is anomalous with regard to ROI in other countries, ie. ROI rates common elsewhere are difficult to achieve in Siam;

The situation re: ownership/residency etc is not crystal clear;

Falang ownership of max 49% in any condo building can be problematic, i.e if 51% Thai ownership chooses not to have a contingency fund, avoid common area charges or keep up maintenance your investment can go down the drain. You end up owning part of a slum;

The baht is relatively high v. many western currencies right now;

Bureaucratic/repatriation issues re: foreign currency and profit.

[YoungFarangNa]

buying property in Thailand as an investment(you dont plan to live there) seems like an all around bad idea.

It generally is - wrong. What might pay is a low end property that is always rented out.

Someone I know, built a 10 rooms (36sqm with bathroom and balcony each, Pattaya, the other side of the Sukhumvit) building for 4 mil baht. Rents them out at 2000B per month. Minimal maintenance (no pool, no security), always full. One farang rents 1 room as his storage.

Still, it's 20K baht per month income on 4 mil baht investment. It's not 5% as he has some expenses about the property.

That same money in an Oz bank would bring more in interest per month and no hassles. Free to pack up and go.

My friend purchased 3 free hold condos today, 1 for 4,900,000 Baht and it has tennants at 40k per month for 1 year (signed contract)

the other two he purchased at 3.5 each and has a rental return of 25k per month for 1 and the other he will stay in while here in Bangkok..

A lot of people say dont buy at the moment and I would agree in some regards, but as the uncertainty from investors has been going on a for a while now, prices are dropping.. Freehold condos with an average return of 8% are not bad in my book.

If I were to rent a condo, it would be in the 30-35K baht range, paying it myself.

That's where the problem is: people paying from their own pocket would be where I could be. Those on company's check will go for something much higher. Would not have a glance at the "middle priced" accommodation, 4-5 million baht.

The affordable properties (unless low end) may remain unoccupied for years or for decades. Or never see any inhabitants except the mosqitoes.

It may be even hard to abandon such a property and run away.

the Bangkok property market is a funny one when comes to rentals. I looked for 4 months on this site and contacting brokers also. There is not many properties for rent bewteen 25k to 40k, although plenty under and plenty over. Thats my experience anyway.

As you pointed out, it is a "middle priced" apartment, but the one I saw (4.9) was really nice. The decor is brand new, it came fully furnished with 3 flat screen tv's, two double beds, fridge etc etc.. Everything brand new! It even had an ensuite bathroom with a bath. It was originally priced at 6mil and sat on the market for 9 months. My friend offered 4.8 and the guy settled (within 12 hours) on 4.9.. bargain and fantastic location on wireless road. 10 minutes walk to everything.

Im going to buy one on the floor below him at the same price from the same guy, if Im quick enough.

make sure you think everything through and make sure nothing is wrong with the property. its pretty strange for him to be selling a 6m property for 4.9m.

who says the propert was worth 6m? i learned a long time ago something is only worth what some else is willing to pay for it.

yeah sure you can sit in your house and delude yourself its worth x, and if you wait long enough you may get what you ask for,if you want to find out its true worth right now try selling it.

the law of supply and demand, buyers and sellers market, maybe the seller only paid 4m for it.

i had the same problem in the uk years ago, the first question i was asked by an estate agent was what did you pay for your house, i told them in was none of their business, i wanted to sell the house for x, they told me i couldnt, as it would drag down the resale value of similair type properties in the street.

i eventually cut them out the equation and sold the house privately, i was happy and the buyer was happy.

the fact that some speculators were up to their eyeballs in debt and couldnt afford to take a loss was not my problem.

if its being rented out for 40K baht a month, then its value if not 4.9m...

[jstumbo]

i had the same problem in the uk years ago, the first question i was asked by an estate agent was what did you pay for your house, i told them in was none of their business, i wanted to sell the house for x, they told me i couldnt, as it would drag down the resale value of similair type properties in the street.

Interesting. In the US I can find out on the Internet exactly what anyone that currently owns a house in my state paid for it. Isn't this information public knowledge in the UK? Even if it was years ago, that information was always publicly available by going to the proper government agency.

Or just look the US home up on Zillow.com and it will show you the sales history of the home.

[rgs2001uk]

f its being rented out for 40K baht a month, then its value if not 4.9m.

i must be missing something here, i fail to understand how you can tell the value of a property based on what it is being rented for.

i know houses in areas that can be rented monthly for between 7-10,000 baht per month, perhaps you wish to hazard a guess and tell us how much they are worth, no need to use some buy to rent for dummies formula, the value of these houses is between 3.5 to 4.5 million baht. or should i say that is the price that the resale value of the land would fetch, based on the baht price per tarang wah.

think too much has pretty much hit the nail on the head with his observations and i concur with his points.

near where i live you can buy brand new homes in the 8-10 million baht price range, go fifty yards down the road in the same moobahn, you can buy a 20 year old house sitting on 65 -80 tarang wah for between 2.5 to 4 million baht, knock down the house and construct a new one for between 2 to 3 million baht. even if we take the extreme figures of 3 million to construct and 4 million to buy the land, its still a saving, plus you get a bigger plot of land and a house built to a better standard.

my attitude to thailand is you buy the land and the house is a bonus at best or an inconvience at worst, sooner or later it will need knocking down, these houses arent built to western standards.

i see many people upcountry trying to tell me their house is worth x, its a bit like putting $15,000 into a $5,000 car and then wondering why you cant sell it, yes they might have spent x on constructing a house, but the locals look at the cost of the land it sits on, and thats what they are buying.

as others have pointed out there are better options with better returns and less headaches elsewhere, just because someone lives in thailand doesnt mean it makes economic sense to invest here, some just want the kudos i suppose.

[johnnyk]

A friend of mine who has lived in SEA for a few years now was very successful in real estate in the US both as a salesman and an investor.

His calculation on whether or not a property's price made sense was this:

Monthly rent X 12 X 7 years amortization.

He rented a condo for 23K a month (X12 = 276000baht/year X7 yrs = 1.932 million baht).

That was the absolute max price he would have offered had he wanted to buy it.

The asking price was 4.5 million.

His conclusion as a professional was that from an investor's point of view the rental returns made no sense.

I have heard of people making money on condos in LoS but they were guys who bought tired undervalued places, gutted them, re-furbished and sold at a profit. Not a busines for the faint-hearted though, particularly in Thailand.