Is Buying Property In Bangkok A Good Investment?

[spurs]

Hey guys. I'm considering buying property out here in Thailand. BUt have no idea if it's a good investment.

What areas of bangkok will be good to buy property?

Is it easy to sell on?

Can you make money on it?

what about elsewhere in thai;and? Samui? kho Chang?

Please enlighten me. I live and work out here but have no clue about this stuff.

spurs

[lannarebirth]

If, as you say, you have " no clue", you are likely to lose money. Better to invest in something in which you DO know something about.

[PCA]

If, as you say, you have " no clue", you are likely to lose money. Better to invest in something in which you DO know something about.

was just about writing the very same. Touching real estate takes high skills and hard balls. No room for the clueless and no chance to get education here.

[mommysboy]

You need to narrow things down a bit.

Generally I'd say no it's not the same as in Farangland, as there are many factors which determine price.

But in any case, I think a slump is ahead.

[londonthai]

the best is to invest close to your place where you live - you won't have to pay 20% commision for the menagement of your condo somewhere in kho chang or samui. Look around for the boards outside the house and buy, if it's cheap. Some owners do have to sell fast before the bang repossesses the property.

renting out is not that easy, thais don't pay much and leave your house delapidated, ready for the general renovation. Foreigners are able to afford more. The best profit you will make renting out to short term tourists. However, the market is thinning now and moody, very much depending on the season. Winter time (november - february) is really a good time to make money, the rest of the time your property might be half emty.

[think_too_mut]

Hey guys. I'm considering buying property out here in Thailand. BUt have no idea if it's a good investment.

What areas of bangkok will be good to buy property?

Is it easy to sell on?

Can you make money on it?

what about elsewhere in thai;and? Samui? kho Chang?

Please enlighten me. I live and work out here but have no clue about this stuff.

spurs

Where were you 2 years ago when professional scammmers were "advising" people like you?

Now, you may hear cries of a handful of those who fell for their pitch (while the "profesionals" are already jailed, deported or roaming Romania).

They will tell you, with the confidence of a man walking through a forest alone at night and singing to repel fear, how well they did.

[zorro1]

Those who bought here are still doing okay compared to the rest. Those who bought in

AUSTRALIA

UK

USA

Are totally screwed! and have dropped up to 40% and the average around 30%. USA 70% plus.

Personally Im looking at buying in Oz again, terrific interest rates and desperate owners many now retrenched cant pay mortgage. If your buying with UK or OZ $$ dont even think about it with the bht where it is now

Edited March 1, 2009 by zorro1

[londonthai]

Those who bought here are still doing okay compared to the rest. Those who bought in

AUSTRALIA

UK

USA

Are totally screwed! and have dropped up to 40% and the average around 30%. USA 70% plus.

Personally Im looking at buying in Oz again, terrific interest rates and desperate owners many now retrenched cant pay mortgage. If your buying with UK or OZ $$ dont even think about it with the bht where it is now

the OP lives and works in thailand, so global perspective not that important

[zorro1]

Those who bought here are still doing okay compared to the rest. Those who bought in

AUSTRALIA

UK

USA

Are totally screwed! and have dropped up to 40% and the average around 30%. USA 70% plus.

Personally Im looking at buying in Oz again, terrific interest rates and desperate owners many now retrenched cant pay mortgage. If your buying with UK or OZ $ dont even think about it with the bht where it is now

the OP lives and works in thailand, so global perspective not that important

I live here to. would rent the oz property out. Just thinking outside the box lots of scenarios to consider but agree back to topic

[xbusman]

Those who bought here are still doing okay compared to the rest. Those who bought in

AUSTRALIA

UK

USA

Are totally screwed! and have dropped up to 40% and the average around 30%. USA 70% plus.

Personally Im looking at buying in Oz again, terrific interest rates and desperate owners many now retrenched cant pay mortgage. If your buying with UK or OZ $$ dont even think about it with the bht where it is now

Zorro, where do you come up with such complete and utter tripe?

Lets see if we can get through such a completely misleading posting.

First, as a general rule of thumb for real estate investing a good target is to buy properties that cost 100 times rent. That ratio can go up or down a bit depending on various extraneous factors but amateurs not familiar with math would do well to use it as a benchmark. That means, if a rental for a property is 4000 zimbabwe dollars, the purchase price should be close to 4 million zimbabwe. The rental is determined by what other similar properties are renting for and an average three month vacancy between renters. Additionally, you should be careful in investing in markets that exceed 3 to 5 times the average per capita income. Think about that for a moment, if you are dealing in average property you dont want it outside what the average person can afford, right? If average properties are selling outside that ratio then that means what, you got it, Mr Bubble.

Having said the above, there are still good markets in the US, in fact some exceptionally good markets. There are also some really really bad markets. Zorro is a little prone to hyperbole with the statement of real estate dropping 70% plus in the US. There are areas such as LA and Miami that have dropped 40% and in the end probably will need to drop 70% before the ratios come into line with reality (and they will drop). There are plenty of other places where real estate is holding steady and in some cases appreciating because the ratios work, the banks were not insane, and people still need to live. However, all over the world, no matter what the valuation real or imaginary, very little is selling at any price because the banks are holding credit. WHICH IS ANTHER REASON WHY you should only buy at 100 times rent. Real estate is illiquid and when times get bad, you need someone else to pay the mortgage. If you buy in a bubble and the flipping game stops, those that paid too much end up unable to pay for the property, not enough income from the rentals. The main reason though is ROI, return on investment. You only have so much to invest, for 99.9999 percent of us its a fixed size pool of money. Buying real estate at 100 times rent is a good return on your money compared to other investments. As with any investment, dont put your eggs all in one basket however.

The OP is obviously rather new to the board and probably Thailand as this subject is done to death by the radical fringes of both sides constantly. Briefly, real estate inside rational financial guidelines is one of the best investments a person can make. One of the simplest reasons being is that banks will fund us in our purchases and give us leverage to accumulate more wealth. Real property investment, and not just boiler room flippers, takes a lot of work and does a pretty good job of tying us close to a physical location unless we want to give away a large percentage of our profit to a management company that is often more trouble than renters can be.

Where you choose to make that investment is of utmost importance in protecting your interest. There are countries that maintain a fairly strong, impartial and clear rule of law, and then there are the other banana republics where the courts are a branch of the military and completely arbitrary and almost always against the investor. Some banana republics are obvious and in the news daily, Venezuela and Zimbabwe come to mind. Others not so easy to see but are truly banana kingdoms, Thailand and Mexico fit that nicely. I would have no hesitation in England or Ozzydom. Lately I am not sure where the US falls, glad I sold my properties there two years ago, idiots!

If you decide to invest in Thailand, you have absolutely no rights here and laws change at a whim, often several times a year. There is great money to made here, but you could lose it all to the general next door if he gets upset over your dogs barking. Never invest more here than you can walk away from in anything, anytime. Real estate or a sick buffalo, it can be whisked out of reach in the fall of a gavel.

So if you have money that you can throw away and not notice it missing, and if the financial ratios are right for safe rational investing, there is plenty of property in the third world that makes good sense and good returns. If you cant throw the money away then search out and buy suitable property in the first world, where I think there are some great deals right now. Dont forget, thats not just the US and EU, it also includes some places like Hong Kong, Singapore, Japan. Real estate is a great way to build real wealth if you do the math and stay away from the boiler room vultures that congregate around the dead or soon to be dead. When it comes to investing, do the math and evaluate the risks, write it down on paper so you dont forget, THEN go talk to the lying thieving salesmen and banks with your paper in hand.

[zorro1]

"Zorro is a little prone to hyperbole with the statement of real estate dropping 70% plus in the US. There are areas such as LA and Miami that have dropped 40% and in the end probably will need to drop 70% before the ratios come into line with reality (and they will drop)."

So you agree with my tripe A house recently sold on ebay for $1

Oz is down 30% I can assure you. The markets tell the truth both USA and oz property sectors smashed! however the OP rightly is asking about BKK and i did derail a little, its just that I think more upside buying O/S if you can and sell for capitol gains and rent it out in mean time. But I dont know where Op is from ,if he wants to invest or buy to live long time. A lot of options out there and I would consider every single one.

[OriginalPoster]

"Zorro is a little prone to hyperbole with the statement of real estate dropping 70% plus in the US. There are areas such as LA and Miami that have dropped 40% and in the end probably will need to drop 70% before the ratios come into line with reality (and they will drop)."

So you agree with my tripe A house recently sold on ebay for $1

Oz is down 30% I can assure you. The markets tell the truth both USA and oz property sectors smashed! however the OP rightly is asking about BKK and i did derail a little, its just that I think more upside buying O/S if you can and sell for capitol gains and rent it out in mean time. But I dont know where Op is from ,if he wants to invest or buy to live long time. A lot of options out there and I would consider every single one.

Yes, the US property market has been smashed. But overall it is not down anwhere near 70%.

[xbusman]

Hey guys. I'm considering buying property out here in Thailand. BUt have no idea if it's a good investment.

What areas of bangkok will be good to buy property?

Is it easy to sell on?

Can you make money on it?

what about elsewhere in thai;and? Samui? kho Chang?

Please enlighten me. I live and work out here but have no clue about this stuff.

spurs

Because we are wandering away from the OPs questions, I thought I would answer them directly with an opinion on each of the questions.

Is it a good investment - if it fits the math and your risk tolerance. See prior post.

What areas are good to buy property? - Anywhere that fits the math. Having said that, you will be hard pressed to find a property that sells for 100 time rent anywhere in Bangkok. Very little property is advertised at realistic values, doesnt mean they dont sell at realistic values, just not advertised. So I think they take a lot of time and effort to find.

Is it easy to sell on? In good times its very difficult, in bad times you can just about forget it. I think Asians are adverse to buying anything used, a cultural tendency that has to do with used things picking up karma from prior owners or perhaps just a face thing, in any event, they greatly prefer new. Used anything here is an albatross.

Can you make money on it? Well if it was 100 percent guaranteed you could go down the path the idiot banks have been on for the past five years. If you buy inside the numbers and keep it a reasonably long time you have a historically great chance of making a reasonable rate of return. No investment meets this criteria with certainty or it would not be called an investment, it would be called robbery. I have met people who could make money out of anything they touched, then there are those of us who buy high and sell low. You can make money in about everything if you are disciplined, know your market, do the math, control your risk, and get lucky.

Elsewhere, same same but different. You might have a harder time finding reasonable investments, those markets seem to be hyperinflated even more than BKK but I dont know, have not been down there and done the math. I know the vultures seem to congregate there so by nature I would stay away from those watering holes.

Regards your response Zorro, I saw that house that sold for a dollar and think the ratios were good, about fifty times monthly rent I would guess. It was a good investment. Remember I said that ratios have to be adjusted for some things? Property tax being one. I bet the tax on that house is running $5000 a year, so it might have only truly been worth about a buck. Your right about prices, they are going to fall hard if we are lucky. The only other answer is to deflate the money to worthless like Germany in the 30s so that the numbers on the banks books work again. We dont want to go down that path because historically it only ends in one place....

[Gary A]

It's a good investment only if you want to live there and the property is in the area where you want to be.

[spurs]

wow, THis is all excellent!

Thank you all very much for your replies especially you xbusman.

I'm from the UK by the way and live and work out here. I'm looking to buy property because I'm 30, have no pension and nothing saved for the future!! I have been told that investing in property is the best, safest bet for the long run. However judging by what's been written here I trust the uk would be a better to place to buy right now.

Love to comment about selling on out here being difficult. I was thinking the same.

thanks again guys.

If anyone wants to add anyhting please do. I really have zero experience in investing...pretty much anything!

i shall check back later.

Spurs

[spurs]

by the way is the 100 times srent thing a general rule in property? eg if i was to buy in the uk for 50,000 GBP i should rent out for like 500GBP a month?

spurs

[submaniac]

Those who bought here are still doing okay compared to the rest. Those who bought in

AUSTRALIA

UK

USA

Are totally screwed! and have dropped up to 40% and the average around 30%. USA 70% plus.

Personally Im looking at buying in Oz again, terrific interest rates and desperate owners many now retrenched cant pay mortgage. If your buying with UK or OZ $ dont even think about it with the bht where it is now

Yes, USA got dumped heavily, but the economic stimulus package is fixing things nicely. The house I bought for $305,000 USD is now appraising for $199,000. Under the new government regulations, you can modify the loan with the bank to its present value. The bank takes a loss and writes it down to present value. Bank then goes to the government and gets reimbursed for its loss.

[OriginalPoster]

Those who bought here are still doing okay compared to the rest. Those who bought in

AUSTRALIA

UK

USA

Are totally screwed! and have dropped up to 40% and the average around 30%. USA 70% plus.

Personally Im looking at buying in Oz again, terrific interest rates and desperate owners many now retrenched cant pay mortgage. If your buying with UK or OZ $ dont even think about it with the bht where it is now

Yes, USA got dumped heavily, but the economic stimulus package is fixing things nicely. The house I bought for $305,000 USD is now appraising for $199,000. Under the new government regulations, you can modify the loan with the bank to its present value. The bank takes a loss and writes it down to present value. Bank then goes to the government and gets reimbursed for its loss.

What's the net effect of that, do you get back the $106K that you lost? And what would have happened if you had paid cash for the house instead of taking out a mortgage, would the government then had given the money straight back to you instead of reimbursing a bank?

Edited March 1, 2009 by OriginalPoster

[londonthai]

I'm from the UK by the way and live and work out here.

"here" here means "thailand", as it's a thai visa board, and not "somewhere, somewhere, you know where I live".

the answer would greatly depend (as you see) from what "here"

[zorro1]

Those who bought here are still doing okay compared to the rest. Those who bought in

AUSTRALIA

UK

USA

Are totally screwed! and have dropped up to 40% and the average around 30%. USA 70% plus.

Personally Im looking at buying in Oz again, terrific interest rates and desperate owners many now retrenched cant pay mortgage. If your buying with UK or OZ $ dont even think about it with the bht where it is now

Yes, USA got dumped heavily, but the economic stimulus package is fixing things nicely. The house I bought for $305,000 USD is now appraising for $199,000. Under the new government regulations, you can modify the loan with the bank to its present value. The bank takes a loss and writes it down to present value. Bank then goes to the government and gets reimbursed for its loss.

What's the net effect of that, do you get back the $106K that you lost? And what would have happened if you had paid cash for the house instead of taking out a mortgage, would the government then had given the money straight back to you instead of reimbursing a bank?

Good Answer.

[zorro1]

wow, THis is all excellent!

Thank you all very much for your replies especially you xbusman.

I'm from the UK by the way and live and work out here. I'm looking to buy property because I'm 30, have no pension and nothing saved for the future!! I have been told that investing in property is the best, safest bet for the long run. However judging by what's been written here I trust the uk would be a better to place to buy right now.

Love to comment about selling on out here being difficult. I was thinking the same.

thanks again guys.

If anyone wants to add anyhting please do. I really have zero experience in investing...pretty much anything!

i shall check back later.

Spurs

Yep Uk already smashed and may get some more smashing this year. So why not grab some and pick up the profit on the upswing and then buy your property here.

[RAZZELL]

by the way is the 100 times srent thing a general rule in property? eg if i was to buy in the uk for 50,000 GBP i should rent out for like 500GBP a month?

spurs

Very few places in the UK where 100 times rent will work. Even 15 years ago.

I would advise against buying property in Thailand for a few reasons.

1) Ownership laws.

2) Visa regulations.

3) Political unrest.

4) Illiquid market.

5) Immature market.

If you want a property as a "safe investment" buy in the UK in a year or so. They've stopped start making more land

RAZZ

Edited March 1, 2009 by RAZZELL

[xbusman]

The 100 times rent thingy is a terribly quick and dirty way of doing the real math behind the financial investment. I always recommend that one do the math first, second and before buying. Liars figger but figgers dont lie.

Just for the sake of a quick and dirty.

100 times rent means that you get about a 1% ROI monthly which we can translate to a 12% yearly gross. Deduct vacancy, repairs, taxes and expenses that should leave about 6% yearly. Thats a good return on investment for safe stable assets. Hopefully the asset will also appreciate along with the rate of inflation and could under usual and beneficial circumstances be around 2% a year. So your return, with little risk and work, can be as high as 8%. In the wide range of investments available to money, from pork bellies to Madoff, the risk to return ratio is pretty good if times are relatively stable.

The underlying rationale is that you are looking at real rental rates for similar properties in similar locations. Thats not always easy to do, particularly here. One needs to be pretty savvy in the market to have a real understanding of what things will actually rent for with no more than about three months vacancy. When I hear the arguments for and against real estate here, no one knows the real numbers or if they know, they dont do the math. There are a few savvy investors here that know the story and guess what.... they aint about to hand us board posters years of hard work and insight into the market they look to score in every day.

So, the 100 times rent is pretty easy for us simpletons to get a handle on and evaluate our return on the investment. Outside this ratio and you have a high probability of investing in a bubble along with a bunch of other idiots who failed the percentages test. The other thing we found about 100 times rent is that when things go belly up, and eventually they always do, rental of 1% per month can potentially completely cover the mortgage if you stick with a 20% downstroke. Again, have to do the math but you dont want to owe the mortgage company every month after you give them the rent check like the morons in LA are just now finding out.

Regards the GBP question, the answer is this. If you go into a block of flats that are all pretty similar, and they are 80 or 90% occupied regularly, and they rent out normally for 500GBP monthly, you should really be looking for a property there selling in the 50,000 GBP range. If you find something lower, find out why, there is an extremely high probability something is wrong, perhaps flooding or near the dumpster or something. If its over 50,000 unless you can really justify getting additional rent, pass it. To invest wisely, you are going to have to work hard finding the right property at the right price. You might look for a year and find nothing, then three come in a week. Usually from divorce, death or some idiot on the wrong end of a bubble. No easy way to make real money, at least I have not found one yet. Your purchase price cannot dictate rentals, the market does that. Therefore, determine the rentals and stay inside the ratios or your will most probably come to regret it someday.

[think_too_mut]

Hey guys. I'm considering buying property out here in Thailand. BUt have no idea if it's a good investment.

What areas of bangkok will be good to buy property?

Is it easy to sell on?

Can you make money on it?

what about elsewhere in thai;and? Samui? kho Chang?

Please enlighten me. I live and work out here but have no clue about this stuff.

spurs

Where were you 2 years ago when professional scammmers were "advising" people like you?

Now, you may hear cries of a handful of those who fell for their pitch (while the "profesionals" are already jailed, deported or roaming Romania).

They will tell you, with the confidence of a man walking through a forest alone at night and singing to repel fear, how well they did.

I was wondering where those over-optimistic real estate agents went. Now we know:

Now 13 Aussies arrested in Dubai collapse

THREE property industry high-flyers, including the senior agent of a company part-owned by James Packer, are among 13 Australians under arrest in Dubai as its supposed property miracle has succumbed to the global financial crisis.

Full article

[sanmiguel]

by the way is the 100 times srent thing a general rule in property? eg if i was to buy in the uk for 50,000 GBP i should rent out for like 500GBP a month?

spurs

Very few places in the UK where 100 times rent will work. Even 15 years ago.

I would advise against buying property in Thailand for a few reasons.

1) Ownership laws.

2) Visa regulations.

3) Political unrest.

4) Illiquid market.

5) Immature market.

If you want a property as a "safe investment" buy in the UK in a year or so. They've stopped start making more land

RAZZ

READ RAZZ'S POST AND DO EXACTLY AS HE SAYS.

I used to own a business selling off plan property overseas, and i wouldnt touch any new build breeze blocks in the sky or any holiday homes unless they drop 60%, property prices are artificial everywhere in the world, it was a global boom paid for by our future taxes and will take a few years to hit bottom.

Go to a website called houseprices.co.uk type in your local postcode and see how much property has risen in the last 8 years.

I still think if you live out in the sticks and can build a property for a million on your wifes plot of land thats something worth throwing a Million baht at if you think youve got a good 5 years at least still in the relationship. it can be your future divorce settlement.

Edited March 1, 2009 by sanmiguel

[richm7]

Those who bought here are still doing okay compared to the rest. Those who bought in

AUSTRALIA

UK

USA

Are totally screwed! and have dropped up to 40% and the average around 30%. USA 70% plus.

Personally Im looking at buying in Oz again, terrific interest rates and desperate owners many now retrenched cant pay mortgage. If your buying with UK or OZ $ dont even think about it with the bht where it is now

Zorro, where do you come up with such complete and utter tripe?

Lets see if we can get through such a completely misleading posting.

First, as a general rule of thumb for real estate investing a good target is to buy properties that cost 100 times rent. That ratio can go up or down a bit depending on various extraneous factors but amateurs not familiar with math would do well to use it as a benchmark. That means, if a rental for a property is 4000 zimbabwe dollars, the purchase price should be close to 4 million zimbabwe. The rental is determined by what other similar properties are renting for and an average three month vacancy between renters. Additionally, you should be careful in investing in markets that exceed 3 to 5 times the average per capita income. Think about that for a moment, if you are dealing in average property you dont want it outside what the average person can afford, right? If average properties are selling outside that ratio then that means what, you got it, Mr Bubble.

Having said the above, there are still good markets in the US, in fact some exceptionally good markets. There are also some really really bad markets. Zorro is a little prone to hyperbole with the statement of real estate dropping 70% plus in the US. There are areas such as LA and Miami that have dropped 40% and in the end probably will need to drop 70% before the ratios come into line with reality (and they will drop). There are plenty of other places where real estate is holding steady and in some cases appreciating because the ratios work, the banks were not insane, and people still need to live. However, all over the world, no matter what the valuation real or imaginary, very little is selling at any price because the banks are holding credit. WHICH IS ANTHER REASON WHY you should only buy at 100 times rent. Real estate is illiquid and when times get bad, you need someone else to pay the mortgage. If you buy in a bubble and the flipping game stops, those that paid too much end up unable to pay for the property, not enough income from the rentals. The main reason though is ROI, return on investment. You only have so much to invest, for 99.9999 percent of us its a fixed size pool of money. Buying real estate at 100 times rent is a good return on your money compared to other investments. As with any investment, dont put your eggs all in one basket however.

The OP is obviously rather new to the board and probably Thailand as this subject is done to death by the radical fringes of both sides constantly. Briefly, real estate inside rational financial guidelines is one of the best investments a person can make. One of the simplest reasons being is that banks will fund us in our purchases and give us leverage to accumulate more wealth. Real property investment, and not just boiler room flippers, takes a lot of work and does a pretty good job of tying us close to a physical location unless we want to give away a large percentage of our profit to a management company that is often more trouble than renters can be.

Where you choose to make that investment is of utmost importance in protecting your interest. There are countries that maintain a fairly strong, impartial and clear rule of law, and then there are the other banana republics where the courts are a branch of the military and completely arbitrary and almost always against the investor. Some banana republics are obvious and in the news daily, Venezuela and Zimbabwe come to mind. Others not so easy to see but are truly banana kingdoms, Thailand and Mexico fit that nicely. I would have no hesitation in England or Ozzydom. Lately I am not sure where the US falls, glad I sold my properties there two years ago, idiots!

If you decide to invest in Thailand, you have absolutely no rights here and laws change at a whim, often several times a year. There is great money to made here, but you could lose it all to the general next door if he gets upset over your dogs barking. Never invest more here than you can walk away from in anything, anytime. Real estate or a sick buffalo, it can be whisked out of reach in the fall of a gavel.

So if you have money that you can throw away and not notice it missing, and if the financial ratios are right for safe rational investing, there is plenty of property in the third world that makes good sense and good returns. If you cant throw the money away then search out and buy suitable property in the first world, where I think there are some great deals right now. Dont forget, thats not just the US and EU, it also includes some places like Hong Kong, Singapore, Japan. Real estate is a great way to build real wealth if you do the math and stay away from the boiler room vultures that congregate around the dead or soon to be dead. When it comes to investing, do the math and evaluate the risks, write it down on paper so you dont forget, THEN go talk to the lying thieving salesmen and banks with your paper in hand.

xbusman, where do you come up with such utter tripe?

Let's take a look at your assertion. You reckon that a return of 1% per month on the value of a property is good. Good? It's <deleted>' remarkable. 12% per year? Dream on. That means that my ex's 350k house in England would rent at 3500 a month. I think not. Or, my $450k house in Texas at $4500. Or, my 10M baht condo in BKK at 100K. I <deleted>' wish. I flogged a house in California once for way over $700k and I can assure you that if I could have got $7000 a month for renting it I would never have sold it. PLEASE show me a market where you can get a 12% return. Not possible, unless your name is Peter Rachman (perhaps you need to look him up). My son rents in London now, and the total rent paid for a property worth 400K is 2000 quid a month. Or, 0.5%. He has done the same for years, in various properties, and the number has always been there or thereabouts. 0.5%. To my absolute knowledge for the past 5 years the number in BKK has also been 0.5% perhaps a little more, but nowhere near 1%. Look, a return of 6% on a capital investment that (in the long run) is increasing in value is bloody good. 12% is dreamland.

[xbusman]

Wow, a little prozac is in order I think.

Unfortunately, in some ways you are completely right. My experience comes from investing in the US over the past thirty years. During that time we bought around 12,000 living units from single houses to small apartment complexes. We also owned and managed a few building companies and still have two property management companies. We must have been a bit goofy in the face of your brilliance but somehow managed to get by.

About 2003 we decided that our old business plan, the old ratios, and the old school were just "complete nonsense" as you so eloquently point out. Since about 2000 it has been too much work to find property within the old guidelines. In fact, we opened our construction companies in the 90s as we were reduced to mass purchases from banks liquidated foreclosed properties. We would buy thirty homes in a portfolio, move 27 or 28 at cost to keep two that fit our investment guidelines. After the 90s, it was all pretty much a bubble and very few properties were bought. In 2004 we were so old fashioned and stupid that we completely liquidated our entire holdings, at that time around 1500 living units. Our current inventory of private residences is 14, and some of those have been owned by our family since the 50s.

So in todays real world, we are very very wrong in the face of all the brilliant strategic moves in the property market. We missed all the fun and would have been better off selling in June 2008, we just did not have the modern financial ability to make the numbers work for us. Instead, we have spent the past four years desperately scrambling around for some place to put that money to make it work. We just were not smart enough to play in the stock market or commodities, not big enough for Bernie Madoff to look us up for golf, and not brave enough to invest in the third world so it has become obvious that we just dont get this new world order. We parked our money in some really simple low returns and to date our outmoded and old fashioned idiocy has only protected our investment and kept it growing very slowly. We should be ashamed that we dont understand this new Harvard world order but it is what it is.

I dont think the math has changed all that much. No matter how I work the numbers I cant seem to make the new world order create a reasonable return on investing in property. The only way that seems to work is under the assumption that the capital value of the property will rise exponentially year on year. We have not found that to be the case anytime in the last four hundred years. Even if the property increases, this does not guarantee an increase in rents, in essence an increase in property value is nothing more than a blue sky increase in capital value without corresponding increase in ROI for the initial investment. So when the market turns the books become insolvent, as in the case of our brilliant investment banks.

Its a new world richm7, and you and your fellow investors have new and exciting ways of making huge profits in these ground breaking times. I am glad to be at the end of my career able to sit back and enjoy the show. I will refrain from posting further and head off to my room and sulk a bit.

best of luck

[IMA_FARANG]

Hey guys. I'm considering buying property out here in Thailand. BUt have no idea if it's a good investment.

What areas of bangkok will be good to buy property?

Is it easy to sell on?

Can you make money on it?

what about elsewhere in thai;and? Samui? kho Chang?

Please enlighten me. I live and work out here but have no clue about this stuff.

spurs

Are you crazy? Worldwide real-estate prices are going to drop as the properties are OVERVALUED by at least 20%. Thailand likes to believe that it is somehow immune from the pain of a crash.

They also believe in the tooth fairy, that their potential wife will naturally be a virgin ubtil she marries, and that they will live happily ever after like in the movies.

I'm sure if you are astute and careful...and don't believe anything you hear or personally see happen at least twice...you can sometimes make a bit of money buying and renting properties.

Otherwise, you can easily lose money big time.

Also remember as a foriegner, you can't own land, just lease it at best.

And I don't expect you can speak Thai (niether can I) well enough to be sure that you don't get lied to/cheated/scammed/or just plain don't understand some point that seems obvious to a native Thai speaking partner and end up losing money.

Just for one point...even if you find a good bargain, do you have the money to pay CASH. If not how do you expect to get a loan in Thiiland.?

[thaihome]

Those who bought here are still doing okay compared to the rest. Those who bought in

AUSTRALIA

UK

USA

Are totally screwed! and have dropped up to 40% and the average around 30%. USA 70% plus.

Personally Im looking at buying in Oz again, terrific interest rates and desperate owners many now retrenched cant pay mortgage. If your buying with UK or OZ $ dont even think about it with the bht where it is now

Yes, USA got dumped heavily, but the economic stimulus package is fixing things nicely. The house I bought for $305,000 USD is now appraising for $199,000. Under the new government regulations, you can modify the loan with the bank to its present value. The bank takes a loss and writes it down to present value. Bank then goes to the government and gets reimbursed for its loss.

Can you provide a link that substantiates your explanation of the homeowner bailout plan?

As far as I have read, pay downs on principal are limited to $1,000 a year for 5 years and only if the homeowner stays current on payments. There are incentives to reduce the borrower’s monthly mortgage payment to 38% of his or her income, “pay for success” incentives to mortgage providers for conforming loan modifications, and creation of an insurance fund up to $10 billion to discourage lenders from foreclosing on borrowers. But pay downs of principal is very limited.

I can’t imagine any program that would allow something like 30% principal pay downs as you suggest ever being passed.

TH

[think_too_mut]

The house I bought for $305,000 USD is now appraising for $199,000. Under the new government regulations, you can modify the loan with the bank to its present value. The bank takes a loss and writes it down to present value. Bank then goes to the government and gets reimbursed for its loss.

How nice.

Can you repeat the process when your house drops to 100K?

Then again when it drops to 50K?