Condo Purely As An Investment

[Trollster]

If you had a bit of extra cash where would you put it to work? Options include condos to let in Samui, Hua Hin/Cha-Am, Pattaya or Rayong. I realize that the money could be put into equities or commodities but I am looking for some insight from members who have been active condo investors in the areas mentioned. I believe that the rental yields and capital appreciation on condos could be attractive for a long term investor. Thanks for your comments.

[torrenova]

Current yields on mid and top range condos in Pattaya are shit. Capital appreciation ? you might be heading for a loss, negated by the baht exchange rate appreciation if you bought before currencies slumped. Some condos are just asking loony prices.

There are some fair buys around if you know the building and the rental market. A lot just don't nake any sense from any viewpoint unless you hope someone will be more stupid than you and pay more for it than you did.

[misterman21]

If you had a bit of extra cash where would you put it to work? Options include condos to let in Samui, Hua Hin/Cha-Am, Pattaya or Rayong. I realize that the money could be put into equities or commodities but I am looking for some insight from members who have been active condo investors in the areas mentioned. I believe that the rental yields and capital appreciation on condos could be attractive for a long term investor. Thanks for your comments.

I paid 2.47 ml for a high floor condo in new development in pattaya - just completed. I am currently asking 2.35ml whilst the same units - even on lower floors - are being marketed by thai speculators at 3.4ml.

Seems the thais believe everything is well!!

Edited February 15, 2008 by misterman21

[JimmyTheMook]

Rental income here is tax free

If you have money and can afford to diversify , why not ?

[cclub75]

I paid 2.47 ml for a high floor condo in new development in pattaya - just completed. I am currently asking 2.35ml whilst the same units - even on lower floors - are being marketed by thai speculators at 3.4ml.

Seems the thais believe everything is well!!

That's the gasoline of the speculation.

For Pattaya, check this out.

And for the market in Bangkok, read this.

"Over supply" and "speculation"... those are the words pronounced by 2 thais working in real estate business.

[ray08]

If you had a bit of extra cash where would you put it to work? Options include condos to let in Samui, Hua Hin/Cha-Am, Pattaya or Rayong. I realize that the money could be put into equities or commodities but I am looking for some insight from members who have been active condo investors in the areas mentioned. I believe that the rental yields and capital appreciation on condos could be attractive for a long term investor. Thanks for your comments.

I paid 2.47 ml for a high floor condo in new development in pattaya - just completed. I am currently asking 2.35ml whilst the same units - even on lower floors - are being marketed by thai speculators at 3.4ml.

Seems the thais believe everything is well!!

Refreshing to hear a true view of the market from a real seller ,not typical people on forum saying how much they have made on property without actually selling it for REAL money

[JimmyTheMook]

If you had a bit of extra cash where would you put it to work? Options include condos to let in Samui, Hua Hin/Cha-Am, Pattaya or Rayong. I realize that the money could be put into equities or commodities but I am looking for some insight from members who have been active condo investors in the areas mentioned. I believe that the rental yields and capital appreciation on condos could be attractive for a long term investor. Thanks for your comments.

I paid 2.47 ml for a high floor condo in new development in pattaya - just completed. I am currently asking 2.35ml whilst the same units - even on lower floors - are being marketed by thai speculators at 3.4ml.

Seems the thais believe everything is well!!

Refreshing to hear a true view of the market from a real seller ,not typical people on forum saying how much they have made on property without actually selling it for REAL money

Sounds like the new View Talay - never looked like a good buy to me

Great Location

[Gary A]

Condo prices right now are absolutely insane while renting a condo is very cheap. Doesn't look like a good investment to me.

[xyborg]

<br />Condo prices right now are absolutely insane while renting a condo is very cheap. Doesn't look like a good investment to me.<br />

<br /><br /><br />

So if i told you i bought four condos at 1.2 million each and rent all of them out at 14-15000 baht per month and they now DO sell for between 1.6 million and upwards would you be surprised?

I make that a 12% rate of return and service charge is on top of rental. I have not been empty in the last 20 months on any of them with two let until july 2009. My next vacancy will be April this year and I already have a customer waiting who wants a 2 year contract.

[xyborg]

<br />If you had a bit of extra cash where would you put it to work? Options include condos to let in Samui, Hua Hin/Cha-Am, Pattaya or Rayong. I realize that the money could be put into equities or commodities but I am looking for some insight from members who have been active condo investors in the areas mentioned. I believe that the rental yields and capital appreciation on condos could be attractive for a long term investor. Thanks for your comments.<br />

<br /><br /><br />

I would say the only real prospect is Bangkok the others are too seasonal whereas in Bangkok you can pick up international business customers as well as long term tourists. Increase your options

[Chopper]

So if i told you i bought four condos at 1.2 million each and rent all of them out at 14-15000 baht per month and they now DO sell for between 1.6 million and upwards would you be surprised?

I make that a 12% rate of return and service charge is on top of rental. I have not been empty in the last 20 months on any of them with two let until july 2009. My next vacancy will be April this year and I already have a customer waiting who wants a 2 year contract.

I agree with xyborg. If you know the market investing in condos is an excellent investment! Many years ago I purchased a block of condos off plan at less than ฿ 20,000 per sq./m. They are all full and produce excellent yields and similar condos are constantly being sold in the same building for nearly double my initial investment.

I would add this is the exception rather than the norm. If you do your due diligence, study the market it is not rocket science. I would also add that if I lost my initial investment tomorrow the rental income to date would have adequately compensated me to cover this loss including accrued interest that I would also have lost had the money remained in the bank.

Further I would advise the well known maxim: only invest money that you can afford to lose.

Edit/ Typo.

Edited February 16, 2008 by Chopper

[Gary A]

<br />Condo prices right now are absolutely insane while renting a condo is very cheap. Doesn't look like a good investment to me.<br />

<br /><br /><br />

So if i told you i bought four condos at 1.2 million each and rent all of them out at 14-15000 baht per month and they now DO sell for between 1.6 million and upwards would you be surprised?

I make that a 12% rate of return and service charge is on top of rental. I have not been empty in the last 20 months on any of them with two let until july 2009. My next vacancy will be April this year and I already have a customer waiting who wants a 2 year contract.

Yes, I would say that is a good investment but since you bought them some time back, I'd say you would realize a very handsome profit if you were to sell them. I also have a condo that I lease to a friend of mine. I have had it for about five years and it HAS doubled in price. And, YES, I have had cash offers but it is simply not for sale because I don't think I could replace it for the selling price.

[Irene]

Rental income here is tax free

No, rental income is not tax free. It is subject to graduated tax rates as from 5% to 37%.

[Irene]

<br />If you had a bit of extra cash where would you put it to work? Options include condos to let in Samui, Hua Hin/Cha-Am, Pattaya or Rayong. I realize that the money could be put into equities or commodities but I am looking for some insight from members who have been active condo investors in the areas mentioned. I believe that the rental yields and capital appreciation on condos could be attractive for a long term investor. Thanks for your comments.<br />

<br /><br /><br />

I would say the only real prospect is Bangkok the others are too seasonal whereas in Bangkok you can pick up international business customers as well as long term tourists. Increase your options

Yes, in general, condo investment is better in Bangkok.More liquidity and more rental chances. To have a fall back situation, it is best to be 100 metres to any rail stations.

I admire xyborg and others to share their experiences on the good side of investing in a condo. For those new investors, just remember that property in Thailand is not as liquid as in other first world countries. So therefore I would not recommend anyone to invest in Thailand property with his last penny.

[barky]

<br />Condo prices right now are absolutely insane while renting a condo is very cheap. Doesn't look like a good investment to me.<br />

<br /><br /><br />

So if i told you i bought four condos at 1.2 million each and rent all of them out at 14-15000 baht per month and they now DO sell for between 1.6 million and upwards would you be surprised?

I make that a 12% rate of return and service charge is on top of rental. I have not been empty in the last 20 months on any of them with two let until july 2009. My next vacancy will be April this year and I already have a customer waiting who wants a 2 year contract.

I'd say you were extremely LUCKY. Where were you when I needed you?

Seriously, your case is rare in the extreme (lucky you). Generally, my best advice to anyone is to keep your money in your pocket or overseas. The market is saturated now, but the prices are still too high. Renters have a very wide choice. Expat numbers in Thailand are a little down. The quality of buildings is generally poor. If things go wrong your're fuc_ked. You will almost certainly never get back what you paid for it (that's assuming you can find a buyer sometime in the future). Then you will have difficulties getting your money back out of the country. If you get kicked out of the country you're fuc_ked. Almost everything is stacked against you. But, if you have money to burn, go ahead, make some Thais' day.

Look I could go on and on. Yes you COULD be lucky you MIGHT make a buck, but don't bet on it.

Please do yourself a favour DON'T.

[Samuian]

as one of the posted links Link: states already an oversupply... it's not the time unless as it has been written already you come across a lucky deal!

Do your homework first and well!

Here on Samui almost everyday some new project comes up... and many of the finished buildings/units/condosare waiting for an "investor"....

as the land prices are ridiculous it doesn't even make sense for an "outsider" to build units for the local market - which saw some good returns.. besides, by now the locals know... so why sell the land if they can build units themselves - unless it carries the profit already... then it doesn't make sense any more - does it?

then there isn't only Thailand...

[misterme]

I just bought in Patong, Phuket.

I bought a small condo, in a 14 year old hotel. The prices for new buildings is outrageous, but this unit was within my budget.

I cleaned and painted it, bought a nice new bed, and cheap sofa and fridge. It's now rented, and the fellow is happy and now wants to stay a year. At current rental rates, I get all my investment back after 62 months. The Chanote is in my name.

I'd originally planned to flip it, but have now decided to sit on it a while.

For the Prognosis Negative crowd. Even if I cannot sell it, I will still have made my money back after several years and have a nice place a few hundred meters from the beach that is mine. Not bad if you ask me.

[cclub75]

I cleaned and painted it, bought a nice new bed, and cheap sofa and fridge. It's now rented, and the fellow is happy and now wants to stay a year. At current rental rates, I get all my investment back after 62 months. The Chanote is in my name.

For the Prognosis Negative crowd. Even if I cannot sell it, I will still have made my money back after several years and have a nice place a few hundred meters from the beach that is mine. Not bad if you ask me.

It's not "negative". But you mix your own -small- experience on the ground, with the market in its whole.

Some individuals will always make good deals, by renting, even if the market is crashing. Niches are always available. Good for you.

My point is : your positive experience doesn't reduce, nor cancel in any way the observations and datas (negative) for the whole market.

[Trollster]

Thanks for your input but I was asking about investing in different areas. I agree with most of what has been discussed and realize that prices are higher today than a few years ago. I am looking at investing money in a condo in either Rayong - Phuphatara, Hua Hin - Golden Beach or Talay Samran, Pattaya - various or Samui - Ocean View condos or Samui Sanctuary. If you have specific knowledge of any or all of these projects - I would love to hear your viewpoint. Looking forward to reading more....

[xyborg]

<br />

<br />Condo prices right now are absolutely insane while renting a condo is very cheap. Doesn't look like a good investment to me.<br />

<br /><br /><br /><br /><br />So if i told you i bought four condos at 1.2 million each and rent all of them out at 14-15000 baht per month and they now DO sell for between 1.6 million and upwards would you be surprised?<br />I make that a 12% rate of return and service charge is on top of rental. I have not been empty in the last 20 months on any of them with two let until july 2009. My next vacancy will be April this year and I already have a customer waiting who wants a 2 year contract.<br />

<br /><br /><br />I'd say you were extremely LUCKY. Where were you when I needed you? <br />Seriously, your case is rare in the extreme (lucky you). Generally, my best advice to anyone is to keep your money in your pocket or overseas. The market is saturated now, but the prices are still too high. Renters have a very wide choice. Expat numbers in Thailand are a little down. The quality of buildings is generally poor. If things go wrong your're fuc_ked. You will almost certainly never get back what you paid for it (that's assuming you can find a buyer sometime in the future). Then you will have difficulties getting your money back out of the country. If you get kicked out of the country you're fuc_ked. Almost everything is stacked against you. But, if you have money to burn, go ahead, make some Thais' day.<br />Look I could go on and on. Yes you COULD be lucky you MIGHT make a buck, but don't bet on it.<br />Please do yourself a favour DON'T.<br /><br /> <br /><br /><br />

<br /><br /><br />

You make your own luck unless you are Thai of course then 10 amulets will do it for you. Look hard before you leap! Re the op asking about certain areas just warning you of the disadvantages of "some" tourist areas.

[billaaa777]

I am now in my 4th year of buying, renovating and selling condos in Pattaya. The first year my ROI was 75%, the second year it was 135% and the third year it was 50%. But, then again what do I know, it is much safer to keep your money in your bank in your home country and much poorer too.

[ray08]

In Every Real eastate Market ,unless it is going straight up ,there are winners and losers in , For the Bangkok market the same applies , what the difference here i believe is that the odds on picking winners in this paticular time are not as good as they should be

[misterme]

To the original poster.

You need to crunch the numbers yourself. In every market there are good and bad deals.

If I were to guess, I'd say there are more bad deals. Thais have a way of overestimating/picking numbers out of a hat and declaring the amount they want to sell for. They sometimes find a buyer. Smart people keep looking.

[quiksilva]

as one of the posted links Link: states already an oversupply... it's not the time unless as it has been written already you come across a lucky deal!

Do your homework first and well!

Here on Samui almost everyday some new project comes up... and many of the finished buildings/units/condosare waiting for an "investor"....

as the land prices are ridiculous it doesn't even make sense for an "outsider" to build units for the local market - which saw some good returns.. besides, by now the locals know... so why sell the land if they can build units themselves - unless it carries the profit already... then it doesn't make sense any more - does it?

then there isn't only Thailand...

I'd be just a little cautious as citing a website called "Thai Crisis" as your source of unbiased information!

Edited February 19, 2008 by quiksilva

[trajan]

If you had a bit of extra cash where would you put it to work? Options include condos to let in Samui, Hua Hin/Cha-Am, Pattaya or Rayong. I realize that the money could be put into equities or commodities but I am looking for some insight from members who have been active condo investors in the areas mentioned. I believe that the rental yields and capital appreciation on condos could be attractive for a long term investor. Thanks for your comments.

Sotheby's Realty seem to have a nice list of properties around Phuket, Samui, Phang Nga, etc. which might give you some ideas: Sotheby's Realty

[Irene]

If you had a bit of extra cash where would you put it to work? Options include condos to let in Samui, Hua Hin/Cha-Am, Pattaya or Rayong. I realize that the money could be put into equities or commodities but I am looking for some insight from members who have been active condo investors in the areas mentioned. I believe that the rental yields and capital appreciation on condos could be attractive for a long term investor. Thanks for your comments.

Trollster,

I think I fall into your category of a seasoned investor in condos. Your belief of yields and capital gains on condos being attractive for a long term investor is quite correct, historically for me. (I would not tell you the percentage of the return on capital because some people in this forum would just call me a liar in view of their hang-up idea of Thailand being a third world and bad for property investment). But I have never invested in the seaside resorts for rental because I know Bangkok market far better and don't feel comfortable in travelling. I bought a few condo units for personal uses in Jomtien because of the view and serenity and the local agents have been asking to buy two and a half times of the cost in 1999.

If I were you, I would not invest in the areas you mentioned. I would prefer to invest in the area that I and my family know of the location and of the rental market, i.e. Bangkok, where the rental market is more matured and the chance of capital gain is greater and safer. The worst thing about buying a condo is not able to rent out and naturally not able to sell quickly while you have to foot the monthly maintenance fees. Fearing for this event, I therefore prefer to invest in condos next to the BTS or MRT stations. Though the price is far higher but I feel that I would have a safety margin in liquidating or renting. Lately, I have gone into a few projects under that basis with the price ranging from Baht 75,000sqm to Baht120,000sqm. (Mostly in Sukhumvit area and not beyond Soi 67). They are off the plan investment in which you put in deposits and instalments etc. covering 30% of the price payable over a period of 30 months while the buildings would be completed in 36 months. If you are lucky or your strategy is spot on, you can make a profit of 100% on your 30% deposits. But if the economy turns sour and the market truly collapses, then your chance of losses on the total deposit sum is there. I do not advocate for anyone to invest in the way I do since it is up to the judgment of each investor.

I write because I found your question was well put and thought that you were truly seeking for right information. I just share my experience with you. I may be successful historically but prospectively I may be wrong.

[jitagon]

Rental income here is tax free

If you have money and can afford to diversify , why not ?

Not according to both my lawyer and my accountant it's not!

[VegasVic]

Current yields on mid and top range condos in Pattaya are shit. Capital appreciation ? you might be heading for a loss, negated by the baht exchange rate appreciation if you bought before currencies slumped. Some condos are just asking loony prices.

There are some fair buys around if you know the building and the rental market. A lot just don't nake any sense from any viewpoint unless you hope someone will be more stupid than you and pay more for it than you did.

Good point torrenova! The greater fool theory has been at work for a while now in Thailand (especially in Pattaya, Phuket, Hua Hin, Koh Samui and to a slightly lesser degree BKK), but the situation is about to change as the U.S. and European economies are declining and the baht keeps on appreciating the pool of "greater fools" will soon be drying up. The perfect storm is not far offshore for thai real estate, all you have to do is compare offerings for sale currently as compared with last year, the number has nearly doubled on most of the thai real estate websites that I check out. One website for Chiang Mai property has an option "property with price reductions", last year at this time that option would have brought up 2 pages of homes and condos, I checked it out last week and there were 11 pages of price reductions. I know this flys in the face of the old thai tradition of "ask whatever you think your house is worth" even if it means that you have to wait 5 or 6 years to sell it. Perhaps what is going on in Chiang Mai may filter down through the rest of the country, after all it is not too late for the thai people to develop at least some degree of business accumen! Of course if there are no buyers I guess it really doesn't matter what you price the property at

[kanderson]

If you had a bit of extra cash where would you put it to work? Options include condos to let in Samui, Hua Hin/Cha-Am, Pattaya or Rayong. I realize that the money could be put into equities or commodities but I am looking for some insight from members who have been active condo investors in the areas mentioned. I believe that the rental yields and capital appreciation on condos could be attractive for a long term investor. Thanks for your comments.

I think that Thai's can buy much cheaper - and rent property out much cheaper. I'd stay clear unless you arn't that concerned with ROI. For me - I jumped in instead of buying a luxury car - small time stuff.