Mortgage a condo

[kwiz117]

I have some questions related to Mortgage of Property in Thailand.

I am thinking to mortgage a Condo under my Name. I am still not married but working in Thailand. I heard that if the Condo is above the 4th Floor of the complex, then I could own the property. Is this correct?

My GF is Thai and have no concerns in transfering any money under her account as we are planning to get married in December.

Has any one succeeded in obtaining a Mortgage Loan from a Thai Bank?

I appreciate if anyone can reply or PM the details, with the Bank they obtained the facility.

Thank you

[TizMe]

Have you read Better rent than buy condominium in Thailand?

If so, I'm interested to know why you would be still interested in buying.

[kwiz117]

Read the article and thanks for the valuable source of information.

I agree with some points. But my line of thinking is little different.

1. Appreciation of Property Values. If the writter of that article purchased a Condo in 1997 [Where I have missed out], he will be even in a situation to sell it to me at a return of over 200%today. Think about the people kept money in Banks during the 1997, crisis. They had to suffer. It is true that Property Market went down during 1997. But all people who owned fully completed buildings before 1997 have gained alot after the crisis. All projects started in 1997 or were in "work in progress" condition when the 97 crisis started, suffered alot and still we can see the remains of those property half completed in Bangkok sky line.

2. In Finance, higher the liquidity ratio, higher the growth is but with a high risk factor.

This is same for individual investments in life. It depends on person to person. If a person want to maintain a low liquidity ratio then it is better to Rent the property and the Financial Risk factor will gets lower.

In my case, I prefer to live in a high liquidty ratio situation by taking moderate risk in life.

When it comes to property, risk is usually covered by the value of the Property. Therefore, it is possible to reduce the risk further.

3. Many other factors of owning your own Home. It will give you so much confidence and stability. You will always have a fall back option.

I am 28 Years and owning a house will also depend on what age you are. If the person is in 50's, may be the return for the Investment will not justify compared to the remaining life time of the person.

My only concern is, how to make the ownership legal in Thailand and obtain a mortgage loan to fund part of it.

[lopburi3]

Appreciation of Property Values. If the writter of that article purchased a Condo in 1997 [Where I have missed out], he will be even in a situation to sell it to me at a return of over 200%today. Think about the people kept money in Banks during the 1997, crisis. They had to suffer. It is true that Property Market went down during 1997. But all people who owned fully completed buildings before 1997 have gained a lot after the crisis.

Believe your math is way out of line.  Property values have not increased to any appreciable extent since prior to 1997 prices and there is almost no market for 6 year old condos.  Land has value, and believe this is what you are thinking about.  Condos are a party dress that can quickly become valueless if not worn by the right woman.  Few of the lady 'condos' here are going to look like much after a few years use.  And even fewer are going to be sold at a higher price.

Assume you are thinking of the loss one would have had in 1997 if funds held in baht in a Thai bank.  But most people would not have had that problem as funds come from overseas to buy condos here so they would have been much better off not owning property here.   As for gains from pre 1997 property there are none.  Market price is the same or lower in baht and the baht has lost value on the international market.  

You might find an exception and if you are a gambling man more power to you.  But it is a game that few will win.

[Vorranuch]

Better rent than buy is a general advice for farangs who may not know much about Thailand and may not stay there for the rest of their life. It is also a good advice for those who do not want to do the proper homework and invest time in trying to find a good opportunity.

Sure the market is difficult but in every market, as bad as it is, there are hidden gems and money to be made.

The real estate market in Thailand has a dramatically poor liquidity. Take the classifieds of a 1 year old newspaper and call, maybe 70% of the properties will still not be sold. Many reasons, one of them being the totally irrational asking price from some owners.

There is no liquidity in the market so not much of an average price of reference price. Therefore most people make their own valuation, usually baselless and crazy (this is Thailand !). Very common is to include in the selling price the bank interests they have paid to acquire the property.  

This said , with a little research, it is possible to buy at a very fair price (i.e a price at which you can resell easily) and to find properties with a good return if you buy as an investment.

You can also buy for the long term (20 years+), at the current level of prices you cannot go wrong.

The only real problems are the legal issues if you don't buy a condo but land or a house. In your financial calculation always take into account the worst case scenario: you can be kicked out of the land at the end of the lease. Still, if within the lease period you can get your money back, why not ?

[KenUdon]

The only real problems are the legal issues if you don't buy a condo but land or a house. In your financial calculation always take into account the worst case scenario: you can be kicked out of the land at the end of the lease. Still, if within the lease period you can get your money back, why not ?

One more possibility is that we are all kicked out of Thailand, and all our property rights taken away from us, which in the present climate is very very possible. Toxin is at this moment 'considering" the farang/condo situation. Watch this space!!

[Butterfly]

There is also a political risk. It's possible in the future that farangs will be banned from buying ALL kind of properties, even condos. You could be forced to resell your condo for very little money. Also the currency risk. If the Thai bath loses another 20%, where do you get your capital gain from your property ? gone.

Where did you get those numbers of 200% capital gain on properties in 1997 ? I am a little bit suspicious.

[Vorranuch]

The country risk is real but low enough IMO (and according the rating agencies Thailand is "investment grade").

I understand kwiz117 will be married soon to a Thai and he plans to stay so for a long time.  If foreigners cannot own condos anymore he just transfers it to his wife, to keep or to sell. For companies there are cheap political risk insurances covering expropriation. Could an individual buy one?

If the baht loses 20%, again it is not such a big problem because he lives in Thailand and/or don't think about getting USD back from his condo.    

As a pure investment from a foreigner's point of view it is probably not worthwhile. For someone married to a Thai and planning to live in Thailand it is not the same.

Is it the best risk/reward investment for your money ? Certainly not, but it is not so bad. And more importantly you have all the non-monetary benefits given by kwiz117.

P.S

This is granted you have a long lasting relationship with Thailand and your wife. Unfortunately "marriage risk" is far higher than country risk ! ::

[kwiz117]

Thanks for all valuable feedback.

One thing, I think I am wrong to say that property values went up by 200% after 1997.

Actually I wrote it not thinking only as an Investment. As one reply suggest, If I buy a Condo then I will not purchase it with the intention of only as an Investment. If I think of investing my money, I would rather select some other option or invest in another country.

If I remember correct before 1997, 1 USD = 12-15 THB. After 1997, it went upto 1USD = 30-40 THB.  I was doing my calculations in THB terms with the intention of living in Thailand. If an Expat purchased a property investing 1 Million BHT [approx 65,000 USD] before 1997, today to own a similar property, he will have to invest closer to 2.8 Million Bht. Which means, if you did this Investment before 1997, today if you disposed it for the same value you purchased it, you would have gained Over 100% for your Investment. This formula will not applicable anymore. But if you have any intention of converting THB to USD, then forget about it. It will be better to invest in UK than in Thailand.

But as one reply suggest, Condo?s may not gain any appreciation of value. But I do not think it will depreciate a lot too. Have to take the non-monetary gains also into the picture.

Reason is, when ever a new Condo put up, the prices of those units will be Higher and Higher not Lower and Lower. It is similar to the Vehicle Market. A Soluna purchased 5 Years back, still go at 350,000 Bht in the 2nd Hand Market due to the New model releasing at 550,000 Bht to the Market.

Obviously, location, condition of the Condo and Maintenance does matter to get a good price and to find a buyer easily.

This is what I have gathered so far by reading and doing some analysis.

Regarding the uncertainty of Marriage in Thailand, well I am not concerned much. I do believe it depend on both people and not only her. If I think in this line, I won?t be able to own a house even in my country. I read many write-ups in this forum highlighting Thai Girls. Still I could not read any email published by any Thai Girl, with her Bad experiences with Farang.

[Vorranuch]

Marriage risk was not directed at Thai-farang relationships in particular. If you look at the figures in most western countries the divorce rate is quite high, and rising.

This is something to consider when you are buying property/planning long term investments, whatever is your nationality.

People don't like to think about it and it is understandable.Still it is a parameter you have to account for.

[PK2]

If I remember correct before 1997, 1 USD = 12-15 THB.

Just to be pedantic here, the Thai baht has never appreciated much past 24THB/USD since 1984.

[singa-traz]

Apparently GlobalThai provides homeloan to non-thai:

- http://www.globalthai.com/faq_homeloans_en.asp

Get the application and let us know the conditions ...

[Butterfly]

Apparently GlobalThai provides homeloan to non-thai:

- http://www.globalthai.com/faq_homeloans_en.asp

Get the application and let us know the conditions ...

I bet you need land deeds from another Thai or a Thai "sponsor" to support the loan. Useless. Some expat banking could provide a better service with less trouble.

[Alberta]

Have you read Better rent than buy condominium in Thailand?

.

Notwithstanding some of the problems you describe I am buying a condo in Bangkok. I need a reputable property lawyer or some sort of Jurasic person experienced in handling condo purchases for foreigners. Can anyone recommend someone to me in Bangkok? Any idea of what they charge and what the tax on a condo purchase amounts to as a percentage of the purchase price. Thanks in advance.

[kwiz117]

1. Yes, I do understand the increase in the Rate of Divorce as mentioned in one reply. If this rate increase further, and if we think about this when buying property as a factor; then it is better to stay single forever and have the own property until die alone. Further, I suggest not to have Children once get married coz that will be a factor that could loose money at the time of a Divorce [perhaps more than the investment in property].  

2. The USD rate I have taken in one of above replies should be corrected as 1USD= 25THB. Sorry for the mistake. But that will not effect to the end result.

Does any one know any Bank that has granted Expat loans in Thailand for buying property?

[pnustedt]

Try: http://www.hsbc.co.th/th/personal/detault.htm

[lopburi3]

If I remember correct before 1997, 1 USD = 12-15 THB. After 1997, it went upto 1USD = 30-40 THB.  I was doing my calculations in THB terms with the intention of living in Thailand. If an Expat purchased a property investing 1 Million BHT [approx 65,000 USD]before 1997, today to own a similar property, he will have to invest closer to 2.8 Million Bht. Which means, if you did this Investment before 1997, today if you disposed it for the same value you purchased it, you would have gained Over 100% for your Investment.

In 1997 the exchange rate was 25=$ and today it is 41=$

But the big flaw is that it does not cost any more for the same 1m condo in baht today than it did in 1997.  You will not pay 2.8m for what you got for 1m.  Price has not increased.  And in the case of a used condo it probably could not be sold for 500k (ask the banks about that - they have huge numbers they would like to sell).

A condo here is not good value unless you intend to live in it yourself and are very lucky to get a place where units are not controlled forever by the builder/family for their use/profit.  This is not land.  It is a consumer item, much like a car, and value is unlikely to increase.  In other countries where owners have real control and understand the need for maintenance/improvements condos make more sense.  Here it is likely to be a downhill ride.