650k Condo For Investment

[Greenside]

I've found a condo for 650k which requires little or no improvement and is fetching 6500 to 7000 a month rent depending on length of term. The current owner, a farang due to leave for home shortly, reports a 10% return after building service fees although I have yet to verify his calculations. Research on TV indicates the areas to beware of include:

1) Ensuring it's clear who is paying the Land Registration, Stamp Duty, Business Tax and Income Tax.

2) Verifying that the unit falls within the 50% foreign ownership allocation

3) Checking the management and/or accounts of the building are satisfactory

4) Getting an offshore rate of exchange and certificate when importing the funds

My questions are:

a) Are there any other caveat items I should consider?

b ) As the vendor is leaving Thailand soon how should payment of the various taxes etc (which I understand may not immediately become due) be guaranteed so I don't end up with a bill?

c) Am I liable to to file a return and pay income tax on the rent? If this represented my only income as opposed to pension etc from overseas what might the rate be?

d) Finally, given the small amount of actual extra income over simply leaving the funds on deposit, is it worth the effort? BTW I don't see the value of the unit showing much appreciation given the age of the building.

Your views and advice would be much appreciated.

[Greenside]

I see that Khun Bob's thread answers many of the "what else to consider" question but would still be grateful for responses to b, c & d. Thanks.

Edited November 6, 2007 by Greenside

[asiaworld]

Sounds like a great deal to me is it in Bangkok.. Actually, not that many taxes to worry about, it's way more civilised here, than in the west.. actually if you decided, not to go throu with the purchase, or there are more units in the building, you may pm me, & i'd like to have a closer look ..

Should be quite painless thou.. if YOU like the way the building was managed, that's all you need really.. Ex owner is already foreign, so no worries about 51-49% rule .. Just have your proof of funds ready & go to your local land dept to finalise ( condo management downstairs, should be able to help!) ,, all you need is 2-3 hours at most, once you've got the doush.. Good luck

[geoffphuket]

Firstly I'm no expert on this topic, but in answer to:

C: I don't believe 6-7K Baht/month income would be subject to tax - I might be wrong

D: It sounds like a very good rate of return on an investment of only 650K. A (foreign) bank deposit would only give a third of that....if you're lucky. Of course much would depend on being able to find a permanent tenant - if it's empty 6 months of the year, then maintenance costs etc will leave you out of pocket.

geoffphuket

[Greenside]

It's in Chiangmai so don't get too excited!

Thanks for the input. By way of answering my own question I have amalgamated some of the points on Khun Bob's post and made a list that I'm going to use as the basis for evaluating this condo. I see that someone on that thread suggested a comprehensive checklist might be usefully pinned in this forum so maybe this could be a first draft - and, please before anyone mentions it, all credit goes to the writers of the posts included.

Checklist for Buying a Used Condo

1. Get the minutes of the AGMs AND the Minutes of the Committee Meetings.

2. Read The Condo Act; read the Condo Regulations which is a legal document deposited with the Land Office

3. The Condo Association will also have records of what percentage of units are foreign owned. DON'T get stuck with a unit owned by a bogus Thai company.

4. Does the Committee meet as specified in the Regulations?

5. Are the Committee Members approachable and helpful?

6. Speak with as many non-committee member residents as possible

7. Meet the Manager. If he/she won't answer questions and says go speak with the Committee then do so.

8. If Committee says go speak with manager then unless you really like the building and would like to fight all this kind of nonsense at the AGM and during the year, go find somewhere else to buy.

9. Ask for the AUDITED financials; ask for monthly financial statements - they are common property and some good condos put up on notice board for all to peruse. Other condos are/may be secretive. If so, why?

10. Ask about major maintenance projects - sewage and drainage, water and filtration, roof, roads, gardens, painting of outside of building and corridors, elevators.

11. Have the projects planned for the previous year been completed OK? How about any work in progress?

12. Check the basement for damp.

13. Is there a Sinking Fund? Is it sufficient?

14. Is Insurance Coverage enough?

15. What are the yearly maintenance fees? What percentage of co-owners do not pay.

16. Are smoke alarms installed in common areas? In individual units? Are they checked and monitored and/or connected to the fire service?

17. Is there a sprinkler system?

18. Walk the emergency stairwells - what kind of lighting? Does it work? Are the stairwells clear and clean?

19. Check that fire fighting equipment is available and periodically maintained (there should be a record of costs associated with this so you don't just have to take someone's word for it)

20. Check that security personnel are smart, courteous and at their stations.

21. Is there 24 hour coverage by English speaking staff?

22. Does the office staff have name badges?

23. Is the building secure or can anyone just walk in and go where they please?

24. Is the perimeter secure?

25. Is there CCTV and does it work?

26. Are there recordings and how long are they kept?

27. If there is a key card system how often is it changed? How many key cards have been issued? How many are unaccounted for?

28. Try to find out how many burglaries in past 2 years.

29. Are the grounds neat and tidy?

30. Is the garbage room clean and tidy? How often is garbage collected?

31. Availability of (IDD) telephone (data) lines and the cost of same (some condos charge a criminal amount to get a IDD line).

32. Availability of cable TV choice and options for putting up own satellite dish(es).

33. Cost of metered services – water and electricity if supplied by building and cost of changing to own meters.

34. What facilities (residents' lounge, exercise room, etc.) are available and are they in use and good repair? Swimming pool? Tennis court? Is there a charge?

35. Are facilities open to non-residents? This can lead to an increased security risk and different atmosphere with strangers coming and going frequently. Is additional wear and tear on the facilities covered by the charges to non-residents or does the management pocket the takings?

36. Are there karaoke bars or other noisy places nearby? How often? How loud? How late?

37. If there is a view is there the possibility it could be blocked in the future?

38. Check basement rooms for trash, evidence of staff (and their friends) staying there.

39. Parking spaces are common property and should not be allocated.

40. How long to wait for an elevator during high season?

41. How many units are currently unoccupied?

42. How many units are currently offered for sale or rent? Check other prices.

43. Make sure most if not all the units in the building are occupied by the owners.

44. If the management offers to rent condo's on the owners' behalf, how much do they charge and exactly what service is on offer?

[asiaworld]

unless property prices in CM are fraction of those in Bkk, all your points are sooo out of the price range... unless you go for anything over 5 mil baht, don't even attempt your checklist, coz itss soo futile, esp.point 21 ! Now in most of cases, when you buy low end, just a quick glance is suficient to establish the majority thai ownership , i never did any of those checks & no harm ever came my way in a few years time, now if you're about to buy into Pattaya style foreign getto, i would be worried, & make sure to run the checks,even thou i wouldn't even consider that sort of condo in the first place ( i had english'thaicouple renting next to me,& really glad they left )

[think_too_mut]

It's in Chiangmai so don't get too excited!

Thanks for the input. By way of answering my own question I have amalgamated some of the points on Khun Bob's post and made a list that I'm going to use as the basis for evaluating this condo. I see that someone on that thread suggested a comprehensive checklist might be usefully pinned in this forum so maybe this could be a first draft - and, please before anyone mentions it, all credit goes to the writers of the posts included.

Checklist for Buying a Used Condo

1. Get the minutes of the AGMs AND the Minutes of the Committee Meetings.

2. Read The Condo Act; read the Condo Regulations which is a legal document deposited with the Land Office

3. The Condo Association will also have records of what percentage of units are foreign owned. DON'T get stuck with a unit owned by a bogus Thai company.

4. Does the Committee meet as specified in the Regulations?

5. Are the Committee Members approachable and helpful?

6. Speak with as many non-committee member residents as possible

7. Meet the Manager. If he/she won't answer questions and says go speak with the Committee then do so.

8. If Committee says go speak with manager then unless you really like the building and would like to fight all this kind of nonsense at the AGM and during the year, go find somewhere else to buy.

9. Ask for the AUDITED financials; ask for monthly financial statements - they are common property and some good condos put up on notice board for all to peruse. Other condos are/may be secretive. If so, why?

10. Ask about major maintenance projects - sewage and drainage, water and filtration, roof, roads, gardens, painting of outside of building and corridors, elevators.

11. Have the projects planned for the previous year been completed OK? How about any work in progress?

12. Check the basement for damp.

13. Is there a Sinking Fund? Is it sufficient?

14. Is Insurance Coverage enough?

15. What are the yearly maintenance fees? What percentage of co-owners do not pay.

16. Are smoke alarms installed in common areas? In individual units? Are they checked and monitored and/or connected to the fire service?

17. Is there a sprinkler system?

18. Walk the emergency stairwells - what kind of lighting? Does it work? Are the stairwells clear and clean?

19. Check that fire fighting equipment is available and periodically maintained (there should be a record of costs associated with this so you don't just have to take someone's word for it)

20. Check that security personnel are smart, courteous and at their stations.

21. Is there 24 hour coverage by English speaking staff?

22. Does the office staff have name badges?

23. Is the building secure or can anyone just walk in and go where they please?

24. Is the perimeter secure?

25. Is there CCTV and does it work?

26. Are there recordings and how long are they kept?

27. If there is a key card system how often is it changed? How many key cards have been issued? How many are unaccounted for?

28. Try to find out how many burglaries in past 2 years.

29. Are the grounds neat and tidy?

30. Is the garbage room clean and tidy? How often is garbage collected?

31. Availability of (IDD) telephone (data) lines and the cost of same (some condos charge a criminal amount to get a IDD line).

32. Availability of cable TV choice and options for putting up own satellite dish(es).

33. Cost of metered services – water and electricity if supplied by building and cost of changing to own meters.

34. What facilities (residents' lounge, exercise room, etc.) are available and are they in use and good repair? Swimming pool? Tennis court? Is there a charge?

35. Are facilities open to non-residents? This can lead to an increased security risk and different atmosphere with strangers coming and going frequently. Is additional wear and tear on the facilities covered by the charges to non-residents or does the management pocket the takings?

36. Are there karaoke bars or other noisy places nearby? How often? How loud? How late?

37. If there is a view is there the possibility it could be blocked in the future?

38. Check basement rooms for trash, evidence of staff (and their friends) staying there.

39. Parking spaces are common property and should not be allocated.

40. How long to wait for an elevator during high season?

41. How many units are currently unoccupied?

42. How many units are currently offered for sale or rent? Check other prices.

43. Make sure most if not all the units in the building are occupied by the owners.

44. If the management offers to rent condo's on the owners' behalf, how much do they charge and exactly what service is on offer?

For somebody to check all that, would 650K be enough to pay for the effort?

[Greenside]

unless property prices in CM are fraction of those in Bkk, all your points are sooo out of the price range... unless you go for anything over 5 mil baht, don't even attempt your checklist, coz itss soo futile, esp.point 21 ! Now in most of cases, when you buy low end, just a quick glance is suficient to establish the majority thai ownership , i never did any of those checks & no harm ever came my way in a few years time, now if you're about to buy into Pattaya style foreign getto, i would be worried, & make sure to run the checks,even thou i wouldn't even consider that sort of condo in the first place ( i had english'thaicouple renting next to me,& really glad they left )

I take your point. The list was meant to be complete rather than specifically for the kind of joint I'm looking at so a modicum of intelligence and selectivity must be applied when using it. Nevertheless the principals of many of the points still apply so I hope it's of use to someone.

I will be checking the stairwell and fire precautions.

I probably won't worry too much about the staff name badges....

[asiaworld]

Greenside , just out of curiosity, what's the ethnic spread oftenants/owners in CM condo you're buying ?! Also would be curious how much of a condo can you get for this much in Chiang Mai ?! Now in Bkk it would be 90-100% thai owned 80-90% thai populated (btw. they do make much quiter neighbors ). will not likely to have pool/fitness, but some do ! Will be 20-35sq.m. studio definitely waay out of city centre (& bts/mrt!) pain in the arse without car,but great for rental returns !!>>that's my goal .. now i usually do it half blind, with thai contract & only thai speaking management !

But that's where you'll need to perform THE ONLY CHECK NEEDED>> if you find management trustworthy & sympathetic, because beleive me, you'll HAVE to trust them at some point ! Hope it helps

[cmsally]

By coincidence I was also looking at a condo on the net for 650k in CM today.

Maybe it was the same one!

If it was, that building is OK but would be interesting to know rental occupancy percentage ie . if they have rooms which lay empty for ages.

The only thing that worries me slightly about the smaller units is how much in demand they are (seeing as much larger units are relatively quite cheap if you compare to BKK prices) and trying to screen potential renters considering its a pretty low price per month. But I suppose that is the case with any property you rent out.

[JimmyTheMook]

I have something in Pattaya for 675k , high floor corner unit with sea views, turn key condo.

Yes it is mostly a Thai building but actually a very nice place if anyone is interested PM me.

[alyx]

I have something in Pattaya for 675k , high floor corner unit with sea views, turn key condo.

Yes it is mostly a Thai building but actually a very nice place if anyone is interested PM me.

Hey Where about in Pattaya Thanks Alyx

Regarding the one in CM If you like it go for it When you get to the land depatment they will let you buy or not if it can be bought on a foreigner's name.

[pkrv]

It's in Chiangmai so don't get too excited!

Thanks for the input. By way of answering my own question I have amalgamated some of the points on Khun Bob's post and made a list that I'm going to use as the basis for evaluating this condo. I see that someone on that thread suggested a comprehensive checklist might be usefully pinned in this forum so maybe this could be a first draft - and, please before anyone mentions it, all credit goes to the writers of the posts included.

Checklist for Buying a Used Condo

1. Get the minutes of the AGMs AND the Minutes of the Committee Meetings.

2. Read The Condo Act; read the Condo Regulations which is a legal document deposited with the Land Office

3. The Condo Association will also have records of what percentage of units are foreign owned. DON'T get stuck with a unit owned by a bogus Thai company.

4. Does the Committee meet as specified in the Regulations?

5. Are the Committee Members approachable and helpful?

6. Speak with as many non-committee member residents as possible

7. Meet the Manager. If he/she won't answer questions and says go speak with the Committee then do so.

8. If Committee says go speak with manager then unless you really like the building and would like to fight all this kind of nonsense at the AGM and during the year, go find somewhere else to buy.

9. Ask for the AUDITED financials; ask for monthly financial statements - they are common property and some good condos put up on notice board for all to peruse. Other condos are/may be secretive. If so, why?

10. Ask about major maintenance projects - sewage and drainage, water and filtration, roof, roads, gardens, painting of outside of building and corridors, elevators.

11. Have the projects planned for the previous year been completed OK? How about any work in progress?

12. Check the basement for damp.

13. Is there a Sinking Fund? Is it sufficient?

14. Is Insurance Coverage enough?

15. What are the yearly maintenance fees? What percentage of co-owners do not pay.

16. Are smoke alarms installed in common areas? In individual units? Are they checked and monitored and/or connected to the fire service?

17. Is there a sprinkler system?

18. Walk the emergency stairwells - what kind of lighting? Does it work? Are the stairwells clear and clean?

19. Check that fire fighting equipment is available and periodically maintained (there should be a record of costs associated with this so you don't just have to take someone's word for it)

20. Check that security personnel are smart, courteous and at their stations.

21. Is there 24 hour coverage by English speaking staff?

22. Does the office staff have name badges?

23. Is the building secure or can anyone just walk in and go where they please?

24. Is the perimeter secure?

25. Is there CCTV and does it work?

26. Are there recordings and how long are they kept?

27. If there is a key card system how often is it changed? How many key cards have been issued? How many are unaccounted for?

28. Try to find out how many burglaries in past 2 years.

29. Are the grounds neat and tidy?

30. Is the garbage room clean and tidy? How often is garbage collected?

31. Availability of (IDD) telephone (data) lines and the cost of same (some condos charge a criminal amount to get a IDD line).

32. Availability of cable TV choice and options for putting up own satellite dish(es).

33. Cost of metered services – water and electricity if supplied by building and cost of changing to own meters.

34. What facilities (residents' lounge, exercise room, etc.) are available and are they in use and good repair? Swimming pool? Tennis court? Is there a charge?

35. Are facilities open to non-residents? This can lead to an increased security risk and different atmosphere with strangers coming and going frequently. Is additional wear and tear on the facilities covered by the charges to non-residents or does the management pocket the takings?

36. Are there karaoke bars or other noisy places nearby? How often? How loud? How late?

37. If there is a view is there the possibility it could be blocked in the future?

38. Check basement rooms for trash, evidence of staff (and their friends) staying there.

39. Parking spaces are common property and should not be allocated.

40. How long to wait for an elevator during high season?

41. How many units are currently unoccupied?

42. How many units are currently offered for sale or rent? Check other prices.

43. Make sure most if not all the units in the building are occupied by the owners.

44. If the management offers to rent condo's on the owners' behalf, how much do they charge and exactly what service is on offer?

I see no problems with your thought process - It is your money - If it was mine, I too would defend it - Life is horses for courses I think you are on the right track with your questions. The aspect I think you are missing is the integration issue - now (IMO) that's a different kettle of fish.

Edited November 6, 2007 by pkrv

[Khun Bob]

Greenside - looks like we have similar interests

From your first list of points below, I just wondered how you would go about :

1) Ensuring it's clear who is paying the Land Registration, Stamp Duty, Business Tax and Income Tax.

Thanks

I've found a condo for 650k which requires little or no improvement and is fetching 6500 to 7000 a month rent depending on length of term. The current owner, a farang due to leave for home shortly, reports a 10% return after building service fees although I have yet to verify his calculations. Research on TV indicates the areas to beware of include:

1) Ensuring it's clear who is paying the Land Registration, Stamp Duty, Business Tax and Income Tax.

2) Verifying that the unit falls within the 50% foreign ownership allocation

3) Checking the management and/or accounts of the building are satisfactory

4) Getting an offshore rate of exchange and certificate when importing the funds

My questions are:

a) Are there any other caveat items I should consider?

b ) As the vendor is leaving Thailand soon how should payment of the various taxes etc (which I understand may not immediately become due) be guaranteed so I don't end up with a bill?

c) Am I liable to to file a return and pay income tax on the rent? If this represented my only income as opposed to pension etc from overseas what might the rate be?

d) Finally, given the small amount of actual extra income over simply leaving the funds on deposit, is it worth the effort? BTW I don't see the value of the unit showing much appreciation given the age of the building.

Your views and advice would be much appreciated.

[JimmyCA]

It's in Chiangmai so don't get too excited!

Thanks for the input. By way of answering my own question I have amalgamated some of the points on Khun Bob's post and made a list that I'm going to use as the basis for evaluating this condo. I see that someone on that thread suggested a comprehensive checklist might be usefully pinned in this forum so maybe this could be a first draft - and, please before anyone mentions it, all credit goes to the writers of the posts included.

Checklist for Buying a Used Condo

1. Get the minutes of the AGMs AND the Minutes of the Committee Meetings.

2. Read The Condo Act; read the Condo Regulations which is a legal document deposited with the Land Office

3. The Condo Association will also have records of what percentage of units are foreign owned. DON'T get stuck with a unit owned by a bogus Thai company.

4. Does the Committee meet as specified in the Regulations?

5. Are the Committee Members approachable and helpful?

6. Speak with as many non-committee member residents as possible

7. Meet the Manager. If he/she won't answer questions and says go speak with the Committee then do so.

8. If Committee says go speak with manager then unless you really like the building and would like to fight all this kind of nonsense at the AGM and during the year, go find somewhere else to buy.

9. Ask for the AUDITED financials; ask for monthly financial statements - they are common property and some good condos put up on notice board for all to peruse. Other condos are/may be secretive. If so, why?

10. Ask about major maintenance projects - sewage and drainage, water and filtration, roof, roads, gardens, painting of outside of building and corridors, elevators.

11. Have the projects planned for the previous year been completed OK? How about any work in progress?

12. Check the basement for damp.

13. Is there a Sinking Fund? Is it sufficient?

14. Is Insurance Coverage enough?

15. What are the yearly maintenance fees? What percentage of co-owners do not pay.

16. Are smoke alarms installed in common areas? In individual units? Are they checked and monitored and/or connected to the fire service?

17. Is there a sprinkler system?

18. Walk the emergency stairwells - what kind of lighting? Does it work? Are the stairwells clear and clean?

19. Check that fire fighting equipment is available and periodically maintained (there should be a record of costs associated with this so you don't just have to take someone's word for it)

20. Check that security personnel are smart, courteous and at their stations.

21. Is there 24 hour coverage by English speaking staff?

22. Does the office staff have name badges?

23. Is the building secure or can anyone just walk in and go where they please?

24. Is the perimeter secure?

25. Is there CCTV and does it work?

26. Are there recordings and how long are they kept?

27. If there is a key card system how often is it changed? How many key cards have been issued? How many are unaccounted for?

28. Try to find out how many burglaries in past 2 years.

29. Are the grounds neat and tidy?

30. Is the garbage room clean and tidy? How often is garbage collected?

31. Availability of (IDD) telephone (data) lines and the cost of same (some condos charge a criminal amount to get a IDD line).

32. Availability of cable TV choice and options for putting up own satellite dish(es).

33. Cost of metered services – water and electricity if supplied by building and cost of changing to own meters.

34. What facilities (residents' lounge, exercise room, etc.) are available and are they in use and good repair? Swimming pool? Tennis court? Is there a charge?

35. Are facilities open to non-residents? This can lead to an increased security risk and different atmosphere with strangers coming and going frequently. Is additional wear and tear on the facilities covered by the charges to non-residents or does the management pocket the takings?

36. Are there karaoke bars or other noisy places nearby? How often? How loud? How late?

37. If there is a view is there the possibility it could be blocked in the future?

38. Check basement rooms for trash, evidence of staff (and their friends) staying there.

39. Parking spaces are common property and should not be allocated.

40. How long to wait for an elevator during high season?

41. How many units are currently unoccupied?

42. How many units are currently offered for sale or rent? Check other prices.

43. Make sure most if not all the units in the building are occupied by the owners.

44. If the management offers to rent condo's on the owners' behalf, how much do they charge and exactly what service is on offer?

Nice list. You seem a person who likes to dot every i and cross every t. I am curious how this approach meshes with life in Thailand.

[Greenside]

Nice list. You seem a person who likes to dot every i and cross every t. I am curious how this approach meshes with life in Thailand.

Well, I've been visiting for years and resident a year and seem to still be sane (well, almost...) but the list isn't very mai pen rai, is it? Seriously, of course the list is overkill in many situations but for the cost of a couple of baht to print it out maybe it will remind someone of a point they would otherwise have overlooked, in which case it will be worth the effort.

Khun Bob, I have agreed with the seller that he will be paying the Registration, Duty and Tax. How I actually verify that's been done is another matter which I'll figure out nearer the time.

PKRV, If by the integration issue you mean the ethnic mix in the building, then I have a reasonable feel for it. The foreign ownership runs to about 15% and on top of that there are a few tenants as well so maybe that takes it up to 18 - 20%. I have a friend who is currently a tenant there and when I go to visit him I never hear any noise in the corridors or disturbences of any kind. I'm not proposing to live there myself but I'd say it's not a bad place to be and during my search for an apartment I saw many, many worse.

It's all going to be a learning experience - happy I hope .

[Sophon]

4) Getting an offshore rate of exchange and certificate when importing the funds

Surely you would want to get the onshore exchange rate not the offshore rate.

Sophon

[Greenside]

4) Getting an offshore rate of exchange and certificate when importing the funds

Surely you would want to get the onshore exchange rate not the offshore rate.

Sophon

Oops! I meant the onshore rate of course - thanks for correcting me.

I did ensure that I will get the right rate when the cash arrives next week. The pound was 70.8 baht on the last funds I brought in (earlier this week) so I'm hoping it'll stay good for just a few more days at least.

[pkrv]

PKRV, If by the integration issue you mean the ethnic mix in the building, then I have a reasonable feel for it. The foreign ownership runs to about 15% and on top of that there are a few tenants as well so maybe that takes it up to 18 - 20%. I have a friend who is currently a tenant there and when I go to visit him I never hear any noise in the corridors or disturbences of any kind. I'm not proposing to live there myself but I'd say it's not a bad place to be and during my search for an apartment I saw many, many worse.

It's all going to be a learning experience - happy I hope .

I think you have all bases covered - - can't think of anything else to add - I note the onshore/offshore point (which I missed) was picked up on (good news for all of us ) and what this forum is about.

From a personal perspective (at age 48) - I would add ensure you have not overextended, are not cutting it too close to the wind, and in for the long haul - so as not to be de-masted etc... But that is just my age/perspective

Edited November 8, 2007 by pkrv

[brianbrain]

The 10% return is before deducting costs, and of course assumes year-round occupancy. Without knowing the property or area, I'd assume occupancy of closer to 10 months a year. Here are some other thoughts:

- Will you manage the apartment yourself, including rent collection?

- Will you be available year-round in case there is a problem?

- If you get someone to manage for you - possibly the condo management - how much will it cost?

- Will you insure the property?

- Do you have the language skills to manage a Thai tenant? How about the contract?

- If the return is closer to 7 or 8%, will you still be interested?

[wadsy]

The 10% return is before deducting costs, and of course assumes year-round occupancy. Without knowing the property or area, I'd assume occupancy of closer to 10 months a year. Here are some other thoughts:

- Will you manage the apartment yourself, including rent collection?

- Will you be available year-round in case there is a problem?

- If you get someone to manage for you - possibly the condo management - how much will it cost?

- Will you insure the property?

- Do you have the language skills to manage a Thai tenant? How about the contract?

- If the return is closer to 7 or 8%, will you still be interested?

Actually FYI brianbrain - the return is better than your 'guestimated' 10% 'BEFORE DEDUCTING COSTS' (I.E. GROSS) - How about you read the OP again:- "he current owner, a farang due to leave for home shortly, reports a 10% return after building service fees". It's return is actually just on 13% GROSS on short term rentals. And on a long term contract the figures are just over 12% GROSS and 11% NETT respectively, working on near 100% occupancy which is readily achievable in this particular location AND with all falang tenants.

[Greenside]

The 10% return is before deducting costs, and of course assumes year-round occupancy. Without knowing the property or area, I'd assume occupancy of closer to 10 months a year. Here are some other thoughts:

- Will you manage the apartment yourself, including rent collection?

- Will you be available year-round in case there is a problem?

- If you get someone to manage for you - possibly the condo management - how much will it cost?

- Will you insure the property?

- Do you have the language skills to manage a Thai tenant? How about the contract?

- If the return is closer to 7 or 8%, will you still be interested?

Thanks for your points. I will manage the apartment and have a partner on hand should we rent to a Thai although I think it's likely that we'll find farang tenants more easily. Insurance will just be the minimum in case we get hit with damage costs from water leaks etc and other third party liabilities. We'll carry the risk for F&F, such as they are and as far as I understand it the building service charge should cover the fire risk (still needs clarifying how much cover there is). I have access to a tenancy agreement in English but might adapt a shorthold agreement I use in the UK as well. 7% or 8% is getting a bit close to offshore deposit rates so of course it's less interesting but we're not talking huge figures here so I figure it will be a good way to dip my toe in the water, so to speak and see if it's all worth the effort. I would hope to average 11 months occupancy, by the way but time will tell.

pkrv - No overextention here, but thanks for the thought .

[Khun Bob]

And THB gets weaker against GBP - 71.51 today if you use a clever visa card trick - but for how long will sterling be strong and is THB in for a run of weakness...

[pkrv]

And THB gets weaker against GBP - 71.51 today if you use a clever visa card trick - but for how long will sterling be strong and is THB in for a run of weakness...

Yes this is good news for GBP (and almost every other currency on the face of the planet), you have missed the point it is USD that is the culprit.

Edited November 8, 2007 by pkrv

[Greenside]

And THB gets weaker against GBP - 71.51 today if you use a clever visa card trick - but for how long will sterling be strong and is THB in for a run of weakness...

Well, the money's en route via a SWIFT transfer so I'll just have to keep my fingers crossed...

Edited November 9, 2007 by Greenside

[Khun Bob]

Looks like 9/11/07 was a local peak for GBPTHB - I have a feeling the next week is not going to be good for GBP. And I wanted to send more GBP - still I hope there are a few more up cycles left before GBP joins USD downwards. Still when I'm in Thailand I'll be using my Visa card to get the best rates and at zero cost for the transfer !

Anyway I did well on MYR yesterday... But thats another story.

Anyway back to the point in hand - are there any more useful points anyone would like to add or discuss when purchasing or managing a 650K investment condo in Thailand ?

[Khun Bob]

Bump - are there any more useful points anyone would like to add or discuss when purchasing or managing a 650K investment condo in Thailand ?

[Gary A]

I'll only comment on the legalities. Don't pay until you see your name on the chanote. You can be sure that the land office will NOT make the transfer unless everything is done properly. That means all the taxes and fees have been paid and they have the document that says the unit can be legally owned by a farang. I did pay some of the closing cost but the seller paid probably 80 percent of them.

[dotcom]

What are the closing costs beyond the 3% transfer fee?