Investing In Residential Real Estate In Thailand

[Royspurs]

Team Thailand,

I'm sure this Q has been answered many times, however, considering the current ecomonic climate the answers may be different.

I am considering investing in real estate in Thailand, I have a decent track record in Australia in this area, however, taxes (income & land) in Australia are making me consider Thailand as an option for my favourite form of investment.

So interested in your thoghts and experiences in regard to:

- Property in Bangkok (target expat community or professional Thai's etc)

- Rural cities (I will be living near Sukhon Nakon Issan) so opportunity for Uni students, hospital workers etc

- Capital grow opportunities

- rental return

- property management

- tax, if any

- market direction

- current value for money

- security of investment

- capitalimprovements

and anything else you may consider relevant.

Thanks in advance for your input

[oldgeezer]

Team Thailand,

I'm sure this Q has been answered many times, however, considering the current ecomonic climate the answers may be different.

I am considering investing in real estate in Thailand, I have a decent track record in Australia in this area, however, taxes (income & land) in Australia are making me consider Thailand as an option for my favourite form of investment.

So interested in your thoghts and experiences in regard to:

- Property in Bangkok (target expat community or professional Thai's etc)

- Rural cities (I will be living near Sukhon Nakon Issan) so opportunity for Uni students, hospital workers etc

- Capital grow opportunities

- rental return

- property management

- tax, if any

- market direction

- current value for money

- security of investment

- capitalimprovements

and anything else you may consider relevant.

Thanks in advance for your input

Are you aware you, as a foreigner, cannot own land in Thailand?

[Royspurs]

Team Thailand,

I'm sure this Q has been answered many times, however, considering the current ecomonic climate the answers may be different.

I am considering investing in real estate in Thailand, I have a decent track record in Australia in this area, however, taxes (income & land) in Australia are making me consider Thailand as an option for my favourite form of investment.

So interested in your thoghts and experiences in regard to:

- Property in Bangkok (target expat community or professional Thai's etc)

- Rural cities (I will be living near Sukhon Nakon Issan) so opportunity for Uni students, hospital workers etc

- Capital grow opportunities

- rental return

- property management

- tax, if any

- market direction

- current value for money

- security of investment

- capitalimprovements

and anything else you may consider relevant.

Thanks in advance for your input

Are you aware you, as a foreigner, cannot own land in Thailand?

Yes I am aware, however, I was considering apartments which if 51% Thai owned I can own myself

thanks

[trogers]

Yes I am aware, however, I was considering apartments which if 51% Thai owned I can own myself

Apartments and Condominiums have different meaning in Thailand.

An apartment building can have only one owner.

A condominium building can have multiple owners for its different units.

There is a lack of condominium projects in Issarn. Difficult to convince locals to buy and own the 51%.

[JohnM]

Hi Royspurs, are you a cash buyer or would you be looking for finance?

Edited November 6, 2009 by JohnM

[Royspurs]

Hi Royspurs, are you a cash buyer or would you be looking for finance?

expect it to be cash

[Bemused]

If you have plently of spare cash then give Thailand a punt. The rate of return (relatively high) is related to the risk.

The biggest risk isn't actually the legal stuff and losing your ownership, it is not making any money. Capital increases are only possible if you can actually re-sell the property. This can be tough. As an example let me tell you about two websites we did: one selling a bar in mid sized town in Japan, the other selling houses on a popular thai island. The site for the Thai property got 10 hits a day, the one for the bar in Japan got over 200. The bar sold, the Thai property venture went nowhere. The Thai property market is really small and sales take ages to happen.

The moral to this story: only buy something with really good commercial potential. Land/house in the middle of nowhere will make you nothing.

[Forkinhades]

Have rented my property out now for 5 years, yield is about 6%, and sterling is down around 20%, so I am getting an even better yield. Maybe not a good time to invest as the baht is still quite strong. I rent to the oil workers, there are many of them 1 month on 1 month off, I have kept the rent very reasonable, unlike some 'people' who think of a rent and will not budge, and the property stays empty for YEARS!

For me personally I am looking at 20 - 25 more years giving me a yield, so it is long term. I also calculate that after 8 years of rent, I will of had my investment back, and of course I still have the stock. I would rather have an income than Capital.

[Royspurs]

nobody out there had experience with an investment property in Bangkok??

[trogers]

the other selling houses on a popular thai island. The site for the Thai property got 10 hits a day, the one for the bar in Japan got over 200. The bar sold, the Thai property venture went nowhere. The Thai property market is really small and sales take ages to happen.

The moral to this story: only buy something with really good commercial potential. Land/house in the middle of nowhere will make you nothing.

Selling landed properties to foreigners?

If leasehold, not many super rich willing to pay for a place that is used a month in a year. If freehold, not many wants an illegal title...LOL

[PattayaParent]

Thailand is not the place to make a lot of money in property investment at the moment.

[Royspurs]

Thailand is not the place to make a lot of money in property investment at the moment.

not looking to make alot of money, but interested in the type of return and capital appreciation long/medium term, obviously knowbody knows, but opinions are good

Edited November 14, 2009 by Royspurs

[Bemused]

Outside of what is going on in Bangkok you aren't going to get reliable statistics because no-one is collecting them in a systematic way.

The Land Registry in thailand is done on paper, not electronically, and they can't easily produce statistics. The other good source of data in richer countries comes from mortgage lenders. In thailand there isn't much mortgage financing available and the statistics from the banks won't capture the reality.

Unfortunately, you are reliant on people telling you about their individual experiences. The lack of reliable information and statistics in Thailand is why forums like this are so popular.

[Royspurs]

Outside of what is going on in Bangkok you aren't going to get reliable statistics because no-one is collecting them in a systematic way.

The Land Registry in thailand is done on paper, not electronically, and they can't easily produce statistics. The other good source of data in richer countries comes from mortgage lenders. In thailand there isn't much mortgage financing available and the statistics from the banks won't capture the reality.

Unfortunately, you are reliant on people telling you about their individual experiences. The lack of reliable information and statistics in Thailand is why forums like this are so popular.

Hi Bemused,

thanks, your comments makes lots of sense.

[fivestar]

Thailand is not the place to make a lot of money in property investment at the moment.

Hi PattayaParent

You can be SOOOO negative sometimes!

I know of many people who have recently invested in real estate in Pattaya and are currently getting a great ROI.

Regards

Robert

[Royspurs]

Thailand is not the place to make a lot of money in property investment at the moment.

Hi PattayaParent

You can be SOOOO negative sometimes!

I know of many people who have recently invested in real estate in Pattaya and are currently getting a great ROI.

Regards

Robert

Hi fivestar,

what are the numbers you base your ROI statement on?

and what is the target market farang or thai?

thx

[fivestar]

Thailand is not the place to make a lot of money in property investment at the moment.

Hi PattayaParent

You can be SOOOO negative sometimes!

I know of many people who have recently invested in real estate in Pattaya and are currently getting a great ROI.

Regards

Robert

Hi fivestar,

what are the numbers you base your ROI statement on?

and what is the target market farang or thai?

thx

Hi Royspurs

One example: Based on spending close two 2M Baht including full furniture package on a 1-bedroom condo and achieving between 15,000 and 18,000 Baht per month gross rental.

Second example: Based on spending 3.45M Baht on a fully furnished 1-bedroom condo and renting out for minimum of 20,000 Baht per month gross rental

Target market is the ex-Pat.

Cynics will no doubt question these examples!

Buys are investing in such units as they give a better return than deposits at Barclays, RBS etc...

You can PM me for further details.

Regards

Robert

[fivestar]

Thailand is not the place to make a lot of money in property investment at the moment.

Hi PattayaParent

You can be SOOOO negative sometimes!

I know of many people who have recently invested in real estate in Pattaya and are currently getting a great ROI.

Regards

Robert

Hi fivestar,

what are the numbers you base your ROI statement on?

and what is the target market farang or thai?

thx

Correction to that 2nd example: 2.95M returning gross 20k per month...

[trogers]

Thailand is not the place to make a lot of money in property investment at the moment.

Hi PattayaParent

You can be SOOOO negative sometimes!

I know of many people who have recently invested in real estate in Pattaya and are currently getting a great ROI.

Regards

Robert

Hi fivestar,

what are the numbers you base your ROI statement on?

and what is the target market farang or thai?

thx

Hi Royspurs

One example: Based on spending close two 2M Baht including full furniture package on a 1-bedroom condo and achieving between 15,000 and 18,000 Baht per month gross rental.

Second example: Based on spending 3.45M Baht on a fully furnished 1-bedroom condo and renting out for minimum of 20,000 Baht per month gross rental

Target market is the ex-Pat.

Cynics will no doubt question these examples!

Buys are investing in such units as they give a better return than deposits at Barclays, RBS etc...

You can PM me for further details.

Regards

Robert

Rental rates are fine. But are lease annual? Or are they short term - 3 to 6 months?

[fivestar]

These are for 1 year rental contracts.

regards

Robert

[trogers]

These are for 1 year rental contracts.

regards

Robert

Great. What's the average occupany rate of a building in good and moderate location during peak and off peak periods? Over 85%?

[Stumbo]

Plenty rubbish buying property here claiming it is dangerous, presumably fearing the government will nationalize everything, even though there has never been a hint of this ever happening. Suspect most just don't have the money to do so, or just feel more secure in the home country despite the lower returns and higher taxes.

However with declining exchange rates many who decided to derive property income here are much better off than those bringing it in from overseas. That comment that property is not very liquid here is fair comment.

Be shrewd in where and what you buy. I get returns of about 11% on my condos in this depressed market. I am going to buy another house later and rent out the one I am in now, am expecting a return of about 7 - 10% on that one. This house is a city property and has also appreciated but won't be sold as in my child's name. By shrewd I see lots of houses for rent but mostly outside the city in the usual moobaan, so I buy city property as I believe easier to rent with less competition (this is in Chiang Mai so every city different).

I will then derive most of my required income locally. I have children here so they just get it all later. Some other assets I will keep at home country, again for the kids for later but in a different market. Also keeping some cash at home to buy into the stock market at bottom dollar after the real crash comes. Also for some gold if that major correction does come. So really trying to diversify, even though mainly in real estate now.

Make up your own mind but some commentators are saying that SE Asia is still a good buy for property as expect the west (US and Europe at any rate) to be bottomed out for years.

[AddictedToThai]

It is a good time to invest in Bangkok. Find re-sales in the projects near completion in districts like Sukhumvit, Sathorn, Chidlom, Silom. You can find very attractive deals as some thais affected by crisis and unable to pay the last installments before transferring title deed sell their properties at the prices well below market.

As an example you can buy 1 or 2-bedrooms in Aguston condominium in the center of Sukhumvit at 85,000 per sqm, while current developer's prices for the last few unsold units there approx 110,000-120,000 per sqm. Deals like this are popping here and there every week, but you have to be quick as they are selling out very well.

After buying the best strategy is rent it out for 2-3 years, and then re-sell. In 2-3 years the building (if it is from one of a few biggest thai developers) will still look fresh and attractive.

Another safe bet is to buy new condos with tenants already in place. You can have 6-7% of rental income plus capital appreciation. Good condos to look at are Address Chidlom, Aguston, Emporio Place, The Met, Athenee Residence, Siri. But dont buy from developer, look for much better offers on re-sale market.

There is no foreign quota issue in Bangkok as the market is mostly Thai. It is also less dependent of foreign investments than resort areas like Pattaya, therefore more stable, especially now.

[pkrv]

It is a good time to invest in Bangkok. Find re-sales in the projects near completion in districts like Sukhumvit, Sathorn, Chidlom, Silom. You can find very attractive deals as some thais affected by crisis and unable to pay the last installments before transferring title deed sell their properties at the prices well below market.

As an example you can buy 1 or 2-bedrooms in Aguston condominium in the center of Sukhumvit at 85,000 per sqm, while current developer's prices for the last few unsold units there approx 110,000-120,000 per sqm. Deals like this are popping here and there every week, but you have to be quick as they are selling out very well.

After buying the best strategy is rent it out for 2-3 years, and then re-sell. In 2-3 years the building (if it is from one of a few biggest thai developers) will still look fresh and attractive.

Another safe bet is to buy new condos with tenants already in place. You can have 6-7% of rental income plus capital appreciation. Good condos to look at are Address Chidlom, Aguston, Emporio Place, The Met, Athenee Residence, Siri. But dont buy from developer, look for much better offers on re-sale market.

There is no foreign quota issue in Bangkok as the market is mostly Thai. It is also less dependent of foreign investments than resort areas like Pattaya, therefore more stable, especially now.

An independent cross reference for Aguston condominium

http://www.skyscrapercity.com/showthread.php?t=392389

[Royspurs]

It is a good time to invest in Bangkok. Find re-sales in the projects near completion in districts like Sukhumvit, Sathorn, Chidlom, Silom. You can find very attractive deals as some thais affected by crisis and unable to pay the last installments before transferring title deed sell their properties at the prices well below market.

As an example you can buy 1 or 2-bedrooms in Aguston condominium in the center of Sukhumvit at 85,000 per sqm, while current developer's prices for the last few unsold units there approx 110,000-120,000 per sqm. Deals like this are popping here and there every week, but you have to be quick as they are selling out very well.

After buying the best strategy is rent it out for 2-3 years, and then re-sell. In 2-3 years the building (if it is from one of a few biggest thai developers) will still look fresh and attractive.

Another safe bet is to buy new condos with tenants already in place. You can have 6-7% of rental income plus capital appreciation. Good condos to look at are Address Chidlom, Aguston, Emporio Place, The Met, Athenee Residence, Siri. But dont buy from developer, look for much better offers on re-sale market.

There is no foreign quota issue in Bangkok as the market is mostly Thai. It is also less dependent of foreign investments than resort areas like Pattaya, therefore more stable, especially now.

Hi Addicted To Thai,

I like the idea of a Bkk apartment, couple of Qs in regard to your feedback:

- where do you find the re-sales?

- selling in 2-3 years sounds good in regard to property condition, but, dosnt buying & selling fees take all the posible appreciation (is there stamp duty in Thailand?) in such a short timeframe?

- do you manage the property yourself?

thanks again

[ThaiSunshine]

If you want a heavy return on your investment you should consider the new property hot spot in Thailand!

I am talking about the beachfront resort town of Khanom, located at the mainland opposite Koh Samui.

We have one Thai Bali style condo complex ready to move in this December.

Phase 2 of this condo complex will be ready to move in late 2010.

You can find more info about this project here:

Beachfront Condo

I've only got a few units in Phase 1 left.... and for Phase 2 you'll save a lot of money buying off plan.

[AddictedToThai]

I like the idea of a Bkk apartment, couple of Qs in regard to your feedback:

- where do you find the re-sales?

- selling in 2-3 years sounds good in regard to property condition, but, dosnt buying & selling fees take all the posible appreciation (is there stamp duty in Thailand?) in such a short timeframe?

- do you manage the property yourself?

thanks again

Prakard.com – it is mostly in Thai, but in Bangkok market you are going to buy from Thais in 90% cases. Use google translator for reading Thai ads. The are sections on various bangkok areas subdivided by sections on particular buildings.

Check out bangkok market report on raimonland.com website. The list of new projects with completion dates is useful.

Transaction fees are relatively low in thailand and will be covered by appreciation.

It is up to you to decide whether you will be managing your properties by yourself or use management services offered by various companies. It is not a big deal to manage 1-2 condos by yourself. But if you have 10 and up units with tenants it could easily become your full-time job.

[Royspurs]

If you want a heavy return on your investment you should consider the new property hot spot in Thailand!

I am talking about the beachfront resort town of Khanom, located at the mainland opposite Koh Samui.

We have one Thai Bali style condo complex ready to move in this December.

Phase 2 of this condo complex will be ready to move in late 2010.

You can find more info about this project here:

Beachfront Condo

I've only got a few units in Phase 1 left.... and for Phase 2 you'll save a lot of money buying off plan.

thanks but I'm not sure yours is the most objective advice on this forum

[Royspurs]

I like the idea of a Bkk apartment, couple of Qs in regard to your feedback:

- where do you find the re-sales?

- selling in 2-3 years sounds good in regard to property condition, but, dosnt buying & selling fees take all the posible appreciation (is there stamp duty in Thailand?) in such a short timeframe?

- do you manage the property yourself?

thanks again

Prakard.com – it is mostly in Thai, but in Bangkok market you are going to buy from Thais in 90% cases. Use google translator for reading Thai ads. The are sections on various bangkok areas subdivided by sections on particular buildings.

Check out bangkok market report on raimonland.com website. The list of new projects with completion dates is useful.

Transaction fees are relatively low in thailand and will be covered by appreciation.

It is up to you to decide whether you will be managing your properties by yourself or use management services offered by various companies. It is not a big deal to manage 1-2 condos by yourself. But if you have 10 and up units with tenants it could easily become your full-time job.

thanks ATT really appreciate it,

your advice obviously comes from good experience. I manage my properties in Oz and would do the same in LOS, Ive been checking out a few websites, however, I will not be in LOS until April 2010, so will probably make a move then.

Roy

[olsen]

thanks but I'm not sure yours is the most objective advice on this forum

Maybe not....as a broker.....but anyway, investing in these condoes has already proven a return on investment within 2 years!!

The first investors who bought off plan are now selling with 100% profit!

And most of these Phase 1 condos are already sold!

Where else in Thailand can you find this great ROI?

Good luck to your ventures ;-)

Edited November 22, 2009 by olsen