At What Age Is A Bkk Condo Building Too Old?

[buddhafly]

in terms of structural soundness, resale, rentability...

i know this is a bit vague... but are there any rules of thumb regarding what age building is still ok to buy a condo in..

assuming decent management and upkeep, and some cosmetic rennovations from time to time.

do buildings reach an age where they need to be or must be demolished?

[quiksilva]

I have not come across many which need to be demolished. In fact any, if I do not factor in my opinions on aesthetics. Although some very low end towers that cater mostly to the local market may be considered unsafe (those units at Din Daeng for example)

However, I'm afraid it is impossible to give you a rule of thumb when it comes down to talking about how old is too old, when it comes to structural integrity, there are simply too many factors at play. It is not just about design, engineering, management etc, but also environmental factors and its history.

Older properties can be very desirable, many old condos tend to have better ceiling heights and larger unit sizes. Another advantage is that you can see for yourself how good the property management is, there is no hope and guesswork needed (which is usually the case with new projects).

Personally I would not judge a property by its age alone, but rather by its condition, location, price, and aesthetics.

[Irene]

Adding to quicksilva's good comments, I own four units in a condo building built 26 years ago and now still earning an average Baht 55,000/month per unit. My cost price ranges from Baht2.2m to Baht 4.7m. When will it be demolished? I don't know but I know that I can sell each unit for Baht10m. now. I am not saying all buildings will be like this condo. But do take notes of quicksilva's comments which are really true. Personally, I am more concerned with a building that is not substantially occupied, i.e. dilapidation than aging of the building.

[Hampstead]

Many buildings which are over 10 years are starting to show their age in bkk if you compare them to the new condos of the day

the only viable option for those who have invested/speculated many years ago in condos is to rent the units out for any source of income,

as to selling these old units, well lets just say that a 26 year old building might price a unit at 10mill but unless the seller had a lucky day or some extremely well informed contacts to buyers by having very close contacts with real estate agents, then the chance of actually receiving 10mill are pretty farfetched

they are many real estate agents who are honest with their backgrounds and those who are hiding their backgrounds on this tv section.

so any positive, feel great about the purchase comments by other posters should be taken with a pinch of salt on the old second hand condo market

old buildings are struggling to find buyers.

look at president park, it must be over 10 years old, well mainted, well serviced building and yet they are quting 42k a sqm for units and yet in the same soi the new buildings are fetching 120k sqm, i think the price says it all on the older units. The demand in bkk seems soley on the new units and the old units are just hoping to find a buyer

and has there are very little facts or figures for the secondhand condo market in bkk, then it leaves the new buyers of the day confused and gullable and available for the easy sell by the various property agents in bkk

[Irene]

The following are my comments in bold type:

Many buildings which are over 10 years are starting to show their age in bkk if you compare them to the new condos of the day

the only viable option for those who have invested/speculated many years ago in condos is to rent the units out for any source of income,

as to selling these old units, well lets just say that a 26 year old building might price a unit at 10mill but unless the seller had a lucky day or some extremely well informed contacts to buyers by having very close contacts with real estate agents, then the chance of actually receiving 10mill are pretty farfetched The 10m baht unit is a four-bedroom plus four bathrooms unit with an area of 250 sqm. I was offered for one unit at 10m and declined because of the attractive rental of Baht 55,000/month. Baht40,000 sqm was too low for me.

they are many real estate agents who are honest with their backgrounds and those who are hiding their backgrounds on this tv section.I am no estate agent and do not need to hide my status as an estate agent and I am not in the market to sell my property now. I am in a buying mood. I sold my last unit two decades ago. You can read all my responses of this forum on all my subjects I have responded in the past year and will realise my bona fide status.

so any positive, feel great about the purchase comments by other posters should be taken with a pinch of salt on the old second hand condo market My response was made with cautionary notes depending on quicksilva's comments.

old buildings are struggling to find buyers.Depending on locations and management.

look at president park, it must be over 10 years old, well mainted, well serviced building and yet they are quting 42k a sqm for units and yet in the same soi the new buildings are fetching 120k sqm, i think the price says it all on the older units. The demand in bkk seems soley on the new units and the old units are just hoping to find a buyer Compare this with my 10m unit.

and has there are very little facts or figures for the secondhand condo market in bkk, then it leaves the new buyers of the day confused and gullable and available for the easy sell by the various property agents in bkk I cannot help people with such an attitude.

[dotcom]

Just for a giggle go look at a few units in the Taiping Towers, Soi Ekkamai one of the very first condos in BKK. I wouldn't rent there much less buy. The floor plans are horrible - the columns are massive - about 2 meters a side. The decoration is hit & miss. This one should be torn down but probably won't.

[Irene]

Just for a giggle go look at a few units in the Taiping Towers, Soi Ekkamai one of the very first condos in BKK. I wouldn't rent there much less buy. The floor plans are horrible - the columns are massive - about 2 meters a side. The decoration is hit & miss. This one should be torn down but probably won't.

According to the latest report from the Executive Committee of the Condo as presented to the General Meeting of Co-owners last week, in Nov. 2006, the Condo has 313 units of which 284 units are occupied by co-owners (136 units) and tenants (148 units) or 91% occupied. Does that look to a fair-minded person as buildings due to be torn down immediately.

[quiksilva]

they are many real estate agents who are honest with their backgrounds and those who are hiding their backgrounds on this tv section.

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[chownah]

Could it be that condos with larger (proportionate to value) mainenance funds will last longer because it shows a stronger commitment to maintaining the facility? I don't know but it seems that an underfunded maintenance and repair fund would tend to lead to premature decrepitude.....while a well managed and generous maintenance and repair fund could lead to an almost unlimited longevity.

Chownah

[quiksilva]

It would certainly help, one of the biggest challenges to a property manager is getting funding to do the projects they believe are necessary to improve / maintain asset value. For far too long co-owners have equated cheap management to good management. This is partly true of course a skilled property manager must make the most of your hard earned money but too many projects want grade A management on a grade C budget. Its an equation that doesn't work.

To Hampstead I know President Park better than most, I was GM there for two years. I will not go into details in a public forum but this is certainly not a building that I would present as an example of a great older property. They were not all created equal. FYI when I was there ('97-'99 for those that care) values were THB 55 - 60,000 per square meter.

Compare this building with say, Somkid Gardens, which is about the same age but has appreciated in value. Today units there fetch THB 110-115K psm but '97-'99 they were getting 'just' 95K.

The main differences, I think, is the size of the project and the proportion of co-owners who reside there and take an active role in the management of the property.

[mauiguy90]

in terms of structural soundness, resale, rentability...

i know this is a bit vague... but are there any rules of thumb regarding what age building is still ok to buy a condo in..

assuming decent management and upkeep, and some cosmetic rennovations from time to time.

do buildings reach an age where they need to be or must be demolished?

A building is too old when ...

...you twist the doorknob and it breaks off in your hand!

...you can blow the paint off the wall!

...you lean on the building and it sways the other way!

...you notice people are running out of the building instead of walking into it!

Actually, the building is probably too old if you are asking yourself this question.

P.S. I actually like older buildings.

[Irene]

in terms of structural soundness, resale, rentability...

i know this is a bit vague... but are there any rules of thumb regarding what age building is still ok to buy a condo in..

assuming decent management and upkeep, and some cosmetic rennovations from time to time.

do buildings reach an age where they need to be or must be demolished?

If you want to look at old buildings that have withstood the time well, then go and have a look at buildings along Rajdomnern Avenue and around Democracy Monument. Those were built just before the Second World War. Almost 70 years old.

Another one is at the Chinatown, a nine-floor building (used to be the highest in Bangkok), near to Texas car parks. Again another pre-war building still used today.

[Hampstead]

No i dont believe a word you are saying irene, about the offer on your 26 year old condo

The pricing on many secondhand condos of the older buildings runs at sometimes a 50% difference in the same buildings, even for accounting for the difference in the owners management of the unit, it just shows that estate agencies struggle to find a suitable price structure of older units

demand helps the price structure, the price structure of the new units is simpler due to the amount of buyers interest, but where is the buyers interest in the older buildings?

the real answer is that no-one really knows the state of the secondhand condo market in bkk in the older units

Lets not forget that the hamptons, fullertons, lakes, etc of today will be in 10-15 years looked upon as older buildings, with old designs and so-so managment

Quickslver

Somkid gardens looks a great return for those investors, but it is in the minority of well maintained older buildings.and as you put it, the price has risen by only 10-15k psqm over 10 years, not a great return in any world property market

and for every one somkid gardens there are perhaps 20 other projects in bkk which over the same period have seen their prices drop due to poor managment, and maintenance

with so many projects on offer and currently being planned over the coming years, not every project will be a longterm success

[quiksilva]

Hampstead, I never said that every older property was good, but there are gems out there.

Certainly Somkid has not appreciated by much over the last 10 years, condo's don't. I agree buildings with poor management actually begin to depreciate over time, (eg.President Park) therefore any project that actually appreciates or even just maintains its value in Bangkok stands out, is worth studying, which is why I mentioned Somkid as a good example of an older property.

Also consider that older desirable properties offer much better returns on investment, as they are very often able to command similar rental rates as new builds, but can be acquired at a much more reasonable rate per square meter.

Nobody said selecting a property for investment is easy, its not, if it was everyone who brought a unit would be a wealthy real estate tycoon, but unfortunately that is not the case.

Even if I was totally turned off the idea of buying old buildings, (Investing is very personal anyway) older properties should not be overlooked.

If I was investing in a new condo today I would want to be sure that I was buying in the 'Somkid Gardens' of the future. Not one of the other 20 or so that you pointed out, they cant all be long term successes can they?

The best way to do that is to look at what makes buildings like this stand apart from the crowd. Then, when you discover their formula for success, add your findings to your selection criteria.

[Irene]

Hamstead,

My comments in bold type:

No i dont believe a word you are saying irene, about the offer on your 26 year old condo Thank you for calling me a liar. Since I am not in an estate agency business, I ask myself what do I gain from this participation. Then, I realise that because of the wise and theoretical comments like yours

The pricing on many secondhand condos of the older buildings runs at sometimes a 50% difference in the same buildings, even for accounting for the difference in the owners management of the unit, it just shows that estate agencies struggle to find a suitable price structure of older units That is correct. Doesn't that support my experience in getting a better price than others. I am not interested in finding a suitable price structure to fit into a theory. But I am interested in getting good return on my investment under a given situation. One unit at that 26 year building was put under public auction by the executors of the Bankruptcy Court a few months ago. To my surprise, it could command Baht 6 million even though the unit has never been humanly touched for 26 years.

demand helps the price structure, the price structure of the new units is simpler due to the amount of buyers interest, but where is the buyers interest in the older buildings? Not as many as the brand new buildings but they are there especially those who find the location near to their work place or near to train stations or invest inexpensively for handsome rental income.

the real answer is that no-one really knows the state of the secondhand condo market in bkk in the older units You are right there are no standard prices because of more variety of quality and types of owners than the London market.

Lets not forget that the hamptons, fullertons, lakes, etc of today will be in 10-15 years looked upon as older buildings, with old designs and so-so managment At the Lakes (also another old building in your eye), there was one advert in the Post offering to sell at Baht 70,000 per sqm. There were five responses to that estate agent to buy the property. The quickest one got the deal. To you, that person may regret thereafter but she ventured to take the risk given that all the ideals being there- on the main road, opposite a park, next door to Foodland, walking distance to sky and underground train stations, (Asoke), and near to four high-rise office buildings. Her risks are earthquake and, for some, the price might be too high even though she can earn a return of 8% if she can find a tenant.

[Abrak]

It would certainly help, one of the biggest challenges to a property manager is getting funding to do the projects they believe are necessary to improve / maintain asset value. For far too long co-owners have equated cheap management to good management. This is partly true of course a skilled property manager must make the most of your hard earned money but too many projects want grade A management on a grade C budget. Its an equation that doesn't work.

To Hampstead I know President Park better than most, I was GM there for two years. I will not go into details in a public forum but this is certainly not a building that I would present as an example of a great older property. They were not all created equal. FYI when I was there ('97-'99 for those that care) values were THB 55 - 60,000 per square meter.

Compare this building with say, Somkid Gardens, which is about the same age but has appreciated in value. Today units there fetch THB 110-115K psm but '97-'99 they were getting 'just' 95K.

The main differences, I think, is the size of the project and the proportion of co-owners who reside there and take an active role in the management of the property.

Somkid Gardens might have done well for an 'older' building but lets face it - a 20% rise in value from the bottom of the market in '99 is nothing to write home about.

What worries me about condo investment in BKK is this decline with age. (Actually what tends to happen is that a rise in the overall market is matched by a decline with age. What I mean by this is that units sold in one location at say Bt60k are worth Bt60k/sqm 10 years later while new build there is selling at Bt90k/sqm.)

I wouldnt be that surprised if all those new condos in Suk 24 - that are now selling for Bt120k/sqm - are selling for Bt100k/sqm in 10 years time.

[torrenova]

I will readily admit to having near to no expertise as far as the Bangkok condo rental or sales market but I do have significant experience of the Pattaya market. It is my opinion that the better returns have come from the older buildings, though none so old as 26 years, but that has been tempered with the massive gains made, many off plan, on new builds in the last few years.

The yields on these new builds are far too low, when taken in light of their most recent transfer value or current sales price (unachievable in many cases). The majority of developments have been stagged by those involved with the overall development as enquiries made months before any formal advertising saw all the best units reserved, presumably either paid for or just lies from the developer to release piecemeal once an additional profit could be achieved.

Then you have developments where the developers have "disappeared". Enough on that one.

Management is the key and people here are not interested in building up a sinking fund for major future repairs. To give an example, a condo I have in London, though only 8 years old, already has an attributable singing fund of over £5000. This money is not lost. Were the property to be valued at say, £250,000 then there would be another £5000 to add on to reflect this. Paying Bt500 per month or some other ridiculous figure and then taking no active role in the management of the property does see misappropriation of funds such as happened at View Talay 2.

I do have worries about the absolute life of a building. They cannot go on forever and unlike houses, you cannot knock them down and start again individually. I suppose that there is a shelf life, unlike the mansion blocks in London which are excellent buys irrespective of whether they are 50, 75 or 100 years old.

[ray08]

It would certainly help, one of the biggest challenges to a property manager is getting funding to do the projects they believe are necessary to improve / maintain asset value. For far too long co-owners have equated cheap management to good management. This is partly true of course a skilled property manager must make the most of your hard earned money but too many projects want grade A management on a grade C budget. Its an equation that doesn't work.

To Hampstead I know President Park better than most, I was GM there for two years. I will not go into details in a public forum but this is certainly not a building that I would present as an example of a great older property. They were not all created equal. FYI when I was there ('97-'99 for those that care) values were THB 55 - 60,000 per square meter.

Compare this building with say, Somkid Gardens, which is about the same age but has appreciated in value. Today units there fetch THB 110-115K psm but '97-'99 they were getting 'just' 95K.

The main differences, I think, is the size of the project and the proportion of co-owners who reside there and take an active role in the management of the property.

Somkid Gardens might have done well for an 'older' building but lets face it - a 20% rise in value from the bottom of the market in '99 is nothing to write home about.

What worries me about condo investment in BKK is this decline with age. (Actually what tends to happen is that a rise in the overall market is matched by a decline with age. What I mean by this is that units sold in one location at say Bt60k are worth Bt60k/sqm 10 years later while new build there is selling at Bt90k/sqm.)

I wouldnt be that surprised if all those new condos in Suk 24 - that are now selling for Bt120k/sqm - are selling for Bt100k/sqm in 10 years time.

I have to agree with you , as i have asked in a forum is there a 2nd hand market ? and really no one has been able to show there is , in regards to above even in 10years bt100 will be hard to acheive because of the number of deveopments that will happen in the next 10 years

[Irene]

I wouldnt be that surprised if all those new condos in Suk 24 - that are now selling for Bt120k/sqm - are selling for Bt100k/sqm in 10 years time.

Some of them are selling at Baht100K now, (See Post Classified of today)

[jimbob123]

On 11/27/2007 at 12:05 PM, Abrak said:

Somkid Gardens might have done well for an 'older' building but lets face it - a 20% rise in value from the bottom of the market in '99 is nothing to write home about.

What worries me about condo investment in BKK is this decline with age. (Actually what tends to happen is that a rise in the overall market is matched by a decline with age. What I mean by this is that units sold in one location at say Bt60k are worth Bt60k/sqm 10 years later while new build there is selling at Bt90k/sqm.)

I wouldnt be that surprised if all those new condos in Suk 24 - that are now selling for Bt120k/sqm - are selling for Bt100k/sqm in 10 years time.

Interesting to see on Hipflat, average sales in Somkid Gardens is now at over 235,000/sqm. 

[jimbob123]

On 11/27/2007 at 11:50 AM, Irene said:

Hamstead,

My comments in bold type:

The Lakes today is selling at ฿208,181 per sqm