Buy To Let Property.

[Richb2004v2]

I have been considering buying a small property in Thailand as an investment, with a view to renting it out. I already have a house that I live in with the wife. I am thinking of something around 1 to 2 million baht. A bungalow would be ideal close to where I live. The main thing that puts me off is the uncertainty I feel from dealing with Thais. In this I mean that I don’t understand the mentality of Thais, and as they do most things different to the ferang I don’t know what would be the hazards involved. Also I always feel that Thai houses aren’t built to last. There are a good few empty houses on our estate waiting to be rented. However there are some interesting options. I missed out on a house over the road that went quite cheap and now has a 12 month tenant and the rate would have made the option viable.

What are you opinions on this and have any of you done well from it, or otherwise?

This question comes as I am thinking of getting something else in the UK but wonder if I might be as well putting the money into something here.

Any ideas?

[londonthai]

if you are going to rent to thai, than it's not much profit in it, competition is huge (as you can see on your estate) - if you have chances investing in something else, don't hesitate.

[Cuban]

You are more likely to make money in your own country than in Thailand, if you have the cash I understand that UK house prices are on a downward cycle so a good deal might be availible locally. Remote rentals the other side of the world are difficult to manage at a profit, no direct experiance but seen friends lose money by doing this.

[YoungFarang13]

you will do better buying in another country and renting there as thailand rents are very low, but if you dont want to be bothered, i mean, its real estate so youll definitely make money long term, just not a huge sum imo depending on how good/bad of a prop/loc you pick.

[chiangmaibruce]

If you want to invest in Thailand, are interested in the property sector, want a reasonable return but don't want a whole lot of headaches/heartaches ... perhaps give some thought to investing some money in a couple of the Thai listed property funds ... take a look here for example:

http://research.kgieworld.co.th/recom.nsf/..._04_18_e_th.pdf

[alive555]

If you want to invest in Thailand, are interested in the property sector, want a reasonable return but don't want a whole lot of headaches/heartaches ... perhaps give some thought to investing some money in a couple of the Thai listed property funds ... take a look here for example:

http://research.kgieworld.co.th/recom.nsf/..._04_18_e_th.pdf

i wouldnt think about it too long - they are pretty all trading below their NAV. Theres a good reason for that.

[rixalex]

As a foreigner, how do you plan to buy land in Thailand?

[chiangmaibruce]

Well don't keep us in suspense alive555 ... do tell...

Seriously, I'm interested to hear your view on this issue - both in terms of the investment potential of property funds per se & also in terms of their risk-return comparison to the op's idea of buying and renting out property in Thailand (presumably outside of BKK or popular coastal areas)

- CB

[alive555]

Well don't keep us in suspense alive555 ... do tell...

Seriously, I'm interested to hear your view on this issue - both in terms of the investment potential of property funds per se & also in terms of their risk-return comparison to the op's idea of buying and renting out property in Thailand (presumably outside of BKK or popular coastal areas)

- CB

Basically the reason for their poor performance is as follows;

1. Overvalued assets at the launch of the IPO

2. v mature product not much upside rather low grade, some title problems.

3. Low liquidity

4. Lack of understanding of these funds by the typical investor in the SET

5. High management fees

6. Zero gearing (unlike a western style Reit for example)

ie i wouldnt buy it myself. BUT i would buy residential to rent if you can get the right product at the right price. 99% of residential rents go the landlord tax free. so technically speaking if say you could get 5% net plus say 3-5%% capital gain it all looks reasonable assuming its well located no chance of blocked view etc. The way building costs are heading dont expect the price to come down anywhere that fast.

the one real estate fund i would look at is the office sector, but not now , in say 1 year as that markets got a 100% upside in it, based on replacement cost alone.

[Richb2004v2]

As a foreigner, how do you plan to buy land in Thailand?

The same way I bought the house that I live in, via the wife.

I'm not really looking to make any significant money from this, especially in the short term. I am thinking more as a longer term investment. If I buy another house in the UK I will put down a deposit. For the same deposit I could just about buy a house here in Thailand. It will be some time before I see any returns from the Uk property, and I consider this a pension fund. With the Thai house I could theortically be getting a small return immediately and maybe the house would appretiate over time. I think that either way its better then the money sitting in my account doing nothing very much.

[actiondell4]

And why doesnt the OP buy a house in his own country?

Well.................think about this,having to file a tax return each year,dealing with real estates to manage the property etc etc,so far better to buy in Thailand.

[deckx]

Not sure what property you can get for 1-2 mill ??

I have a couple of properties in pattaya, everthing is fine when they are rented out but when they are between tennets its a pain in the ass, with deposits, sorting out bills, getting phone changed over, sometimes they can be sitting there for months ( its not as if there is a shortage)

My mrs does all that and the rent pretty much covers our household expenses but then as the properties age it gets harder to rent as there are so many new projects around.

Edited April 29, 2008 by deckx