Should I Rent Or Should I Buy

[BEENTHEREDONETHAT]

According to a builder I know and believe, the cost of most building material is up over 15% in the last year some item i.e.cement is up considerable more. As long as oil goes up everything else will go up. Going down is always a much slower if at all proposition.

[thaigene2]

the decision owning or renting is based on the lifestyle of an individual. it makes no sense to discuss the question "what is better?"

Not true at all. Not counting speculators, there are two classes of buyers: those rich enough to be able to consider housing costs purely as an expense and those who must also take into account the long-term effects on their net worth. If you are fortunate enough to count yourself among the happy few, then my hat is off to you. However, most of us find ourselves in the latter camp.

we are not in disagreement. i repeat that it depends on the individual lifestyle and of course the financial means which may vary.

But his main point is that it makes perfect sense to question "what is better" for what is probably the largest percentage of potential buyers for all the reasons he states - it's not just lifestyle - it's what is a better choice for that group of people (inc me). If money is no object, or at least not a major factor, only then is it a "lifestyle" choice.

Edited June 8, 2008 by thaigene2

[BEENTHEREDONETHAT]

If you are staying long term (read forever) in LOS and assuming you have the finances and assuming you are not a financial wizard. Chances are you will be earning much less than inflation. So the cost of renting housing in time can limit what and where you live. If you buy you do not have that worry.

[CaptHaddock]

But his main point is that it makes perfect sense to question "what is better" for what is probably the largest percentage of potential buyers for all the reasons he states - it's not just lifestyle - it's what is a better choice for that group of people (inc me). If money is no object, or at least not a major factor, only then is it a "lifestyle" choice.

Correct.

[pkrv]

But his main point is that it makes perfect sense to question "what is better" for what is probably the largest percentage of potential buyers for all the reasons he states - it's not just lifestyle - it's what is a better choice for that group of people (inc me). If money is no object, or at least not a major factor, only then is it a "lifestyle" choice.

Correct.

I don't have a crystal ball but IMO Thailand is no longer rock bottom price for the region (IMO it does not have to be), and IMO it is a country that is accelerating - If it has a short term blip up or down in the property market, I don't actually think it will matter. However look at our language 'if you are sailing close too close to the wind', 'not prepared for the long haul', 'sailing on empty (or whatever)' the list goes on you could be in serious trouble say 20 years down the line if you rent, I don't know. BUT yes you do need an income this is the flip side of the coin. Your situation your choice, but I think the rental option could be extended by looking elsewhere in the region, don't know.

However I am at a loss to say what other destination I would choose to 'reduce purchase costs'.

Edited June 8, 2008 by pkrv

[CaptHaddock]

But his main point is that it makes perfect sense to question "what is better" for what is probably the largest percentage of potential buyers for all the reasons he states - it's not just lifestyle - it's what is a better choice for that group of people (inc me). If money is no object, or at least not a major factor, only then is it a "lifestyle" choice.

Correct.

I don't have a crystal ball but IMO Thailand is no longer rock bottom price for the region (IMO it does not have to be), and IMO it is a country that is accelerating - If it has a short term blip up or down in the property market, I don't actually think it will matter. However look at our language 'if you are sailing close too close to the wind', 'not prepared for the long haul', 'sailing on empty (or whatever)' the list goes on you could be in serious trouble say 20 years down the line if you rent, I don't know. BUT yes you do need an income this is the flip side of the coin. Your situation your choice, but I think the rental option could be extended by looking elsewhere in the region, don't know.

However I am at a loss to say what other destination I would choose to 'reduce purchase costs'.

For a place like Thailand, including BKK, it seems odd to focus on the possibility of escalating rents as a long-term threat for the resources of a retiree. There seems to be a large and growing supply of rental housing readily available and no building restrictions. I certainly don't read constant complaints from expats on Thaivisa that they have been priced out of their flat when lease renewal time came around and they wish they had bought when they had the chance. No one here ever complains about rents as far as I can tell. They complain about inflation, but not about rents.

While it's true that inflation, in general, is the enemy of the retiree with fixed resources, the principal capacity he has to cope with inflation is flexibility, the ability to adjust his standard of living. And his ability to relocate is the most important flexibility he has, a big benefit of no longer having to remain in one area for a career/job. That's true for those of us still in the US, but even more so for expats. When you own property, particularly where the secondary market is poorly developed as in Thailand, you give up the ability to relocate quickly in response to adverse changes in legal climate, exchange rates, family situation, health, etc. Owning has always seemed to me to be a long-term commitment to an area that you no longer have to make when you are retired. You have to be willing to ride out a property cycle or else face the risk of having to sell in a down market.

The option of tying up a large part of net worth in a residence wouldn't be appealing to me unless owning were substantially cheaper than renting, which does not appear currently to be the case in Thailand. Thais have shown a preference for owning property beyond what the economic advantage indicates. We know this because we hear so often that they don't sell when the market drops and they don't rent at all if they can't get their price. Well, the way to take advantage of the Thai mispricing of property is to rent.

Your argument about Thailand property values possibly moving up in the future is an argument for speculation. In my opinion, retirees with limited resources have no business engaging in speculation since they risk unacceptable losses if the future turns out other than forecast. Renters do not risk unacceptable losses since they can always move.

[pkrv]

But his main point is that it makes perfect sense to question "what is better" for what is probably the largest percentage of potential buyers for all the reasons he states - it's not just lifestyle - it's what is a better choice for that group of people (inc me). If money is no object, or at least not a major factor, only then is it a "lifestyle" choice.

Correct.

I don't have a crystal ball but IMO Thailand is no longer rock bottom price for the region (IMO it does not have to be), and IMO it is a country that is accelerating - If it has a short term blip up or down in the property market, I don't actually think it will matter. However look at our language 'if you are sailing close too close to the wind', 'not prepared for the long haul', 'sailing on empty (or whatever)' the list goes on you could be in serious trouble say 20 years down the line if you rent, I don't know. BUT yes you do need an income this is the flip side of the coin. Your situation your choice, but I think the rental option could be extended by looking elsewhere in the region, don't know.

However I am at a loss to say what other destination I would choose to 'reduce purchase costs'.

For a place like Thailand, including BKK, it seems odd to focus on the possibility of escalating rents as a long-term threat for the resources of a retiree. There seems to be a large and growing supply of rental housing readily available and no building restrictions. I certainly don't read constant complaints from expats on Thaivisa that they have been priced out of their flat when lease renewal time came around and they wish they had bought when they had the chance. No one here ever complains about rents as far as I can tell. They complain about inflation, but not about rents.

While it's true that inflation, in general, is the enemy of the retiree with fixed resources, the principal capacity he has to cope with inflation is flexibility, the ability to adjust his standard of living. And his ability to relocate is the most important flexibility he has, a big benefit of no longer having to remain in one area for a career/job. That's true for those of us still in the US, but even more so for expats. When you own property, particularly where the secondary market is poorly developed as in Thailand, you give up the ability to relocate quickly in response to adverse changes in legal climate, exchange rates, family situation, health, etc. Owning has always seemed to me to be a long-term commitment to an area that you no longer have to make when you are retired. You have to be willing to ride out a property cycle or else face the risk of having to sell in a down market.

The option of tying up a large part of net worth in a residence wouldn't be appealing to me unless owning were substantially cheaper than renting, which does not appear currently to be the case in Thailand. Thais have shown a preference for owning property beyond what the economic advantage indicates. We know this because we hear so often that they don't sell when the market drops and they don't rent at all if they can't get their price. Well, the way to take advantage of the Thai mispricing of property is to rent.

Your argument about Thailand property values possibly moving up in the future is an argument for speculation. In my opinion, retirees with limited resources have no business engaging in speculation since they risk unacceptable losses if the future turns out other than forecast. Renters do not risk unacceptable losses since they can always move.

I think this is a superb reply and directly fits one of the intested group. I particularly liked "the ability to adjust his standard of living. And his ability to relocate is the most important flexibility he has"

I believe that essentially the strategy could/would be used to spread out remaining wealth over a lifetime, which could be critical to some people.

Correct on its all just speculation, but you would have to keep a constant eye on the situation, and be prepared to shift countries before things get tough and diminish reserves.

IMO leaving something for future generations requires a different approach, but may not be possible for all.

I think the diversity of thoughts on Buy/Rent is also reflected in the two arguments?

[unforgiven]

I have read avidly a recent a thread on the merrits (or not) of the 30+30+30 lease in Thailand. There is a strong body of people here that feel that they are at best risky and at worst a scam. I can see both points of view. And as has allready been said it is often dependent on personal circumstances. Having also read about the risks associated in the land/property in the Thai wifes name and the expense of the company route, I am seriously thinking for myself renting is the answer. I base this on the following.

1. Many here advise only to risk in LOS what you can afford to walk away from. Whilst I find this a cynical view I am not stupid enough not to know it is based on a large number of real life experiences.

2. At 55 (and married to a Thai) lets say I have another 30 years. Say I rent a home for 35,000bht per month over 30 years = 12.6 million baht. The same home is for sale for 9.6million Bht at the moment. so if I rent I would be paying an additional 3 million bht.

3. The monthly rent for the 30 years would come from interest on capital invested.

4. The rent + house runnning costs + domestic help would representwould only represent 1/3 of my monthly interest.

5. For sure after 30years I would have no capital appreciation but I have done all the "climbing the house ladder stuff b4 and have how cashed my chips in. Allowing for a 2% p/a top up of my capital from the annual intrest I would be in the same position in 30 years. ......... living comfortably with little risk.

Have I missed the plot?. or for my particular set of circumstances should I rent or should I buy.

you have a thai wife and possibly a thai baby and she has a family.you are #3 or 4 at best,even if you don't realise it.............go ahead buy that big house, I dare you!!!!!!!!!!!!

[Heng]

I advise most of my foreign friends to make that first home a condo that they can own outright. Especially if they do not own any other property anywhere else in the world (which I also advise is a good move before they start to buy real estate here).

[pkrv]

I advise most of my foreign friends to make that first home a condo that they can own outright. Especially if they do not own any other property anywhere else in the world (which I also advise is a good move before they start to buy real estate here).

Heng - Admit it you are a Philosopher!

[Heng]

I do like grapes and bathrobes.