Buy To Let

[makescents]

Unbelievable, why would you sell a property in London to buy in a third world country. Currencies fluctuate, however over the long term they even out.

You are clueless. The UKs balance sheet looks more like a banana republic every passing day.

Yes sorry I am clueless, Thailand is really looking like a bed of roses at the moment, compared to the UK.

balance sheet wise ? Nope.

So what you are saying is markets fluctuate?

We're talking real estate and some areas of the UK have bargain properties that can be bought well below previous record prices.

Rents are also very stable in the UK, unlike Thailand were it seems they are falling.

[sokal]

Yes sorry I am clueless, Thailand is really looking like a bed of roses at the moment, compared to the UK.

balance sheet wise ? Nope.

So what you are saying is markets fluctuate?

We're talking real estate and some areas of the UK have bargain properties that can be bought well below previous record prices.

Rents are also very stable in the UK, unlike Thailand were it seems they are falling.

If the FASB rules where not changed then all of the big UK banks would be broke. Prices might be down in the UK but they are clearly not down enough. Wait till interest rates go up in the UK. What do you think will happen to prices then ? And if interest rates stay low, have a look at Japan. Either scenario, prices will be lower in the UK 5 years from now.

[Zstarx]

Yes sorry I am clueless, Thailand is really looking like a bed of roses at the moment, compared to the UK.

balance sheet wise ? Nope.

So what you are saying is markets fluctuate?

We're talking real estate and some areas of the UK have bargain properties that can be bought well below previous record prices.

Rents are also very stable in the UK, unlike Thailand were it seems they are falling.

If the FASB rules where not changed then all of the big UK banks would be broke. Prices might be down in the UK but they are clearly not down enough. Wait till interest rates go up in the UK. What do you think will happen to prices then ? And if interest rates stay low, have a look at Japan. Either scenario, prices will be lower in the UK 5 years from now.

That's an interesting observation, just as we EXIT the greatest recession since 1929 you predict house prices will fall further. I'm rapidly coming to the conclusion you haven't a clue what you are writing

[sokal]

Yes sorry I am clueless, Thailand is really looking like a bed of roses at the moment, compared to the UK.

balance sheet wise ? Nope.

So what you are saying is markets fluctuate?

We're talking real estate and some areas of the UK have bargain properties that can be bought well below previous record prices.

Rents are also very stable in the UK, unlike Thailand were it seems they are falling.

If the FASB rules where not changed then all of the big UK banks would be broke. Prices might be down in the UK but they are clearly not down enough. Wait till interest rates go up in the UK. What do you think will happen to prices then ? And if interest rates stay low, have a look at Japan. Either scenario, prices will be lower in the UK 5 years from now.

That's an interesting observation, just as we EXIT the greatest recession since 1929 you predict house prices will fall further. I'm rapidly coming to the conclusion you haven't a clue what you are writing

Haha, you actually think we are exiting a recession. You have allot to learn. Recessions happen when credit contracts,0% interest rates and QE are credit expansion. We have had no recession yet.

[makescents]

Haha, you actually think we are exiting a recession. You have allot to learn. Recessions happen when credit contracts,0% interest rates and QE are credit expansion. We have had no recession yet.

I don't agree that we are not in a recession yet. If we have negative growth then that's a recession.

But let's say that we aren't in recession and the 'real thing' is coming soon. Where would you put your money? Gold, bonds, stay liquid?

This silly system inherintly does the same thing every few decades, it bubbles and then bursts because it's flawed. Only when people realise that this stupid paper isn't worth anything* are we going to have to move to a different system which, hopefully, doesn't exploit labour for profit.

*that or when China's domestic market is large enough to sustain it's own growth and it recalls America's/Europe's debt.

[Zstarx]

Yes sorry I am clueless, Thailand is really looking like a bed of roses at the moment, compared to the UK.

balance sheet wise ? Nope.

So what you are saying is markets fluctuate?

We're talking real estate and some areas of the UK have bargain properties that can be bought well below previous record prices.

Rents are also very stable in the UK, unlike Thailand were it seems they are falling.

If the FASB rules where not changed then all of the big UK banks would be broke. Prices might be down in the UK but they are clearly not down enough. Wait till interest rates go up in the UK. What do you think will happen to prices then ? And if interest rates stay low, have a look at Japan. Either scenario, prices will be lower in the UK 5 years from now.

That's an interesting observation, just as we EXIT the greatest recession since 1929 you predict house prices will fall further. I'm rapidly coming to the conclusion you haven't a clue what you are writing

Haha, you actually think we are exiting a recession. You have allot to learn. Recessions happen when credit contracts,0% interest rates and QE are credit expansion. We have had no recession yet.

Oh dear, not sure what you've been smoking these past 18 months.. or maybe you live in China?

[sokal]

Haha, you actually think we are exiting a recession. You have allot to learn. Recessions happen when credit contracts,0% interest rates and QE are credit expansion. We have had no recession yet.

I don't agree that we are not in a recession yet. If we have negative growth then that's a recession.

But let's say that we aren't in recession and the 'real thing' is coming soon. Where would you put your money? Gold, bonds, stay liquid?

This silly system inherintly does the same thing every few decades, it bubbles and then bursts because it's flawed. Only when people realise that this stupid paper isn't worth anything* are we going to have to move to a different system which, hopefully, doesn't exploit labour for profit.

*that or when China's domestic market is large enough to sustain it's own growth and it recalls America's/Europe's debt.

Thats a Keynes definition that I don't subscribe to. We basically hit a debt ceiling that resulted in a fall in GDP.

I am split 3 ways, Canadian cash, gold and gold mining stocks.

[Zstarx]

Haha, you actually think we are exiting a recession. You have allot to learn. Recessions happen when credit contracts,0% interest rates and QE are credit expansion. We have had no recession yet.

I don't agree that we are not in a recession yet. If we have negative growth then that's a recession.

But let's say that we aren't in recession and the 'real thing' is coming soon. Where would you put your money? Gold, bonds, stay liquid?

This silly system inherintly does the same thing every few decades, it bubbles and then bursts because it's flawed. Only when people realise that this stupid paper isn't worth anything* are we going to have to move to a different system which, hopefully, doesn't exploit labour for profit.

*that or when China's domestic market is large enough to sustain it's own growth and it recalls America's/Europe's debt.

Thats a Keynes definition that I don't subscribe to. We basically hit a debt ceiling that resulted in a fall in GDP.

I am split 3 ways, Canadian cash, gold and gold mining stocks.

Yes, looking at your posts I'd say you're split 3 ways, with you head not necessary on your neck, looks like you're well versed in the benefits of diversification as well.

[sokal]

Haha, you actually think we are exiting a recession. You have allot to learn. Recessions happen when credit contracts,0% interest rates and QE are credit expansion. We have had no recession yet.

I don't agree that we are not in a recession yet. If we have negative growth then that's a recession.

But let's say that we aren't in recession and the 'real thing' is coming soon. Where would you put your money? Gold, bonds, stay liquid?

This silly system inherintly does the same thing every few decades, it bubbles and then bursts because it's flawed. Only when people realise that this stupid paper isn't worth anything* are we going to have to move to a different system which, hopefully, doesn't exploit labour for profit.

*that or when China's domestic market is large enough to sustain it's own growth and it recalls America's/Europe's debt.

Thats a Keynes definition that I don't subscribe to. We basically hit a debt ceiling that resulted in a fall in GDP.

I am split 3 ways, Canadian cash, gold and gold mining stocks.

Yes, looking at your posts I'd say you're split 3 ways, with you head not necessary on your neck, looks like you're well versed in the benefits of diversification as well.

Diversification is for pussies.

[Benjie]

I wonder if people would seriously consider taking investment advice from people who can't work out 10% of 39 million.

[makescents]

I wonder if people would seriously consider taking investment advice from people who can't work out 10% of 39 million.

Well I definitely wouldn't invest in gold when it's above $1,100 an ounce.

[Zstarx]

I wonder if people would seriously consider taking investment advice from people who can't work out 10% of 39 million.

Yes well

I am actually a Financial Planner in Australia, been doing it since 1992.

[sokal]

I wonder if people would seriously consider taking investment advice from people who can't work out 10% of 39 million.

Well I definitely wouldn't invest in gold when it's above $1,100 an ounce.

haha, people said the same thing at $700. You don't understand gold.

[Zstarx]

I wonder if people would seriously consider taking investment advice from people who can't work out 10% of 39 million.

Well I definitely wouldn't invest in gold when it's above $1,100 an ounce.

haha, people said the same thing at $700. You don't understand gold.

One of the main reasons gold is expensive is because of the week US$

[merlion]

I wonder if people would seriously consider taking investment advice from people who can't work out 10% of 39 million.

Well I definitely wouldn't invest in gold when it's above $1,100 an ounce.

haha, people said the same thing at $700. You don't understand gold.

One of the main reasons gold is expensive is because of the week US$

Is it a good time to invest in the Chinese Yuan? Heard there is tremendous upside...

[london]

Thanks for the thread.

Interesting, I have been off the site for around a year or so, and yet the same questions and opinions still remain.

Frankly, I have two properties in Bangkok. One I rent and one I live in.

I sold the third last year as I feel that there may be some less than comfortable times ahead in the land of smiles.

That said, I had a 50%+ profit on my original investment and the unit had been rented for most of the last few years.

For some, it wasn't an outstanding return, but for me, I'm happy with a nett 6% capital gain per year + rental at around 7% nett.

Should anyone sell all their holdings in their home countries and invest totally in a foreign country where they are not familiar with the legal or economic history ? I think not. But, IF you have any intention of living in Thailand (or any place else for that matter) just do your research and then when you feel comfortable, do it !!

Its not rocket science.

Its either a place to live or to rent out.

If the figures make sense, why not?

If they don't, well, then the answer is "don't" !

Whether there is a right time or a wrong time to invest or buy is purely from your own perspective. Many have bought when the market was supposed to have been at its most fragile and have done well. Others have bought when the market was booming...and they too have fared well. (also, some have lost badly buying in both markets!!) Its up to YOU to decide what risk profile you are prepared to accept. Mind you, IF you are going to live here full time and you HAVEN'T lived here before, then definitely rent for a few months.

Take your time.

Also, from my experience, even if the market collapsed, and I am not expecting that, Thai owners wont sell at a discount. It just doesn't happen.

Also, was interested to hear the comments re Thai equities. Yes, they have recently been quite good to hold.......but I have sold down 90% since last year. Its my decision.

So do your homework. If it works out (and I hope it does for you) or if it doesn't, you'll only have yourself to congratulate...or blame.

Good luck !

[jay1980]

Thanks for the info, do you mind if I ask where in BKK, and what type of condo (low end studio/mid range one or two bed/high end penthouse)?

I would be very happy with a fairly stable 7% net return on rent.

cheers

[london]

Thanks for the info, do you mind if I ask where in BKK, and what type of condo (low end studio/mid range one or two bed/high end penthouse)?

I would be very happy with a fairly stable 7% net return on rent.

cheers

Dear Jay 1980

All my condos are in the prime area of the City. Sukhumvit, near Emporium.

The rental ones were all 1 bedroom, around 70sqm and are selling now for around 5.2 - 5.5 mil.

You'll achieve a "fairly stable 7%" + gross....not necessarily nett.....but I have found that within a year or so, the rentals have increased and you will then start to see a 7% nett.

I also know too that a couple of people here have low end condos that reap them in excess of 8-9% !!! BUT, YOU have to be comfortable with the risks associated with low-end rentals.

I hope this helps.

Good luck.

[torrenova]

You do not say how much your better flat is worth ? You could sell that one and keep the rental property ?

If you sold up then you would get rid of the commission and tax liability. However, you may be able to get rid of the tax liability even if you do not sell when you live overseas. You would benefit from income in THB and remove your FX risk but your income could not be counted for visa purposes unless you paid tax on it. If you are over 50 you could just keep 800k in an account. If you invest 10m then you qualify for an investment visa. It used to be 3m but was withdrawn at that level some years ago.

The upside to having the properties in Thailand is ease of management but just how would you rent them ? Quasi agents want 1 month as commission but an advert in the Pattaya Mail will get rid of most good and fair priced properties. Can you set up your own websites ? Self promotion through internet boards is another tool. It all depends upon you as a person.

As for returns, the rental market is soft and getting the magic 1% per month is hard to achieve. if your 4.8m bought you 3 condo then thinking about a couple of places I know, you would be looking at 15k a month and perhaps a little less to get full occupancy. If you got all 3 rented, you would be collecting around 45k a month and let's annualise that at 10 months to bring 450k. Compared to £450 a month, perhaps annualised at £5000, then it would be a significant premium. If you had to reduce to 12k then you would still pull in £7500, again a 50% increase over the London flat.

Capital appreciation is likely to be much better in London and you could well suffer FX losses if the GBP moves up against the THB. However, if you never sell either, then the value does not matter.

However, I have another idea. Why not go into the guest house business ? You would only be looking for a ROI of 5% which is laughable and even an inexperienced operator should be able to get 25%. If that idea does not suit, then using one of the condos as a short term let could give a better return. If you are working on 12k for 10 months, then you are at 120k a year. If you could get Bt1000 a night and an average of Bt800 after longer term discounts, then you need 150 nights a year plus costs. At 2 weeks each, that is 10 customers a year. How practical that is will wholly depend upon your own marketing and advertising skills. There are various Pattaya based internet boards you could join.

If you keep the property in the UK, what impact does only receiving £5k a year have ? If it makes life unbearable then you need to make more money but if it does not matter, then you have no reason to sell up. My guess is that you want to move the assets to Pattaya but are scared. I would be somewhat but not if I needed the money.

A final idea might be to leverage the property and create a buy to let investment from one or both your UK properties.

[jay1980]

Firstly many thanks for taking the time to write the detailed reply.

Rather that quoting which could look messy I have used colours to separate your idea's and my responses.

You do not say how much your better flat is worth ? You could sell that one and keep the rental property ?

If you sold up then you would get rid of the commission and tax liability. However, you may be able to get rid of the tax liability even if you do not sell when you live overseas. You would benefit from income in THB and remove your FX risk but your income could not be counted for visa purposes unless you paid tax on it. If you are over 50 you could just keep 800k in an account. If you invest 10m then you qualify for an investment visa. It used to be 3m but was withdrawn at that level some years ago.

Hard to judge the exact market today after the uncertainty caused by the election but I would guess around £220K. You are correct that I would not be liable for capital gains tax on this property, however what is stopping me is that it would be a place I could live comfortably at any stage in my life, so if things did not work in Thailand I would have somewhere to come back to. I am aware of the investment visa but without selling this place I do not have the funds to qualify. I am 38 so a few years off a retirement visa. The main visa options at first would be 'O' to visit friends, or 'ED' as I would like to learn more Thai to live there.

The upside to having the properties in Thailand is ease of management but just how would you rent them ? Quasi agents want 1 month as commission but an advert in the Pattaya Mail will get rid of most good and fair priced properties. Can you set up your own websites ? Self promotion through internet boards is another tool. It all depends upon you as a person.

As for returns, the rental market is soft and getting the magic 1% per month is hard to achieve. if your 4.8m bought you 3 condo then thinking about a couple of places I know, you would be looking at 15k a month and perhaps a little less to get full occupancy. If you got all 3 rented, you would be collecting around 45k a month and let's annualise that at 10 months to bring 450k. Compared to £450 a month, perhaps annualised at £5000, then it would be a significant premium. If you had to reduce to 12k then you would still pull in £7500, again a 50% increase over the London flat.

I can self promote properties and do basic websites etc, (currently work in IT but totally different field.) I do agree properties will rent if priced right, but there does seem to be a lot of keenly priced properties on the market currently. Your figures for the 4.8M baht investment are attractive.

Capital appreciation is likely to be much better in London and you could well suffer FX losses if the GBP moves up against the THB. However, if you never sell either, then the value does not matter.

Agreed

However, I have another idea. Why not go into the guest house business ? You would only be looking for a ROI of 5% which is laughable and even an inexperienced operator should be able to get 25%. If that idea does not suit, then using one of the condos as a short term let could give a better return. If you are working on 12k for 10 months, then you are at 120k a year. If you could get Bt1000 a night and an average of Bt800 after longer term discounts, then you need 150 nights a year plus costs. At 2 weeks each, that is 10 customers a year. How practical that is will wholly depend upon your own marketing and advertising skills. There are various Pattaya based internet boards you could join.

I would not discount buying a guest house, but I think currently I am of funds to buy one freehold, also being a landed property I would not be allowed to own the Charnote It does make the investment feel slightly less secure. I would need a big enough one to justify employing 4 Thai people, however I could add value to help with this. The idea to rent condo's on a shorter term holiday let bases does also appeal, and I should be able to test the water soon with the condo I bought in 'Park Lane' Jomtien. It will be ready in December.

If you keep the property in the UK, what impact does only receiving £5k a year have ? If it makes life unbearable then you need to make more money but if it does not matter, then you have no reason to sell up. My guess is that you want to move the assets to Pattaya but are scared. I would be somewhat but not if I needed the money.

The combine rents of my 2 UK properties will give me about £1200 net per month. I feel on the current exchange rate I could have a pretty comfortable life on this (no rent to pay if I live in my Park Lane condo), what scares me more is what Sterling and Western currencies will be like in 5-10 years, so long term I would like at least part of my income to come from the local place I live.

I have lived in Thailand (mostly BKK) for 14 months after being made redundant in 2003, lived on a fairly tight budget and did a bit of English teaching, decided to come back to the UK before my IT skills where totally outdated. I have been working as a freelance contractor since, which gives me a good income, (bought a nice car etc) but got SO bored with life here and really want to go back to LOS. Because of this I have been saving and working hard and managed to pay off my original mortgage, buy the smaller buy to let and buy the condo in Jomtien.

I am currently working on a big government IT project on a 3 month rolling contract. I think this will keep me gainfully employed and saving money until later in the year. Since my original post I rented my small buy to let to a new tenant on a 6 month let.

My next move will be to come to Thailand in December to take over my condo stay there for a while, take some time for combined pleasure and research trips to other locations in Thailand and decide my next move. Once I have done this research I will revisit the idea to sell the small flat and deploying the finds to a Thai investment.

A final idea might be to leverage the property and create a buy to let investment from one or both your UK properties.

This is fundamentally an good suggestion, reason I have not thought seriously about this yet because I HATE being in debt however if after my research is seems like are really good option I would consider a mortgage of the small place of 60% of the value releasing £60K or just under 3M baht in the current market.

Thanks again for your input and also the other members who have also provided input.

[london]

Hi Jay 1980.

I just wanted to say that the info given by torrenova is absolutely invaluable.

Its people like torrenova who have the experience and who are prepared to share it, are the ones from whom you will gain the most meaningful and practical advice and opinions.

Good Luck.