simon43 Posted January 3, 2009 Share Posted January 3, 2009 I have been offered a lifetime lease (usufruct) on 1 rai of building land (Chanote) where I can build a private house for myself. The contract would allow me to pay a monthly rental for the land, with no upfront deposit required. The land has already been filled, has government road access, electricity and phone cables on that road, and has the likelyhood of a decent well-water supply. Now, what would be a realistic monthly rental to pay for this land? It is located in Amphur Thalang, just off the Tonsai road that goes to the national park, near to Thalang town. It's a very rural and quiet area, but within 5 minute's drive of Thalang. The landowner is suggesting 20,000 baht per month, plus 5% increase each year. I am thinking more on the lines of 10,000 baht per month, based upon it's rural location and distance from the beach etc. Does anyone have experience or knowledge of land prices in that area? It might help me to reach a realistic value for the monthly rental. Thanks Simon Link to comment Share on other sites More sharing options...
pothai Posted January 3, 2009 Share Posted January 3, 2009 Sure you could BUY a plot of land with the help of a mortgage/loan of less than 20,000 a month and have something to show for it. How old are you?, 20,000 compounded with 5% increase could be very very expensive. 20,000 x 12 = 240,000 x 25 years = 6,000,000 without the 5% increase....I would say about 4,000 a month.... Link to comment Share on other sites More sharing options...
Kimera Posted January 3, 2009 Share Posted January 3, 2009 I have been offered a lifetime lease (usufruct) on 1 rai of building land (Chanote) where I can build a private house for myself. The contract would allow me to pay a monthly rental for the land, with no upfront deposit required. The land has already been filled, has government road access, electricity and phone cables on that road, and has the likelyhood of a decent well-water supply.Now, what would be a realistic monthly rental to pay for this land? It is located in Amphur Thalang, just off the Tonsai road that goes to the national park, near to Thalang town. It's a very rural and quiet area, but within 5 minute's drive of Thalang. The landowner is suggesting 20,000 baht per month, plus 5% increase each year. I am thinking more on the lines of 10,000 baht per month, based upon it's rural location and distance from the beach etc. Does anyone have experience or knowledge of land prices in that area? It might help me to reach a realistic value for the monthly rental. Thanks Simon I have a relation in that area, there is land for sale 1 to 1.5m per rai, but of course if you cannot own the land, then leasing is the only option, not sure of your situation, ie do you have Thai. wife, can you buy in safety? if you can then buy in wife's name and pay the bank Link to comment Share on other sites More sharing options...
Riley'sLife Posted January 3, 2009 Share Posted January 3, 2009 The conventional valuation method for such a rental would be to ascertain the open market value of the land and multiply that value by 5% to determine the current annual market rental. Thus, reversing the above calculation, in the example you give (i.e. paying 240,000Baht in year one) this would theoretically suggest a current market value of the land at 4,800,000 Baht. (240,000Baht x 20 Year’s Purchase- i.e. a 5% yield.) Does that sound like the prevailing market value for land in that area Simon? Sounds way too high to me. I wouldn’t be happy with a 5% annual rental increase in the current economic climate. I would also want to negotiate for certain agreed specified leaseholder’s improvements to be reflected in the annual rental. Hope that helps! Link to comment Share on other sites More sharing options...
LivinLOS Posted January 4, 2009 Share Posted January 4, 2009 Land value in current climate.. 1m - 2m ?? Maybe just because its been levelled and ready for building at the upper end. That could be massively effected by road frontage and location, but really hard to tell. Your suggestion sounds VERY expensive to me.. Especially for Talang area where 20k would probably get rental alone without building the owner a house to profit from after your done. Link to comment Share on other sites More sharing options...
simon43 Posted January 4, 2009 Author Share Posted January 4, 2009 Hi LivinLOS - yes you have a point! Maybe I should just rent an existing house in Thalang (I know houseinphuket dot com has many cheap and new houses...) I need to ensure that I do not get carried away with the romantic idea of living in a Thai teak house But living in a concrete block, boring bungalow sounds soooo unappealling.... Simon Link to comment Share on other sites More sharing options...
greenwater Posted January 4, 2009 Share Posted January 4, 2009 (edited) It is a real fraud..... It's so simple: 5% increase every year= 7.931.000 baht in 20 years and a phenomenal 15.930.000 baht in 30 years....... of course also 10.000 baht/months is a fraud= 3.965.000 baht in 20 years and 7.931.000 baht in 30 years.... Edited January 4, 2009 by greenwater Link to comment Share on other sites More sharing options...
simon43 Posted January 4, 2009 Author Share Posted January 4, 2009 I should add that the monthly rental is capped when it reaches a TBA amount - so as to avoid the runaway scenario that Greenwater mentions! Simon Link to comment Share on other sites More sharing options...
.png.3b3332cc2256ad0edbc2fe9404feeef0.png)
Recommended Posts
Create an account or sign in to comment
You need to be a member in order to leave a comment
Create an account
Sign up for a new account in our community. It's easy!
Register a new accountSign in
Already have an account? Sign in here.
Sign In Now