Buying A Great Apartment But In A 20Yr Old Building

[sidjameson]

Lovely building, great location. Fantastic decor. 70m2 4.6million bht. The thing that puts me off is the building age. I mean how long can even a well maintained building go on for? I am only 43 so i hope to be living in it for at least 35 years.

And in 35 years time will it be worth anything at all? I will probably be potless by then and I would hope that I could get a little bit back to at least pay for a ticket to the UK where I would throw myself at the mercy of the state.

[trogers]

great location

What is the price of undeveloped land in this great location? Should the whole building tumble down tomorrow, the land it sat on will still have a market price. What is the condo unit's share?

[oldmajor]

I must admit his is a worry for me as well. I'm just not used to bricks and mortar (or similar) actually losing value as time progresses.

[trogers]

I must admit his is a worry for me as well. I'm just not used to bricks and mortar (or similar) actually losing value as time progresses.

The building will probably lose value as time progresses, but land value increases over time. That is why location is a prime importance when buying real estate.

The keyword is redevelopment when talking about decades.

[PennyFarthing123]

As a foreigner buying into a condo, do we share in the ownership of the land or just our individual unit? Since we share in the cost of maintenance of communal property I would like to think we also share in the the ownership.

[trogers]

As a foreigner buying into a condo, do we share in the ownership of the land or just our individual unit? Since we share in the cost of maintenance of communal property I would like to think we also share in the the ownership.

Yes. The Condo Acts makes it possible for foreigners to share ownership of the land, limited to a collective 49% total.

[london]

1) is the building well maintained ?

2) is the management of the building competent ?

3) is there enough money in their accounts to pay for upkeep ?

4) are the staff high quality ?

IF you answer in the affirmative, AND the location is good, frankly, a 20 yo structure that is well designed, well built and is maintained will last.

[Jingthing]

I don't agree that all Thai condos are 30 year tear downs as has been mentioned on another thread. Concrete buildings for example can last 100 years and there are such existing buildings in Bangkok, not that you would want to live in one. In any case, what exactly happens to the owners of a tear down condo? Especially assuming the location and land is valuable, what kind of compensation could such an owner generally expect in such a scenario, would a payout be reliable (or likely to be stolen by corruption), and how many years would it take to get paid?

Edited October 27, 2010 by Jingthing

[Spoonman]

If the land the building is on is not freehold I would expect there to be issues on a grander scale once 30yrs is up and and nothing do with the building itself.

[trogers]

I don't agree that all Thai condos are 30 year tear downs as has been mentioned on another thread. Concrete buildings for example can last 100 years and there are such existing buildings in Bangkok, not that you would want to live in one. In any case, what exactly happens to the owners of a tear down condo? Especially assuming the location and land is valuable, what kind of compensation could such an owner generally expect in such a scenario, would a payout be reliable (or likely to be stolen by corruption), and how many years would it take to get paid?

A well constructed concrete structure can last beyond 100 years, but architectural elements and M&E services cannot. Thus, the life of a building is usually limited to its economic life, usually 50-60 years. Then redevelopment will kick in, and in developed cities, accelerated by changing zoning laws.

Redevelopment can only occur by land acquisition, either by a private developer buying out the unit owners, or by govt acquisition as in Singapore. Till only in the last few years, HK's law was that a developer needed to buy out 100% of the unit owners. Now both HK and Singapore has changed the limit to 80%.

[thaiwanderer]

I must admit his is a worry for me as well. I'm just not used to bricks and mortar (or similar) actually losing value as time progresses.

The building will probably lose value as time progresses, but land value increases over time. That is why location is a prime importance when buying real estate.

The keyword is redevelopment when talking about decades.

but he/she's not buying the land now, rather a developed unit

even in decades may well give no increase in real terms if then reverting to a share in a plot

Edited October 27, 2010 by thaiwanderer

[trogers]

I must admit his is a worry for me as well. I'm just not used to bricks and mortar (or similar) actually losing value as time progresses.

The building will probably lose value as time progresses, but land value increases over time. That is why location is a prime importance when buying real estate.

The keyword is redevelopment when talking about decades.

but he/she's not buying the land now, rather a developed unit

even in decades may well give no increase in real terms if then reverting to a share in a plot.

That will depend much on the location of the chosen old condo project, and its present density (affecting the unit's share of the land).

I bought a 121 sqm unit in Sukhumvit 24 in a 12-storey building sitting on 2 rai. Land prices at this location is presently over Bt600k/wah2. The building is approaching 30 years old and the unit's share of land is almost 1%. And new developments along the soi are 30+ storeys buildings. What will be the redevelopment potential two decades in the future?

[thaiwanderer]

I must admit his is a worry for me as well. I'm just not used to bricks and mortar (or similar) actually losing value as time progresses.

The building will probably lose value as time progresses, but land value increases over time. That is why location is a prime importance when buying real estate.

The keyword is redevelopment when talking about decades.

but he/she's not buying the land now, rather a developed unit

even in decades may well give no increase in real terms if then reverting to a share in a plot.

That will depend much on the location of the chosen old condo project, and its present density (affecting the unit's share of the land).

I bought a 121 sqm unit in Sukhumvit 24 in a 12-storey building sitting on 2 rai. Land prices at this location is presently over Bt600k/wah2. The building is approaching 30 years old and the unit's share of land is almost 1%. And new developments along the soi are 30+ storeys buildings. What will be the redevelopment potential two decades in the future?

potential maybe but need to get there first - increasing maintenance fees and less desirable place to live and rent possibly as it gets older

liability should it fall down

you can't force a sale rather than a rebuild etc etc

even then, growth of course all depends on how much you paid for the original unit

[ThaiBob]

OP, for your situation I would ask is the condo free-hold or lease-hold? (You could have less than 10 years remaining on the lease.)

[trogers]

The keyword is redevelopment when talking about decades.

That will depend much on the location of the chosen old condo project, and its present density (affecting the unit's share of the land).

I bought a 121 sqm unit in Sukhumvit 24 in a 12-storey building sitting on 2 rai. Land prices at this location is presently over Bt600k/wah2. The building is approaching 30 years old and the unit's share of land is almost 1%. And new developments along the soi are 30+ storeys buildings. What will be the redevelopment potential two decades in the future?

potential maybe but need to get there first - increasing maintenance fees and less desirable place to live and rent possibly as it gets older

liability should it fall down

you can't force a sale rather than a rebuild etc etc

even then, growth of course all depends on how much you paid for the original unit

When we are talking about decades, majority of the original owners (who are the ones with emotional ties to the property) would have passed the unit on to heirs, thus, less resistance to selling it for redevelopment if the price offer is attractive.

For info, 3/4 of the price I paid for my unit is equal to my share of land value.

Edited October 29, 2010 by trogers