Do The Math

[fanciman]

I am not good at Math.

I don't know how to do the sums to decide if it is better to rent and invest, or buy an apartment.

Please, somebody help me.

Thank you!

[DisainaM]

where are you,

how long is your intention, to stay in Thailand,

do you have relyable thai contacts

[fanciman]

where are you,

how long is your intention, to stay in Thailand,

do you have relyable thai contacts

I am not in Thailand, at the moment, but will have a couple of chances to visit later this year.

I have a Thai friend who would help and not rip me off TOO much

[PattayaParent]

Why would you need Thai contacts to rent or buy a condo?

It would all depend on how long you intend to stay. I lived in my first condo I purchased for 10 years and 'saved' the amount that I would have paid in rent for it. I then sold it at a profit so effectively lived rent free AND made money. Of course you have to figure in how much money I could / would have made if I'd invested the lump sum and rented but I looked at it that I need a place to live and I want to own it and not be subject to the vagaries of a landlord and rent increases.

It would also depend on where you want to live and what you could afford 'cos if you pay cash to buy a place then you still need money to live off for X number of years.

The old adage in UK is that it's better to buy than rent as you pay the saved rent into a mortgage. But that doesn't always apply here unless you can get a mortgage.

[ray08]

I have never rented except for the last 3 years in Thailand , and intend to continue to Rent

The question that one should ask is

Buy In Thailand

Rent In Thailand

Rent In Thailand but buy overseas , so still in the property market

I am doing the last renting here but continue to buy overseas in markets where no Thai/Foreigner discrimination in the price or

ownership issues , eg Buying a house and actually owning the land, and where there is a real second hand market

So when you decide to rent or buy , if renting what do you do with the money you have left over???

[Razr]

As another poster pointed out, it all depends on your length of stay. If you're planning on being here for the term of a 20 to 30 year mortgage, there's absolutely no doubt that buying is smarter than renting, so long as you're talking about living in an area where typical Thai city rental ROI's are achieved (i.e. 8-15%).

[fanciman]

If you rent instead of buying, you do not have to pay a lot of money up front. All of that money that you pay up front could be invested, for example in US Govt Bonds, at about 5%. (US Govt bonds must be the benchmark for risk free investing.)

Without living extravagantly, I think you can rent somewhere quite nice in Bangkok for 10,000 baht a month.

Alternatively, you could buy a 30sqm condo nearish Asoke for ... (I don't know, help me out here, 3 million baht?)

This is not the right way to calculate it, (please help again)

10,000x12=120,000B/year

3,000,000/120,000=25 years

er, i am really not good at this but

half 3 million baht is 1.5 million baht times 25 years at 5% from govt bonds is

oh, i don't know. Compounding everything and that sort of thing. Present value/discounted future value/inflation

It is too complicated

[jdinasia]

Renting seems to be the answer for me. Things are often in flux here and being able to walk away from a condo and find a new place at any given moment works for me.

I do however pay my rent either 1x or 2x a year and get a decent discount for paying a minimum of 6 months in advance

[Razr]

I would expect a condo renting for 10K/month to be worth more in the 1.2-1.5M Baht region (if foreign owned) or 1'ish M Baht (if Thai owned).

The other thing you're not taking into account at all is the fact that over 25 years property values, and conversely rents, MUST rise. Else, break every historical record known to man

[Khun Jean]

For me it is really easy.

If you buy for around 3.000.000 the rent 'should' be around 25.000-30.000 baht a month.

(3.000.000 / 100 = 30.000)

If you can rent cheaper than that renting is better because money could be invested in something that makes more money than the rent will cost you. (Interest rates in Australia/New Zealand can be as high as 8%)

Exceptions are:

You don't want to rent because you would like to own.

You want to gamble that you can sell it later for a higher price.

You are the person that never moves so buying will be more cost effective in the long run.

You like to have big 'face' to say that you own the place.

You want to rip out everything and put in a new kitchen, bathroom etc...

[Razr]

If that's not enough, and you can't be bothered with the math, here's a really simplistic way of looking at it:

Why would anyone invest in a rental property if not to make a profit?

'nuff said?

[Khun Jean]

^western logic!

[vegas]

I paid 6,000,000 for my house.

My rent was 20k. If I live to be 70 I would have paid 7,000,000 in rent.

Plus my daughter gets thye house when I croak.

[clausewitz]

The other thing you're not taking into account at all is the fact that over 25 years property values, and conversely rents, MUST rise. Else, break every historical record known to man

Wow, tell that to the Japanese where property prices are half that of what they were 18 years ago.

[Khun Jean]

I paid 6,000,000 for my house.

My rent was 20k. If I live to be 70 I would have paid 7,000,000 in rent.

Plus my daughter gets thye house when I croak.

That is about 30 years.

The 6 million invested would be at least 30 million and probably around 50 million in the same timespan.

The condominium in that time is probably demolished or very rundown.

And if it is not easy to sell the money is locked up and not freely available.

I would go for the 20K. And if it is not to my liking anymore i walk away and find something better.

[egg6447]

I paid 6,000,000 for my house.

My rent was 20k. If I live to be 70 I would have paid 7,000,000 in rent.

Plus my daughter gets thye house when I croak.

nuff said fanciman, your age, how long you expect to live and all the other personal factors we can only fantasise about, if your paying cash go for it , if your looking for a mortgage your fantasising. read my child gets the house when i die...sweet.

[egg6447]

I paid 6,000,000 for my house.

My rent was 20k. If I live to be 70 I would have paid 7,000,000 in rent.

Plus my daughter gets thye house when I croak.

That is about 30 years.

The 6 million invested would be at least 30 million and probably around 50 million in the same timespan.

The condominium in that time is probably demolished or very rundown.

And if it is not easy to sell the money is locked up and not freely available.

I would go for the 20K. And if it is not to my liking anymore i walk away and find something better.

khun jean, the 6ml is invested, point one nill and void. never buy a condo,its only a lease and yes it will be run down.15 all, , piont three good if your freelance, a settaled family man best to buy.30yrs ago,approx, i bought a place for 11kpds, today a guess only, 300kpds. easy when you know what your doing.

[vegas]

Yeah but I have my own house! Sweet.

[Naam]

If you rent instead of buying, you do not have to pay a lot of money up front. All of that money that you pay up front could be invested, for example in US Govt Bonds, at about 5%. (US Govt bonds must be the benchmark for risk free investing.)

you need to update your data Fanciman. no such thing (anymore) like U.S. Government Bonds yielding 5% even the 30Y longbond is down to 4.17%

[thaigene2]

The other thing you're not taking into account at all is the fact that over 25 years property values, and conversely rents, MUST rise. Else, break every historical record known to man

Wow, tell that to the Japanese where property prices are half that of what they were 18 years ago.

Further to that - I've paid the same rent for roughly seven years. No rise - meanwhile the property market has increased in "value" by what? 30%? Now wouldn't it just suck if you bought a place in Japan in 1990, only to need to sell now to pay for your medical bills or the like?

You think that can happen in Japan but not Thailand? They said it cloudn't happen in the US either.