Why Shouldn't I Buy R/e Right Now?

[steveromagnino]

Steveromagnino,

Rather than replying in detail to your (good) post, this is what I mean:

The units unsold in this particular project are still at about 40% (see them in green in the pic, their own screen at their sales office), available from the developer, at the prices 4 years old.

The developer rushed it in, the condos are finished now instead of February 2009. Obviously, the developer wanted to freeze their losses (or prevent further erosion of their profits). Certainly, they must have done some corner cutting.

Not that this development is anything I would recommend, I just wanted to say - there could be places now, completed or near completion, struggling to sell like this one.

This particular development seems like it must have something unappealing about it with such poor sale figures.

There is still plenty of demand for decent location perceived good value stuff (e.g. the Ideo at Lard Prao Soi 17 I think it is sold out in less than 2 weeks, the one across the road in Soi 18? I think it is sold out in 2 days!) but this project clearly is one of the ones adding to the supply.

And yes, totally agree, very unlikely any buyers in that building will see much capital appreciation!

[pkrv]

Someone posted about death of his father and a property left behind. That story will become more and more common - poor Isaan girls, married to oldies who inevitably pass away, left in 12 mil baht condos at Thong Lor where the levies could run 10K baht per month.

They will sell it for a song or just abandon and destroy any trace they have ever had anything to do with it and run away.

Rather a sad epitaph for such Farangs. I doubt such people would provided for the kids either. We see the same shit here in the UK - The good news is that in Thailand they may only be able to rent, full stop (but always some exceptions, sad gits).

[THAIPHUKET]

Am I wrongfully worried of being overcharged on general condo expenses the way inflation is going?

Is there any way to truly control such cost?

What is a reasonable expense ratio for a very good condo with all farang pleasing facilities?

( Not the super class )

[glyph]

"Am I wrongfully worried of being overcharged on general condo expenses the way inflation is going?"

Yes, you are worrying needlessly.

"Is there any way to truly control such cost?"

Of course there is, and that's the responsibility of the condo board.

"What is a reasonable expense ratio for a very good condo with all farang pleasing facilities?"

What do you mean by "expense ratio"? Since a ratio is something relating to something else, what are the 2 somethings you're referring to? If you check with condo developments, you see a monthly condo maintenance fee of 30-50THB/sqm.

[Naam]

"Am I wrongfully worried of being overcharged on general condo expenses the way inflation is going?"

Yes, you are worrying needlessly.

"Is there any way to truly control such cost?"

Of course there is, and that's the responsibility of the condo board.

"What is a reasonable expense ratio for a very good condo with all farang pleasing facilities?"

What do you mean by "expense ratio"? Since a ratio is something relating to something else, what are the 2 somethings you're referring to? If you check with condo developments, you see a monthly condo maintenance fee of 30-50THB/sqm.

which even by low cost thai standards is not enough to provide proper basic maintenance. those who live in older condos know what i am talking about. therefore i say "go illegal, go house and be your own master instead being dependent on a (usually) freaking inefficient condo board!"

[think_too_mut]

Stickman, who comes to this board to get his inspirations, has writen a column about buying anything of real estate in Thailand.

While I agree with him, mostly, he has no idea of trashing the money to make your Thai wife feel secure. If you crap out, what did she get for being with you?

She could be taken to shitholes (as Stick's home place probably is) or that + estate projects ravaged by drugs and crime.

[Scott123]

I bought my condo about five years ago. My friends told me I was paying too much and would never get my money back. I bought the place because that is where I wanted to live and I liked it. I had no intention of selling it and considered the place as my security blanket. I no longer live there and a friend of mine has leased it. I have been offered a VERY nice profit but it is still my security blanket. Whether the value had gone up or down, it makes no difference to me.

Right....congrat on your purchase 5 YEARS AGO.

But the question is: will you buy a property NOW. I don't think you can be so sure now.

[BEENTHEREDONETHAT]

"Am I wrongfully worried of being overcharged on general condo expenses the way inflation is going?"

Yes, you are worrying needlessly.

"Is there any way to truly control such cost?"

Of course there is, and that's the responsibility of the condo board.

"What is a reasonable expense ratio for a very good condo with all farang pleasing facilities?"

What do you mean by "expense ratio"? Since a ratio is something relating to something else, what are the 2 somethings you're referring to? If you check with condo developments, you see a monthly condo maintenance fee of 30-50THB/sqm.

which even by low cost thai standards is not enough to provide proper basic maintenance. those who live in older condos know what i am talking about. therefore i say "go illegal, go house and be your own master instead being dependent on a (usually) freaking inefficient condo board!"

While for an example on the good side. I bought a 10 year old condo a year ago, the maint fee is 21 Baht m2. There are a total of 38 units, they have just finished retiling part of the pool and are in the process of painting the outside of the building and common areas. It is about half done and should be finished in another 6 weeks. It is in the process to replace the filters in the pool and refresh the landscaping next.

There is 13,000,000 left in the maint fund after the painting and pool are complete and paid for.It has all the normal ammenities, fitness room, handball court, billard room (with full size table), conference room and each condo has a 3m x 3m storage (drivers room). The staff have all been here for 10 years so know the building very well. The guards are here 24/7 catching up on their sleep mostly.

The condo is on the beach in Cha Am and a great place to live.

[bkkjames]

I just wonder what the mainetence fee situation is at those buildings that have been purchased by locals as investments (cause it seems nobody lives there).

[dotcom]

20 baht a meter per month.

Edited September 5, 2008 by dotcom

[glyph]

"While for an example on the good side."

Same here. When I bought 4 years ago, the fee was 31THB/sqm, and now it's 32THB/sqm, and the building has about 16 million THB in the fund. The building is 10 years old, and it's in great condition.

[Gary A]

I bought my condo about five years ago. My friends told me I was paying too much and would never get my money back. I bought the place because that is where I wanted to live and I liked it. I had no intention of selling it and considered the place as my security blanket. I no longer live there and a friend of mine has leased it. I have been offered a VERY nice profit but it is still my security blanket. Whether the value had gone up or down, it makes no difference to me.

Right....congrat on your purchase 5 YEARS AGO.

But the question is: will you buy a property NOW. I don't think you can be so sure now.

I would buy a unit now. I rented before I bought and resented having the landlord looking over my shoulder all the time. I couldn't even hang a clock in the kitchen because it would need a small nail hole put in the wall.

I consider rent to be the biggest variable as far as living in Thailand. The unit maintenance is ten baht per square meter, so my sixty square meter unit is 600 baht per month. The maintenance fund is VERY healthy and if you go to the annual meeting, they give you 2,000 baht back. The electricity is billed direct from the electric company so there are no ridiculous fees added to the bill by a greedy landlord.

That said, NO way would I pay a crazy price like 120,000 baht per square meter. It's true that the condos that can be owned freehold have increased greatly in price but who knows what the future will bring. If you are not speculating, it really shouldn't matter what the future will bring.

[zorro1]

I bought my condo about five years ago. My friends told me I was paying too much and would never get my money back. I bought the place because that is where I wanted to live and I liked it. I had no intention of selling it and considered the place as my security blanket. I no longer live there and a friend of mine has leased it. I have been offered a VERY nice profit but it is still my security blanket. Whether the value had gone up or down, it makes no difference to me.

Right....congrat on your purchase 5 YEARS AGO.

But the question is: will you buy a property NOW. I don't think you can be so sure now.

I would buy a unit now. I rented before I bought and resented having the landlord looking over my shoulder all the time. I couldn't even hang a clock in the kitchen because it would need a small nail hole put in the wall.

I consider rent to be the biggest variable as far as living in Thailand. The unit maintenance is ten baht per square meter, so my sixty square meter unit is 600 baht per month. The maintenance fund is VERY healthy and if you go to the annual meeting, they give you 2,000 baht back. The electricity is billed direct from the electric company so there are no ridiculous fees added to the bill by a greedy landlord. I dont understand why people would pay rent

That said, NO way would I pay a crazy price like 120,000 baht per square meter. It's true that the condos that can be owned freehold have increased greatly in price but who knows what the future will bring. If you are not speculating, it really shouldn't matter what the future will bring.

one of the reasons I bought. A very expensive hole in the wall I have but I simply can not rent. I am my own master its just the way it is. I payed around half of what yopu quoted for 75sqm new in central suk 2 mins from nana bts. Why people continue to rent whils property keeps going UP is beyond me. I understand if your a guru on the stockmarket but most of us are not! what a waste to have cash sitting in a bank account at 7% trying to keep up with inflation and no chance of capitol gains AND losing say 20000-30000 bht/month on top

Edited September 7, 2008 by zorro1

[PattayaParent]

If you check with condo developments, you see a monthly condo maintenance fee of 30-50THB/sqm[/b].

which even by low cost thai standards is not enough to provide proper basic maintenance. those who live in older condos know what i am talking about. therefore i say "go illegal, go house and be your own master instead being dependent on a (usually) freaking inefficient condo board!"

But if you buy a house on a development (as opposed to buying your own land an building a house) you STILL have to pay monthly maintenance fees to the developer.

[PattayaParent]

I just wonder what the mainetence fee situation is at those buildings that have been purchased by locals as investments (cause it seems nobody lives there).

If the maintenance fees are not paid the condo management has the right to charge interest monthly on the unpaid amount.

The owner needs a 'free of debt' in order to sell the condo and this will not be given until all arrears are paid, including interest.

Additionally (and this may not be according to the Law but is certainly part of the condo rules in my building) the condo management can cut the services to the unit if the maintenance fees remain unpaid, so the owner cannot even rent the place out until the fees are paid.

What happens in the case where the developer has not sold all the units is probably are more interesting question? The developer is obliged to pay maintenance on the unsold units, but does he?

[LennyW]

If you check with condo developments, you see a monthly condo maintenance fee of 30-50THB/sqm[/b].

which even by low cost thai standards is not enough to provide proper basic maintenance. those who live in older condos know what i am talking about. therefore i say "go illegal, go house and be your own master instead being dependent on a (usually) freaking inefficient condo board!"

But if you buy a house on a development (as opposed to buying your own land an building a house) you STILL have to pay monthly maintenance fees to the developer.

Not all developers charge a fee, in order to charge a fee you must be providing a service of some sort!

[zorro1]

I just wonder what the mainetence fee situation is at those buildings that have been purchased by locals as investments (cause it seems nobody lives there).

If the maintenance fees are not paid the condo management has the right to charge interest monthly on the unpaid amount.

The owner needs a 'free of debt' in order to sell the condo and this will not be given until all arrears are paid, including interest.

Additionally (and this may not be according to the Law but is certainly part of the condo rules in my building) the condo management can cut the services to the unit if the maintenance fees remain unpaid, so the owner cannot even rent the place out until the fees are paid.

What happens in the case where the developer has not sold all the units is probably are more interesting question? The developer is obliged to pay maintenance on the unsold units, but does he?

I to am interested in this. Does anyone have a case example?

[Naam]

If you check with condo developments, you see a monthly condo maintenance fee of 30-50THB/sqm[/b].

which even by low cost thai standards is not enough to provide proper basic maintenance. those who live in older condos know what i am talking about. therefore i say "go illegal, go house and be your own master instead being dependent on a (usually) freaking inefficient condo board!"

But if you buy a house on a development (as opposed to buying your own land an building a house) you STILL have to pay monthly maintenance fees to the developer.

Not all developers charge a fee, in order to charge a fee you must be providing a service of some sort!

i am happily paying my fees because the services i get in return are well worth the fees.