Buying A Leasehold Condo

[qbkh]

I plan to buy a leasehold condo.

- What should I pay attention to when signing the agreements? any difference from freehold condo?

- Should I also obtain a proof from bank for my money being transferred from overseas, so that in future if I sell this condo I can remit my money out of thailand, or buy other freehold condo?

- How much is a resale leasehold condo usually cheaper than a resale freehold condo with same quality in same district?

Many thanks.

[hhgz]

"What should I pay attention to when signing the agreements?"

You're signing legal documents, so it behooves you to pay attention.

"any difference from freehold condo?"

Assuming you know the difference between "leasehold" and "freehold", no.

"Should I also obtain a proof from bank for my money being transferred from overseas, so that in future if I sell this condo I can remit my money out of thailand, or buy other freehold condo?"

Yes, whether you buy a leasehold or freehold condo. It does not make any difference.

"How much is a resale leasehold condo usually cheaper than a resale freehold condo with same quality in same district?"

You started your post that you're ready to buy a leasehold condo, and then you ask a question that's the crux between the difference between leasehold and freehold condos. It seems as though that you are not ready to buy anything. You should check with a large real estate organization (for example, CBRE, or Property Plus) and ask that question.

[malcolminthemiddle]

49% of the majority of condos in Thailand are available to foreigners with freehold title.

Why buy leasehold?

[trogers]

Difference between leasehold and freehold?

At the end of a leasehold, you pack your bags and move out of the unit along with your loose furniture and equipment (air-con excluded). The condo and all fixed items belong to the land owner.

There is no end of ownership to freehold. It will survive you and you will it to some other people.

Rough calculation of % difference in value between leasehold and freehold.

Assume a monthly rental value (excluding furnishing) is X and the leasehold is valid for 28 years. Compound the total return for the 28 years to present value. Compare that with the market value of a similar freehold condo in the same location.

[qbkh]

Thanks for all your information. Is the resale market for leasehold property very inactive even in a normal economic situation?

[cqr]

I plan to buy a leasehold condo.

- What should I pay attention to when signing the agreements? any difference from freehold condo?

- Should I also obtain a proof from bank for my money being transferred from overseas, so that in future if I sell this condo I can remit my money out of thailand, or buy other freehold condo?

- How much is a resale leasehold condo usually cheaper than a resale freehold condo with same quality in same district?

Many thanks.

Very bad idea to buy Leasehold Condo, in a Condominium there can be up to 49% of foreigner ownership and most of the Condos is far below that, of cause there are some which has already reach the 49% but the best will then be to see if you could buy from one of the 49% foreigner, I’m sure there are some of these Condos for sale, not from the sales office but at the real estate agencies in your area. If no freehold is for sale now you will be better of rent until you find some freehold for sale.

I have seen some of the leasehold contracts and all say that then the contract expire you can choose to PAY again or leave, and other says you CAN’T sell nor transfer the lease, so with other words you WILL lose your money.

/Claus

[jbaldwin]

You should obtain proper legal advice.

However, the way you are using the words "leasehold" and "freehold" suggest you are British. Leasing a property in Thailand is not at all the same as buying a leasehold property in the UK. You are really only a long term renter and not an owner.

You do not need proof of transfer of money. This is only required when a foreigner buys a condo. In your case the legal owner will be a Thai and not you. (I assume that you are considering a property that cannot be legally owned by a foreigner and this is the reason that leasing has been suggested)

You talk about "resale"value. Remember you will not own any property only have a lease so strictly you have nothing to sell. You might get someone to pay you money to reassign the lease. However, in practice, I am not aware of any specific cases where this has actually happened.

[thaiwanderer]

Whilst not disagreeing with the general notion that a leasehold condo is of limited use and value I am aware of many assignments (though usually at a loss). For this reason and generally (transaction falls through etc.) I would have thought any farang should ensure they have the correct documentation to allow repatriation of the funds at a later date (and perhaps legal sponsors of the forum could anyhow confirm whether the appropriate documentation would be needed to affect the inward transmission of the funds in teh first place?).

The whole advantage of condos for farangs is freehold ownership - although it is still not entirely akin with freehold ownership they may ordinarliy be used to given the common element of condominiums. To take a leasehold condo defeats the purpose really. Unless the OP (assuming being fully aware of the options and consequences of the various real estate options) wants this particular unit in this development there is no real reason to lease.

As with all leases the fallibility of renewal promises should be highlighted (but that discussion has many threads here already).

For differences in the contracts its not so easy as just viewing this a lease - its a lease of a freehold condo and so this of course throws up the usual concerns of both freehold condo and lease generally as well as the unusual element of them meeting as here. Good legal advice is therefore (particularly) essential here. Merely two suggestions would be that the OP should have the right to vote in place of the owner and who is responsible for maintenance fees. There will be many more considerations.

As regards resale value? Firstly brand new leasehold condos are perhaps the least attractive property option a farang will typically encounter (even though they are typically not offered with a great discount over freehold), resales of such even more so. Its a heavily depreciating asset counting down from 30 years and there is so much better choice available to others you might hope to offload it to.

Again, WHY go this route in the first place? If it absoultely has to be this unit thats understandable but nonetheless would still politely suggest the OP reconsider.

[qbkh]

Thanks for all of your opinions and advice.

[Gary A]

Proper legal advice? Where do you find that? The crooked lawyers are still setting up companies that are and always were illegal as far as owning property. They'll write a contract to say whatever you want it to say legal or not. Anyone owning a company for the sole purpose of owning property is sitting on a time bomb. I have no idea why anyone would want to lease a condo. Keep looking until you can fine one in the 49 percent farang ownership category.

[philliphn]

Why would any one want to buy a leasehold condo?

[Crash999]

Why would any one want to buy a leasehold condo?

Price. As alluded to earlier, leasehold condos are cheaper than freehold due to the ownership being for a period of time not indefinitely. It comes down to a cost and utility calculation of purchasing leasehold vs freehold vs renting. It's possible to make money in the long term from a leasehold condo as one's repayments are fixed but rental income tends to go up over the long term.

[trogers]

Why would any one want to buy a leasehold condo?

Price. As alluded to earlier, leasehold condos are cheaper than freehold due to the ownership being for a period of time not indefinitely. It comes down to a cost and utility calculation of purchasing leasehold vs freehold vs renting. It's possible to make money in the long term from a leasehold condo as one's repayments are fixed but rental income tends to go up over the long term.

It is possible, but may not be probable, for rental income to increase beyond the mortgage interest over a 30-year lease. How much rent will increase over the years depends on 2 major events beyond the control of the leaseholder. First, will the building be upgraded progressively, and second, how many new projects will be raised in that locality to affect supply and demand for rental space.