Why Buy A House In Pattaya

[jori]

All that needs to be done is build uncertainty into the situation and that’s a perfect formula for falling prices, there is plenty of that, but one thing is certain house prices in Thailand will continue to fall, no crystal ball needed there.

An avid reader of all realtors spin I take great delight in digesting all. One recent comment of merit from one realtor was the yield factor on house purchase and renting it, a bit of a deflection on ownership and living in it. Went something like “buy at X amount, rent at Y amount, over a given period of rising values there is your profit ,Z amount, not forgetting X may well be 100,Y maybe a figure that is unobtainable (which it will be) and Z will be zilch.

If your here for the long run OK no problem with values, but short time you’re in the start of serious losses, no good trying to deflect from that fact. Once your sell by date is up in Thailand it is good just to up and go, no use being anchored here by property. Feel a bit sorry for my long time TGF though, a paid for long stay with the folks down on the farm with a large bag of chicken feed following on will be a ‘bye darling memo which should suffice

One way out of it I suppose is to do an Al Qaeda on your property, one of those abandoned 10 million baht houses that want even more wasted money to be pumped into it for completion. Get a load of gas bottles, light a candle upstairs and on the way out open the gas bottles up, blow the bloody thing to smithereens, of course get some good house insurance before the act. It will be rebuilt for sure for 500 Baht and another 10 million price tag attached, no doubt

Edited November 4, 2010 by Rimmer
Inflammatory comments

[Tolley]

I am all for home ownership expecially where i come from in Austalia and have made a significant amount of money out of my own properties over the years.

But Australia is Australia and Thailand well is a third world country where the odds are stacked so far against you and the whole political system is unstable and you never know what is around the corner, and you can't really own land, and condos lose value quickly, and neighbours can be a nightmare, and it is hard to sell etc etc etc.

As stated before i would only buy to give my wife or partner the security of having their own place and basically write off ever getting anything back from the purchase of the property.

Otherwise rent rent rent.

[PattayaParent]

Your examples of buying real estate in the US are interesting, but not really relevant. Thailand real estate for foreigners has its own, unique issues and problems. US tax law is biased in favor of home ownership, especially when it is mortaged. But I doubt that your NY friend has no money for a condo in BKK because he rented in NY (most people in NY city are renters), and is probably a result of many broader financial decisions and spending behavior over a long period of time. I know many people in the US, mostly home owners (with substantial incomes and huge mortages) that have little to no net equity in their homes and live pretty much pay check to pay check (although they live very, very well). As you say, up to them....

But the problem here is that real estate of the kind purchased by foreigners here in Thailand is very illiquid. For every person that has or, as you speculate, will double their money on a house or condo purchase in Pattaya, there are 10 that have/will had their houses on the market (often vacant) for years and lose money on a house/condo purchase/sale (we could debate whether the loss would be a gain if and when converted back into foreign currency). That is due to some economic reasons to be sure, but also political reasons. And the inability to "own" land and a home doesn't help. I do agree that it is a function of price, and at some price everything is sellable. But most of us would rather hold a piece of real estate than to realize the loss by selling our home in a down (aka "dead") market (prices are "sticky downward"), "hoping" that the market will turn around and the price with return to its previous level -- unlikely to happen here, but you can always hope. If you have a crystal ball and know the future perfectly, and your decisions to buy a house here reflect that degree of certainty, then as you say, no problem, "Who cares?" But things change, lives change, needs change, and if that means that a move is necessary or would be desirable, that will be very difficult if you are a Pattaya home owner (it is likely easier for a condo owner, because condos are fairly easy to rent to tourists, unlike homes). For many people, that mobility/flexibility in the face of an unknowable future is important and a valuable element of a home. As you say, "But if it is your castle, and you are in it for the long run, who cares?" In Pattaya, if you are a home owner, you are in it for the long run, whether you want to be or not.... Renting may have costs, but as Tolley suggested, the costs are not as big as has been suggested, and if you factor the loss you will likely experience if you need/want to sell a home in Pattaya, the costs of home ownership go up significantly. And renting does provide the ability to get out if and when you want without exposure to a capital loss, which is a very valuable aspect of the rent/own decision. But you are of course correct, neither decision is right or wrong, so long as you know what you are doing and properly factor into the decision the risks you are taking. Next time I am in the market for a home here in Thailand, I'll borrow your crystal ball if you don't mind....

But the rent that you have paid IS a capital loss.

If a house / condo owner sells their property at the purchase price, less what they would have paid in rent over the years of ownership, then they are no worse off than a renter except fot the time / hassle in byuing and selling and the need to pay the full amount up front. But weighted against that is the opportunity to make a capital gain, something which a renter doesn't have.

[Thailaw]

But the rent that you have paid IS a capital loss.

If a house / condo owner sells their property at the purchase price, less what they would have paid in rent over the years of ownership, then they are no worse off than a renter except fot the time / hassle in byuing and selling and the need to pay the full amount up front. But weighted against that is the opportunity to make a capital gain, something which a renter doesn't have.

Your post IS completely wrong, and demonstrates a complete lack of understanding of the issues involved. No doubt, you are a Pattaya "home owner".

[jori]

But the rent that you have paid IS a capital loss.

If a house / condo owner sells their property at the purchase price, less what they would have paid in rent over the years of ownership, then they are no worse off than a renter except fot the time / hassle in byuing and selling and the need to pay the full amount up front. But weighted against that is the opportunity to make a capital gain, something which a renter doesn't have.

But this is assuming that a house /condo can be sold,the OP stated almost impossible to sell,I'll go along with that statement,with an addition that will be impossible to sell

[Tolley]

The problem is that for the majority of people it is very difficult to make any capital gain out of property in Pattaya and that is even if they can sell the property in the first place.

That is without mentioning the numerous scams that foreigners become victim to in Thailand. e.g. buying off the plan and property never being completed,

land ownership in wife or girlfriends name and land is appropriated by girlfriend/wife,

shoddy workmanship rendering property unliveable without major repairs within a short period of time,

reluctance of Thais to buy second hand properties etc etc etc

[mrbojangles]

But this is assuming that a house /condo can be sold,the OP stated almost impossible to sell,I'll go along with that statement,with an addition that will be impossible to sell

At the right price, nothing is impossible to sell.

Although I'm not looking to buy at the moment, mainly for many of the reasons stated, if a desperate guy came in the bar and wanted to sell his property for a million baht, that he bought a couple of years ago for 5 million. All legalities in place etc, I'd not only be tempted, I'd snatch his hand off.

[jori]

But this is assuming that a house /condo can be sold,the OP stated almost impossible to sell,I'll go along with that statement,with an addition that will be impossible to sell

At the right price, nothing is impossible to sell.

Although I'm not looking to buy at the moment, mainly for many of the reasons stated, if a desperate guy came in the bar and wanted to sell his property for a million baht, that he bought a couple of years ago for 5 million. All legalities in place etc, I'd not only be tempted, I'd snatch his hand off.

I cannot see that happening somehow,anyone selling would want enough to buy or at least rent in their home country or thereabouts on their sale proceeds,and they sure are not going to realise that dream now at pricing levels . It will be down to Thai purchasers at their levels which will eventually prevail.

Existing owners will just sit on their properties until they die.

[mrbojangles]

But this is assuming that a house /condo can be sold,the OP stated almost impossible to sell,I'll go along with that statement,with an addition that will be impossible to sell

At the right price, nothing is impossible to sell.

Although I'm not looking to buy at the moment, mainly for many of the reasons stated, if a desperate guy came in the bar and wanted to sell his property for a million baht, that he bought a couple of years ago for 5 million. All legalities in place etc, I'd not only be tempted, I'd snatch his hand off.

I cannot see that happening somehow,anyone selling would want enough to buy or at least rent in their home country or thereabouts on their sale proceeds,and they sure are not going to realise that dream now at pricing levels . It will be down to Thai purchasers at their levels which will eventually prevail.

Existing owners will just sit on their properties until they die.

That was an answer to the post about it being impossible to sell. And nothing is impossible to sell at the right price.

However, I have made a very tidy sum buying and selling houses at knock down prices in the UK, from people desperate for the money and a quick sale. Peoples individual circumstances dictate what they can and cannot do and not all people can afford to sit on a property whilst they wait for it to sell.

[LennyW]

But this is assuming that a house /condo can be sold,the OP stated almost impossible to sell,I'll go along with that statement,with an addition that will be impossible to sell

Complete nonsense as usual^.

One of my previous customers that bought a house from me in 2005 for 4.9M has just sold it for 6.2M, since he bought it he has a tennant in it paying 42,000 a month in rent - so quite a healthy profit there. But like i said already, a well built property, well maintained in a good location!

A Thai freind of ours just sold his small house for 5.1m baht, he paid 3.9 for it about 2 or 3 years ago, again decent profit, but again - well built, well maintained and in a good area.

The problems arise when people buy these "cheap" houses thinking they are getting a bargain, and then spend all their time complaining about shoddy workmanship, lack of maintainence in the project, etc. etc - then they try to sell the house at a "foriegner" price when they have just bought at a Thai price, then they complain some more because nobody is foolish enough to fall for it and it wont sell!!

Houses do sell but you have to be able to check the boxes! House or Condo, if you are buying take a good look at what you are buying, just do it right and it will serve you well in the future!

[bubba1]

foreigners buying houses under these schemes are not very smart. Foreigners can't own land in Thailand. Don't be a fool or you might lose everything

[morphious]

foreigners buying houses under these schemes are not very smart. Foreigners can't own land in Thailand. Don't be a fool or you might lose everything

Wrong. land can be owned through a registered business, or 49% can be owned with 51% being owned by youre spouse erm i think...........

[bubba1]

foreigners buying houses under these schemes are not very smart. Foreigners can't own land in Thailand. Don't be a fool or you might lose everything

Wrong. land can be owned through a registered business, or 49% can be owned with 51% being owned by youre spouse erm i think...........

A foreigner can't own land without having a Thai person involved. Not a very smart thing.

[LennyW]

Another thing that sours both the House and Condo resale market is the foriegner that buys it for lets say 2M then within a few weeks he has it up for sale 5M, and when you ask them why they say - "because thats how much i need to buy my next place" no rationalle in their pricing structure other than what they "need" !!! Incredible but true!

And again these will sit forever at their inflated prices and this gives a distorted view of the market.

[morphious]

foreigners buying houses under these schemes are not very smart. Foreigners can't own land in Thailand. Don't be a fool or you might lose everything

Wrong. land can be owned through a registered business, or 49% can be owned with 51% being owned by youre spouse erm i think...........

A foreigner can't own land without having a Thai person involved. Not a very smart thing.

Meaning?

[LennyW]

foreigners buying houses under these schemes are not very smart. Foreigners can't own land in Thailand. Don't be a fool or you might lose everything

Wrong. land can be owned through a registered business, or 49% can be owned with 51% being owned by youre spouse erm i think...........

A foreigner can't own land without having a Thai person involved. Not a very smart thing.

If done properly there is no risk, tens of thousands of happy foriegn home owners in the country are testament to that!

But far too many people think with their little head instead of the one on top of their shoulders, you can buy a house/land in your own name in the UK, but if you have a bitch of a wife you will loose it anyway, yet people still do it!

[bubba1]

foreigners buying houses under these schemes are not very smart. Foreigners can't own land in Thailand. Don't be a fool or you might lose everything

Wrong. land can be owned through a registered business, or 49% can be owned with 51% being owned by youre spouse erm i think...........

A foreigner can't own land without having a Thai person involved. Not a very smart thing.

Meaning?

meaning is there is a good chance you will be left high and dry

[morphious]

Bubba1, do you ever say anything half decent about Thailand or the Thais from reading your posts i would think not. I have had a house in Thailand for years and a business pretty much the same without any problems, the inlaws have been nothing but great with me and im sure i cant be the only one.

I accept some people have been duped, but you will find that most have not unless they are trying to live a pipe dream thinking that life over here is the same as a two week holiday in pattaya.

I would be intrested to know where your knowledge of Thailand comes from and your continued connection with the country is mate, are you married and living here?

[Thailaw]

But this is assuming that a house /condo can be sold,the OP stated almost impossible to sell,I'll go along with that statement,with an addition that will be impossible to sell

Complete nonsense as usual^.

One of my previous customers that bought a house from me in 2005 for 4.9M has just sold it for 6.2M, since he bought it he has a tennant in it paying 42,000 a month in rent - so quite a healthy profit there. But like i said already, a well built property, well maintained in a good location!

A Thai freind of ours just sold his small house for 5.1m baht, he paid 3.9 for it about 2 or 3 years ago, again decent profit, but again - well built, well maintained and in a good area.

The problems arise when people buy these "cheap" houses thinking they are getting a bargain, and then spend all their time complaining about shoddy workmanship, lack of maintainence in the project, etc. etc - then they try to sell the house at a "foriegner" price when they have just bought at a Thai price, then they complain some more because nobody is foolish enough to fall for it and it wont sell!!

Houses do sell but you have to be able to check the boxes! House or Condo, if you are buying take a good look at what you are buying, just do it right and it will serve you well in the future!

The figures you cite are the things dreams (or illusions) are made of. As between your post (which I dismiss as biased and self-serving) and Jori's, your's is, I think, the more complete nonsense. If I had a property I paid B4.9 milion and was renting it continuously for 5 years at B45,000/month (or B540,000 per year), I am getting a return of 11.02% on my investment, I assume tax free. Why would anyone give that up??? Of course, they wouldn't. Rents are, in fact, low here because of the abundant supply and inability to sell. Perhaps you are also in the fertilizer business, it looks (smells) like it.

[LennyW]

The figures you cite are the things dreams (or illusions) are made of. As between your post (which I dismiss as biased and self-serving) and Jori's, your's is, I think, the more complete nonsense. If I had a property I paid B4.9 milion and was renting it continuously for 5 years at B45,000/month (or B540,000 per year), I am getting a return of 11.02% on my investment, I assume tax free. Why would anyone give that up??? Of course, they wouldn't. Rents are, in fact, low here because of the abundant supply and inability to sell. Perhaps you are also in the fertilizer business, it looks (smells) like it.

Sorry if you cant handle the truth but that is the facts.

Why would anyone give that up? - that is up to them dont you think?

[bubba1]

The figures you cite are the things dreams (or illusions) are made of. As between your post (which I dismiss as biased and self-serving) and Jori's, your's is, I think, the more complete nonsense. If I had a property I paid B4.9 milion and was renting it continuously for 5 years at B45,000/month (or B540,000 per year), I am getting a return of 11.02% on my investment, I assume tax free. Why would anyone give that up??? Of course, they wouldn't. Rents are, in fact, low here because of the abundant supply and inability to sell. Perhaps you are also in the fertilizer business, it looks (smells) like it.

Sorry if you cant handle the truth but that is the facts.

Why would anyone give that up? - that is up to them dont you think?

'Up to them' sounds like a bargirl talking. It is not rational and does not make sense and you don't have any explanation for it?

[LennyW]

The figures you cite are the things dreams (or illusions) are made of. As between your post (which I dismiss as biased and self-serving) and Jori's, your's is, I think, the more complete nonsense. If I had a property I paid B4.9 milion and was renting it continuously for 5 years at B45,000/month (or B540,000 per year), I am getting a return of 11.02% on my investment, I assume tax free. Why would anyone give that up??? Of course, they wouldn't. Rents are, in fact, low here because of the abundant supply and inability to sell. Perhaps you are also in the fertilizer business, it looks (smells) like it.

Sorry if you cant handle the truth but that is the facts.

Why would anyone give that up? - that is up to them dont you think?

'Up to them' sounds like a bargirl talking. It is not rational and does not make sense and you don't have any explanation for it?

Not rational to who ? you? why would anyone justify themselves to you for what they have done??

"Up to them" may sound like a bargirl talking but that is the fact, what they have done with their money is up to them.

If you must know, he is building an eight and a half rai resort that needs funding, not that it is any of your business like!!:jerk:

[morphious]

There is a house next door to me Thai owned but never been lived in there has been no canges to the house since the builders left it when it was finished and has now been up for sale for 3 or more years.They can not sell it simply because they want 2m baht more than they payed for it which seems to be a regular occurence at the moment. Properties will sell if they are the right price otherwise they will just add to the ever growing market of rentals where owners are getting basically peanuts a month due to the sheer size of the rental market. I know of expats who rent 3 bed houses for less than 10k a month.

[pop3]

All property will sell, all you need to do is offer it as the right price.

Exactly!!!

..........................................

Problem is the right price in this market might mean giving it away

[jori]

The figures you cite are the things dreams (or illusions) are made of. As between your post (which I dismiss as biased and self-serving) and Jori's, your's is, I think, the more complete nonsense. If I had a property I paid B4.9 milion and was renting it continuously for 5 years at B45,000/month (or B540,000 per year), I am getting a return of 11.02% on my investment, I assume tax free. Why would anyone give that up??? Of course, they wouldn't. Rents are, in fact, low here because of the abundant supply and inability to sell. Perhaps you are also in the fertilizer business, it looks (smells) like it.

Sorry if you cant handle the truth but that is the facts.

Why would anyone give that up? - that is up to them dont you think?

'Up to them' sounds like a bargirl talking. It is not rational and does not make sense and you don't have any explanation for it?

Not rational to who ? you? why would anyone justify themselves to you for what they have done??

"Up to them" may sound like a bargirl talking but that is the fact, what they have done with their money is up to them.

If you must know, he is building an eight and a half rai resort that needs funding, not that it is any of your business like!!:jerk:

Oh dear someone is getting very uptight,why is this ? frustration or something irritating I presume. What you quote was years ago,but afraid as you will now be finding out things are rapidly changing ,and not just lower and lower values on houses/condos but the fact of ever disposing of them which is an impossibilty,and the nonsense you spout about being "well built","well maintained" being a sure fire winner as to selling is ludicrous,nothing here is ever going to sell ,period.

See how far that 11.whatever % has spread over the last year or so ,not much there now is there?

As for your reasoning about Bob the Builder and the Mystic East quoting hole digging I thought was quite funny really.Remember you are stuck here for life,I'm not,I can move on,you cannot and I sure as hel_l know which side of the fence I would rather be on.

Yes I do need to get some wreaths ready for my departure,the piece about dying with your property was quite true,but then we all have to die,but I'd rather choose my spot than having it chosen for me LOL

[PattayaParent]

But the rent that you have paid IS a capital loss.

If a house / condo owner sells their property at the purchase price, less what they would have paid in rent over the years of ownership, then they are no worse off than a renter except fot the time / hassle in byuing and selling and the need to pay the full amount up front. But weighted against that is the opportunity to make a capital gain, something which a renter doesn't have.

Your post IS completely wrong, and demonstrates a complete lack of understanding of the issues involved. No doubt, you are a Pattaya "home owner".

paying rent is money going away that you have no chance of recovering, ie. a loss of capital

Or do you think it's a capital gain?

[PattayaParent]

The problem is that for the majority of people it is very difficult to make any capital gain out of property in Pattaya and that is even if they can sell the property in the first place.

That is without mentioning the numerous scams that foreigners become victim to in Thailand. e.g. buying off the plan and property never being completed,

land ownership in wife or girlfriends name and land is appropriated by girlfriend/wife,

shoddy workmanship rendering property unliveable without major repairs within a short period of time,

reluctance of Thais to buy second hand properties etc etc etc

Depends at what exchange rate they bought the property at.

My old place I sold for the same Baht price as I bought it for but made a 40% capital gain on the GBP value.

The problem now is that the exchange rates are falling but the house / condo prices that Farangs are asking are staying the same in Baht, making them too expensive to buy with foreign currency.

[LennyW]

Oh dear someone is getting very uptight,why is this ? frustration or something irritating I presume. What you quote was years ago,but afraid as you will now be finding out things are rapidly changing ,and not just lower and lower values on houses/condos but the fact of ever disposing of them which is an impossibilty,and the nonsense you spout about being "well built","well maintained" being a sure fire winner as to selling is ludicrous,nothing here is ever going to sell ,period.

See how far that 11.whatever % has spread over the last year or so ,not much there now is there?

As for your reasoning about Bob the Builder and the Mystic East quoting hole digging I thought was quite funny really.Remember you are stuck here for life,I'm not,I can move on,you cannot and I sure as hel_l know which side of the fence I would rather be on.

Yes I do need to get some wreaths ready for my departure,the piece about dying with your property was quite true,but then we all have to die,but I'd rather choose my spot than having it chosen for me LOL

What i quoted was on two sales i know of both concluded in the last month.

It is quite evident from your posts you have no clue about property matters in Pattaya, so why do you persist in posting your nonsense on Pattaya property threads, i told you before it just makes you look silly!!

[thaimate]

A lot of good and bad points to this discussion,but as i said originally ,there is no way i would buy here in Pattaya ,one of my main reasons being that my wife wouldnt stay here when i die but would return home and build on her land close to her sisters.

also for many years i developed property in the UK and retired here on the proceeds, but selling a house here is a nightmare unless you sell at fire sale prices,no Falangs buying and Thais all buy under 2 million ,a friend of mine is an agent and in the last three years he has sold 1 house ,many condos but the house market is a no go .

as for renting our landlady has reduced the rental price from an original of 40k down to 27k just to keep us. also all that time our money has been invested earning 6% most of the time (its just dropped) so renting for us.

[TJG]

Having read this thread, I find it amazing that there are posters telling individuals who have bought property happily and successfully in Thailand that they must not do it and how stupid it is to do it. I too own property here and am very happy to do so. I did my research and bought a good property at a good price, at which it would sell quickly and easily if necessary, even in the current market. Admittedly, it would be hard to sell for much of a profit right now, because to have good prospects of selling in the current environment it would have to be a very good deal (which it would be at the price at which I bought), but even then I have not paid any rent for the last 4 years and thus am well ahead of the game. But I have no intention of selling. If I wanted a new house, I would keep this one and rent it out. The demand for nice rental properties at the right price in Pattaya is actually strong. At a sensible rental my house would return me roughly 7% per annum, which is a great deal better than I would get from most other secure investments in the current environment. If the economy improves, I would anticipate being able to get a higher rent and thus a higher net return.

Nevertheless, like those other posters who have purchased property here, I would not seek to tell those who do not want to do so that they should. So why are those who don't want to buy property here so aggressive in telling everyone that they must not do so? How do they know if they haven't done it themselves? I have done it and, as for many others, it has been a very good experience, so surely I am far more qualified to comment than those who have not done it. Do some buyers make a mistake and buy a bad property for a bad price? Of course, but buyers do that everywhere, not just in Thailand. A bad buy is a bad buy, whether in Thailand or elsewhere.

If you don't want to buy property in Thailand, absolutely fine, and entirely up to you, but please don't tell me and many others who have invested successfully in real estate in Thailand that we have made a mistake. I know many individuals personally who have made significant amounts of money by buying and selling Thai real estate. Of course, it is not so easy to make a lot of money right now doing so, but exactly the same can be said about dealing in real estate in many countries around the World, including highly developed countries like the UK. By the same token, in a poor market such as the one with which we are currently faced, there are some exceptional buying opportunties. Those individuals who suggest that property prices in Thailand will simply keep falling and falling, frankly that is nonsense. Firstly, an analysis of real estate prices anywhere in the World shows very clearly that over any extended period property prices rise at a rate greater than inflation over the same extended period. Secondly, the harsh reality is that the World is short of raw materials so it is inevitable that the prices of these materials will increase significantly over the coming years. That in itself will drive property prices up quite significantly, irrespective of demand driven inflation, as at the most simple level property prices are derived to an extent from the cost to build new properties.