Is Buying Property In Bangkok A Good Investment?

[allenlowe]

Dear All,

Very interesting thread. I guess all of you have extensive experience in real estate investment although you guys have really different opinions. For me, I have almost no property investment experience at all. The only one condo I brought at my home town was 15 years ago and still keeping it. That's all.

However, I think I have to invest in Bangkok Property Market for the following reasons.

1. I am working in Thai now and likely to work here for a while.

2. I have no clue on equity at all. I can buy some mutual fund and let it run for at most a few percent a year.

3. Not many other investment opportunities in Thailand and therefore I am looking at the most traditional one - property at the moment.

FYI, I am a farang without a Thai wife and therefore the only thing I can buy is Condo. I will keep in mind all the suggestions such as rental yield and mortgages. Today I will contact Bangkok Bank and update you guys later. If I got any questions, I will post here and seek for your professional advice.

Cheers

[bilags]

I wish. First of all, its a family business, I am but a small part of the equation. Most of the "units" were apartments in either buildings between 60 and 100 units or complexes. We only had about 150 actual homes but "living units" does sound so much more impressive. Having 15 apartment complexes just doesnt have the same weight. I am sorry to report that honestly, when most of the houses were picked up, they were probably in the 110 to 120 times rent category, most acquired between 1970 and 1990. We are now strictly into commercial property and that has been sick sick sick. Buildings around 50,000 square feet, light industrial. We are running about 70% occupancy which keeps the lights on. Having property means having assets, not cash, which is why it can be such a bad investment, it is illiquid and hard to carry when times get bad.

As an aside, it took us around four hard years to liquidate the residential stuff and build the commercial buildings. Those were heady days though, every property we put on the market would have bidders and it would sell in days. Almost all of them ninja loans which just made us that more committed to getting out of the market.

Having said all that, I have made an offer on property in Thailand that is 90 times rent. About 60 low income units, it has been a steady return for years. Now here is the interesting part. I found an active real estate investor here to teach me the rules of the game in Thailand. He pays, are you ready, no more than 100 times rent. Its pretty interesting, if a property is taking in 50,000 baht a month, he will go into the bank that holds the NPL with 5 million baht in bags and cases. Usually, the bank wants something insane like 180 million baht or some such lunacy. He puts two or three million baht in cash on table and they have coffee and talk about the weather. The bank comes back with 90 million and they have more coffee and another million in cash goes on the table. As they get more friendly, he keeps dropping stacks on the massive pile on the table until the big boss asks for the paperwork. They consummate there immediately. He has been doing this for years and years, and he insists the key absolutely is cash that you can lay on the table. Without that, everything else is a time waster. He stops piling on at 100 times rent and gets about one out of ten properties he goes after. So thats the deal. We are going to the bank with bags of cash and going to have a shot at this property. I will let you know how it works out. Amazing Thailand.

The investor, Thai or Falang? i am woundering on how 2 own it, trough a company?

[christcourt]

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.

Have to agree with "razz's" and "sammigual's post. I built a cheap place "up country" on wife's plot over 4 years ago I'm still there and don't intend to buy a condo[i'd like too] until the GBP exchange rate has changed for the better. I still have a mortgage in the UK and rent out at twice the mortgage payments which covers my insurances too. Buying in the UK is good at the moment as interest just around 1%. I see that the recent UK house price trend has risen by 0.5% in the last 2 months bucking the "downward" price slope in other previous months. So good time to Buy in the UK would be around the end of the Year.

Prices in Thailand I think for the low end market are the same for whatever House or Condo. It's the Upper end market that see's a fall in Pricing.

At the end of the day should something happen and I have to leave the house myself and wife are in now, Well as above it's a divorce settlement I'm will to accept and still have all my investments in the UK intacted.

[gorber]

......Farangs tend to buy new condos (which is all you are allowed to buy by law anyway).

Is this true? So you aren't even allowed to own a condo that you bought, second hand, that was originally in the 49% of allowed foreign ownership?

It sounds like foreigners do buy them from threads on here. Are they circumventing the law, as with land purchases?

[quiksilva]

No its not true you can buy any condo old or new, big or small, residential or commercial, so long as the money comes in from overseas and that your transaction will push the amount of foreign ownership of the project beyond 49%.

You described a case where a condo was originally purchased at a time when foreigners owned 49% or less of the project. It would not be possible to exceed that amount, but you could buy a second hand condo from a Thai if there is currently sufficient foreign ownership quota available in that building at the time of transfer.

Edited September 14, 2009 by quiksilva