Luxury Condo Pre-construction Phase

[Tiger7Moth]

I am thinking of investing in a condo. There is a large luxury conco project in the pre-construction phase in a prime location, Lang Suan, near Suan Lumpinee.

Although I conceptually understand due diligence, I don't know anything from a practical point of view.

Particularly with the baht falling and the current Thai economic difficulties, I am concerned that I could invest in a property that might never complete or might change to lesser quality as construction progresses.

What can I do to ensure my investment isn't lost? Or, is it simply not a good idea to invest in preconstruction at this time?

Thanks for any input.

[Nordlys]

I am thinking of investing in a condo.  There is a large luxury conco project in the pre-construction phase in a prime location, Lang Suan, near Suan Lumpinee. 

Although I conceptually understand due diligence, I don't know anything from a practical point of view.

Particularly with the baht falling and the current Thai economic difficulties, I am concerned that I could invest in a property that might never complete or might change to lesser quality as construction progresses.

What can I do to ensure my investment isn't lost?  Or, is it simply not a good idea to invest in preconstruction at this time?

Thanks for any input.

<{POST_SNAPBACK}>

Buy a 2nd hand condo.

[Dragonman]

I am thinking of investing in a condo.  There is a large luxury conco project in the pre-construction phase in a prime location, Lang Suan, near Suan Lumpinee. 

Although I conceptually understand due diligence, I don't know anything from a practical point of view.

Particularly with the baht falling and the current Thai economic difficulties, I am concerned that I could invest in a property that might never complete or might change to lesser quality as construction progresses.

What can I do to ensure my investment isn't lost?  Or, is it simply not a good idea to invest in preconstruction at this time?

Thanks for any input.

<{POST_SNAPBACK}>

You could employ a commercial accountant to investigate the track record of the company involved. Probably big bucks. Before you consider anything check what other projects they have undertaken, go and speak to people living there and see if they have had any problems. What sort of deposits are they looking for, the bigger the more suspicious, as any reputable company would cost in any financing charges. My experience is that companies in Thailand want the purchaser to give all the cash and take all the risks. Having worked in Property Development and Law in the UK for many years, I personally would not make a spec. purchase unless the deposit was minimal until completion.

[Tiger7Moth]

<{POST_SNAPBACK}>

Buy a 2nd hand condo.

<{POST_SNAPBACK}>

I don't presently have sufficient funds to buy 2nd hand in the location I am interested in. I will in 10 months when I am 59 1/2 years old and can withdraw from a US retirement fund without early withdrawal penalty.

So, I will have funds to pay for a condo completed 10 months from now. But, do not have sufficient funds now.

I could wait 10 months and then buy 2nd hand but would have to absorb increase in price that could occur in the interim.

[Tiger7Moth]

<{POST_SNAPBACK}>

You could employ a commercial accountant to investigate the track record of the company involved. Probably big bucks. Before you consider anything check what other projects they have undertaken, go and speak to people living there and see if they have had any problems. What sort of deposits are they looking for, the bigger the more suspicious, as any reputable company would cost in any financing charges. My experience is that companies in Thailand want the purchaser to give all the cash and take all the risks. Having worked in Property Development and Law in the UK for many years, I personally would not make a spec. purchase unless the deposit was minimal until completion.

<{POST_SNAPBACK}>

Please give me an idea of what you would consider reasonable/minimal as a deposit (5%, 10%, ???).

[corkscrew]

I am thinking of investing in a condo.  There is a large luxury conco project in the pre-construction phase in a prime location, Lang Suan, near Suan Lumpinee. 

Although I conceptually understand due diligence, I don't know anything from a practical point of view.

Particularly with the baht falling and the current Thai economic difficulties, I am concerned that I could invest in a property that might never complete or might change to lesser quality as construction progresses.

What can I do to ensure my investment isn't lost?  Or, is it simply not a good idea to invest in preconstruction at this time?

Thanks for any input.

<{POST_SNAPBACK}>

Buy in the very 'up market' range: +30 million baht.

[ProThaiExpat]

What is the advantage of buying off plans?

Condos in Thailand are no different than other parts of the world, to give them the benefit of the doubt. My opinion is there are far more "bad" condo buildings that in other countries.

The condo laws of Thailand are acknowledged "weak" and don't go far enough in protecting your investment.

Once a building has "matured" you are in a position to judge whethr it is a "good building" or not and once a building has "matured" you can determine the following very important issues you can't "off the plans":

1. Ratio of renters vs. owners in residence.

2. Who occupies the units on your floor and particularly next door.

3. Maintenance regime after the developer has turned over maintenance to the condo association or management company.

4. Were the "movie star or prestige" occupants "given" their condos to entice new buyers and then these "draws" sell leaving you without.

5. Are there speculators who have made a bad choice and fail to make their monthly maintenance payments so elevators are turned off, lights in hallways reduced and maintenace deferred.

and the list goes on!!!

Most expats agree that quality is the big problem to obtain in Thailand. As built condos reveal a great deal to the buyer that a plan cannot and all the uncertainties of construction are avoided. There are many that feel the baht is due to weaken more and there may be a weakening in the Bkk condo market as well. Time is on your hands and delay to buy in your building of choice once it completed would be the wiser course. Even buying an option to buy upon completion, while more costly, offers a great deal more safety on the above issues if you feel there will not be any units left once the building is completed.

Edited July 9, 2005 by ProThaiExpat

[Dragonman]

<{POST_SNAPBACK}>

You could employ a commercial accountant to investigate the track record of the company involved. Probably big bucks. Before you consider anything check what other projects they have undertaken, go and speak to people living there and see if they have had any problems. What sort of deposits are they looking for, the bigger the more suspicious, as any reputable company would cost in any financing charges. My experience is that companies in Thailand want the purchaser to give all the cash and take all the risks. Having worked in Property Development and Law in the UK for many years, I personally would not make a spec. purchase unless the deposit was minimal until completion.

<{POST_SNAPBACK}>

Please give me an idea of what you would consider reasonable/minimal as a deposit (5%, 10%, ???).

<{POST_SNAPBACK}>

I personally paid 5%, but not until I'd checked out the developers previous efforts!

Note ProThaiExpat's comments however.

[siribunga]

I think u should invest real estate in Hua Hia.

[Khun Larry]

Better to rent in Thailand. Rental rates are much less than purchase carrying costs. I recommend you do not put more than 10 - 15% of your net into BKK real-estate.

There will soon be a huge glut of units on the market. Prices will drop and the baht / $$ will go up duai.

Sit tight. You will save 25%