Cost Of Housing In Phuket

[thaiwanderer]

My understanding was that he has a 30 year lease in his name and he is currently residing in his premises. The very day his 30 year lease expires, the next 30 year lease starts, so, there are not two leases "active" at the one time and the second 30 year lease is a completely new lease. From memory, I think he mentioned it maybe in his son's name - not sure. I would assume all the papers are signed already etc etc - all he has to do is present them to the land office at the end of his 30 year lease.

I would ask the question though, at the end of his 30 year lease, what if the documents required for registration change, what if the Thai land owner sells or gifts the land, what if the Thai land owner dies etc. You would be presenting documents with names and signatures from a previous owner. How does that work?

Maybe I have misunderstood your post as well. The only way around that would be to register the second lease at the same time you registered your first lease and I thought that couldn't be done as well, otherwise, everyone would be doing it and it would be standard practice.

if its as you say, then the 2nd 30 years isn't registered (and cannot be yet).

[steelepulse]

It would be nice to split the 2 30 year lease issue into it's own thread and moved to the RE forum. That way OP has his thread, and this important subject of consecutive leases will have it's own.

[thaiwanderer]

(although paying for what you think is 60 years and getting 30 does make a difference on 'value for money')

Edited January 6, 2011 by thaiwanderer

[HDRIDER]

I got a 30 year leased house, i paid xxx for it and i rent it out for xxx, i am making 50% more than the house cost me every month renting it out, why is leasehold so bad???? if you’re in the retirement age and you lease a house then you have a cheap rent for the next 30 years, if you find the right place that is

[LivinLOS]

I got a 30 year leased house, i paid xxx for it and i rent it out for xxx, i am making 50% more than the house cost me every month renting it out, why is leasehold so bad???? if you’re in the retirement age and you lease a house then you have a cheap rent for the next 30 years, if you find the right place that is

Its not bad.. You realize your lease is 30 years, you understand the limitations, and have valued it based on that understanding.

Whats bad is when people are convinced that leasehold with clauses is equal to freehold, and value it on that basis.

[HDRIDER]

I got a 30 year leased house, i paid xxx for it and i rent it out for xxx, i am making 50% more than the house cost me every month renting it out, why is leasehold so bad???? if you’re in the retirement age and you lease a house then you have a cheap rent for the next 30 years, if you find the right place that is

Its not bad.. You realize your lease is 30 years, you understand the limitations, and have valued it based on that understanding.

Whats bad is when people are convinced that leasehold with clauses is equal to freehold, and value it on that basis.

I knew i was renting a house for 30 years, i wanted to live there myself but found a other house, in 30 years that house is worth nothing like a lot of houses here, but i could see if i leased/rented for 30 years it would be half the price i had to pay every month than if i just rented it year by year.

[LivinLOS]

Yeah and that makes perfect sense.. You also recognize that Thai houses are not built to last 100's of years like many western homes and see it as a depreciating asset.. Its when people are trying leasehold (with it not being with a family member) and see it as an appreciating asset.. Thats the mistake.

In your case as I say, totally sensible choice, and I am sure rental yields will rise and the lease remains fixed.

[Valentine]

It would be nice to split the 2 30 year lease issue into it's own thread and moved to the RE forum. That way OP has his thread, and this important subject of consecutive leases will have it's own.

I agree, the thread has turned into an interesting discourse on leases which is off the original topic although distantly related. It comes up every year at the annual IBAP Legal Eagles meeting & the lawyers confirm that only a 30 year lease is legal & you cannot register anything beyond that. The +30 is simply an agreement between the two parties & may or may not be enforceable in a civil court. As has been stated over & over there are so many variables which can be used as an excuse to not continue after 30 years. HD seems to have a good grasp of the lease situation in that he is able to use it to his advantage & does not have any dreams of realising a huge profit from passing on the lease although he seems to be doing quite well with his business model by viewing it as a rental proposition.

[NamKangMan]

I agree, the thread has turned into an interesting discourse on leases which is off the original topic although distantly related. It comes up every year at the annual IBAP Legal Eagles meeting & the lawyers confirm that only a 30 year lease is legal & you cannot register anything beyond that. The +30 is simply an agreement between the two parties & may or may not be enforceable in a civil court. As has been stated over & over there are so many variables which can be used as an excuse to not continue after 30 years. HD seems to have a good grasp of the lease situation in that he is able to use it to his advantage & does not have any dreams of realising a huge profit from passing on the lease although he seems to be doing quite well with his business model by viewing it as a rental proposition.

I tend to disagree with you that this thread is not related to the OP (Cost of housing in Phuket). Like LOS says, farang are viewing their +30+30 as, basically, a 90 year freehold, which we all know, may or may not, work out.

When the first lot of these 30 year leases come up for renewal / re-registration, if they are disputed and require a Court decision, we would have to see a sharp drop in house/land prices on Phuket until the Court hands down it's decision and even then, consumer confidence would always remain low as Thailand's law does not allow for "precendent judgements" to rule. Surely, there will be a big "stir up" in the market as farang would now value the market as HD did, thus significantly lowering the sale price of housing as the relization hits home that you should not pay a freehold price for a house that you are just renting for 30 years.

[stevenl]

When the first lot of these 30 year leases come up for renewal / re-registration, if they are disputed and require a Court decision, we would have to see a sharp drop in house/land prices on Phuket

I don't think we will see a drop.

and even then, consumer confidence would always remain low as Thailand's law does not allow for "precendent judgements" to rule.

So consumer confidence should have been low in the past as well, the issues at hand have not changed.

Surely, there will be a big "stir up" in the market as farang would now value the market as HD did, thus significantly lowering the sale price of housing as the relization hits home that you should not pay a freehold price for a house that you are just renting for 30 years.

I don't think there will be.

[barka]

All these posts are pure speculation regarding these leases.. mine included....i think we all have to wait untill we have a test case to see what the outcome will be...this thread has been very interesting.. and some very good opinions and examples of what to look for and what to do if you are thinking of buying property here...i know i have learned a lot from it... good luck to the OP in his venture in buying here.. in Phuket.. always.. remeber....BUYER BEWARE...

[Valentine]

All these posts are pure speculation regarding these leases.. mine included....i think we all have to wait untill we have a test case to see what the outcome will be...this thread has been very interesting.. and some very good opinions and examples of what to look for and what to do if you are thinking of buying property here...i know i have learned a lot from it... good luck to the OP in his venture in buying here.. in Phuket.. always.. remeber....BUYER BEWARE...

There is no speculation regarding the law as it stands now in that only a maximum of 30 years can be registered & up to 3 years does not require registration. I don't think the test case will help as legal precedent does not always count in Thailand.

[barka]

All these posts are pure speculation regarding these leases.. mine included....i think we all have to wait untill we have a test case to see what the outcome will be...this thread has been very interesting.. and some very good opinions and examples of what to look for and what to do if you are thinking of buying property here...i know i have learned a lot from it... good luck to the OP in his venture in buying here.. in Phuket.. always.. remeber....BUYER BEWARE...

There is no speculation regarding the law as it stands now in that only a maximum of 30 years can be registered & up to 3 years does not require registration. I don't think the test case will help as legal precedent does not always count in Thailand.

i AGREE.. The law is as it stands.....what i should have said is regarding 30+ leases

[stevenl]

Agree, not much point in speculating about what will happen when the 30 year leases run out, because speculation is all it will be.

That would really put the thread off topic.

[thaiwanderer]

All these posts are pure speculation regarding these leases.. mine included....i think we all have to wait untill we have a test case to see what the outcome will be...this thread has been very interesting.. and some very good opinions and examples of what to look for and what to do if you are thinking of buying property here...i know i have learned a lot from it... good luck to the OP in his venture in buying here.. in Phuket.. always.. remeber....BUYER BEWARE...

There is no speculation regarding the law as it stands now in that only a maximum of 30 years can be registered & up to 3 years does not require registration. I don't think the test case will help as legal precedent does not always count in Thailand.

i AGREE.. The law is as it stands.....what i should have said is regarding 30+ leases

Not according to Katabeachbum who appears to maintain a valid registration has been made of a residential lease with an expiry date beyond 30 years after registration.

[LivinginKata]

Not according to Katabeachbum who appears to maintain a valid registration has been made of a residential lease with an expiry date beyond 30 years after registration.

I expect that Katabeachbum does have a Chanote with the two 30 year sequential leases in different names written on the back. From all the legal articles I have read then this is not the normal sequence for 30 year lease registrations. But we all know that the various government departments and individual officers interpret the rules as they see fit. If this were me then I would be keeping quiet about this and not rocking my boat....

[NamKangMan]

Not according to Katabeachbum who appears to maintain a valid registration has been made of a residential lease with an expiry date beyond 30 years after registration.

I expect that Katabeachbum does have a Chanote with the two 30 year sequential leases in different names written on the back. From all the legal articles I have read then this is not the normal sequence for 30 year lease registrations. But we all know that the various government departments and individual officers interpret the rules as they see fit. If this were me then I would be keeping quiet about this and not rocking my boat....

I thought the second 30 lease wasn't written on the back of the current 30 year lease but was a totally new lease, lodged with the Land Office, and due to start on the date his current 30 year lease finishes.

[KarenBravo]

I thought the second 30 lease wasn't written on the back of the current 30 year lease but was a totally new lease, lodged with the Land Office, and due to start on the date his current 30 year lease finishes.

The only thing that counts is what is written on the back of the land title paper and that is a maximum of a 30 year lease.

[LivinginKata]

Not according to Katabeachbum who appears to maintain a valid registration has been made of a residential lease with an expiry date beyond 30 years after registration.

I expect that Katabeachbum does have a Chanote with the two 30 year sequential leases in different names written on the back. From all the legal articles I have read then this is not the normal sequence for 30 year lease registrations. But we all know that the various government departments and individual officers interpret the rules as they see fit. If this were me then I would be keeping quiet about this and not rocking my boat....

I thought the second 30 lease wasn't written on the back of the current 30 year lease but was a totally new lease, lodged with the Land Office, and due to start on the date his current 30 year lease finishes.

Seems clear to me that Katabeachbum is saying he has 2 x 30 leases registered on the Chanote. (Note that Thai year 2612 is 58 years from now.}

it is registered and written on the back of the Chanotes (my copy and the copy filed in Land Office) like any other lease, except it expires year 2612 as I recall, and of course supported by an official tax reciept

[metisdead]

One post removed due to all caps. Typing with all capitals is in effect shouting and is poor forum netiquette.

Forum Netiquette

[oracle]

The land offices are allowed to register voidable acts if both parties insist, but they are not liable in any way according to the land code act. How do you read this?

Section 73: When it appears to the competent authority that the legal act to be recorded by the parties is void, he shall not be obliged to record it. If the legal act to be recorded by the parties appears voidable the competent authority shall record it when the party who may be damaged thereby insists.

A second lease term registered suggesting 60 years means nothing. Your rights remain a 30 year prepaid rental or lease whatever you want to call it. And it is a rental contract or tenancy and not an asset, meaning it can be terminated prior to expiration, even prior to 30 years. Try to get a mortgage on a rental lease in Thailand is as weak as a tenancy can get. What do you think a lease in Thailand is?

The second registered term remains a personal promise to give you another rental in 30 years time. Property sales in Phuket is multibillion dollar business with very influential person involved, anything that sells will be promoted and the land offices are part the game if they are told. A 30 year lease is the maximum that can be registered, anything longer, consecutive 30 year lease will be reduced to 30 years. The second term is not enforceable by action and NO court in Thailand will give the registered second term.

[thaiwanderer]

Given Katbeachbum and my (polite) disagreement in this thread and a similar issue raised in the real estate forum (about inconsistenices in land offices) I've started the below thread for the more regular real estate posters.

http://www.thaivisa.com/forum/topic/450086-regsitered-sequential-leases-not-renewal/

Katabeahbum - if I've misinterpreted your chanote or of course you have any other comments please do not hesitate to set it straight.

[katasyd]

Hugely inflated market with build quality being questionable on a majority of the properties on the market.

Patience is the key and i always wait for the after high season sales from people who went another year without a bite and just want out and sell at cost.

You are so right, i looked at some new houses being built 2 to 3 years ago

They were selling for between 2.5 and 3.2M

We looked at one of these houses recently, it was not well looked after,

The owner was asking 6.2 willing to reduce to 5.7M

I told him no thank you and wished him the best of luck as far as selling it.

So you settled for Rawai.

Was it a budget choice or a lifestyle choice?

Edited July 16, 2011 by LivinginKata
Flame removed

[petercallen]

You are so right, i looked at some new houses being built 2 to 3 years ago

They were selling for between 2.5 and 3.2M

We looked at one of these houses recently, it was not well looked after,

The owner was asking 6.2 willing to reduce to 5.7M

I told him no thank you and wished him the best of luck as far as selling it.

So you settled for Rawai.

Was it a budget choice or a lifestyle choice?

Certainly not a budget choice, i have seen much cheaper houses in Patong on a small plot of land

It was a lifestyle choice, a decent house is not cheap in Rawai as anyone who has bought here would know

[bubblegum]

Interesting read this is. Learned a lot.

I have been in real estate myself for thirty odd years, even have a Masters decree (yes such a thing actually exists) and have decided NOT to get involved at all in Phuket real estate.

It is a bit too much Wild Wild West, not my cup of thee.

I'm very happy renting for an absurt low price.

Have to agree (partly) with HD. See your 30 year lease as rent paid up front and you'll be allright. The comment about rental prices going up I do not agree with, well at least not in the short term. As there is so much on offer I do not see a price influx coming soon. I'm paying the same rent as I did 4 years ago and so are my neighbours, the landlord is just happy to have us paying our rent month on month in time.

[Blackandwhite]

I am no expert so I only offer my humble opinion,

Phuket's property market is no different to any other area when it comes to property values

In a busy tourist spot such as Phuket the property prices will always follow the trend on how popular the resort is but,

If the market is saturated with new property then this will increase choice and at the same time decrease slightly the value of the other properties simply as there is more choice and more ability to be able to barter a little

With the added factor people at present simply have less money.

Developers are able to build fairly good standard houses at a very low cost and name the price to sell at, there seems to be massive markups on some new builds, there are some developers that are a little greedy but they have no real need to sell off any cheaper than they wish as the cost to build was actually very low, if say the build 6 houses or bungalows and and make a minimum of 30% on each once four are sold they can hold out for top money on the rest.

The next thing that happens when you by an over priced house you then are under the impression you will sell that over priced house for a profit.

Supply and demand dictates value, more choice lowers the cost.

I think, properties remain on the market for a long time there is only a few reason for this

Over priced - to much other choice - poor quality - risk related to world economic and securities issues

'' I think !!! ''

[petercallen]

The housing market here is no different to anywhere else in the world although some people will

try to tell you it is

There is a huge over supply of all types of housing and it is definitely a buyers market

The house we bought was far better value at the asking price than most places we looked at

and we still bought it at a substantially discounted price from the asking price.

A friend also bought a house a a very good price.

The houses/villas next to where we live started at 7.9M they dropped the price to 7.5M them7.2M

and now they are for sale at 6.8M and i do not think they have sold any of them

[happyfish88]

The laws of Supply and Demand, just don't seem to apply in this country when it comes to property.

Fully agreed :jap:

[happyfish88]

And on point B.. I love paying rent.. When the rent I pay is +- 2 - 3% of the house value and my money is making 20 - 30% offshore. Every year I didnt buy I made 10x my rent.

20-30%/! Please share!

Yes i would like to learn too......i'm e exact opp of you making 30-40% loss each year offshore.:jap:

[FlyByNights]

Depends what you want to do here in Thailand, either you want to stay here and live, or you want to make money buying and reselling real-estate. If you are looking at buying at least 1 RAI, you will find many nice pieces marked between 5-8 million depending on the area of the island. This of course is the lower end of the market. Then be ready to dish out another 2-4 mil on the build and fittings.

If you want to stay in Phuket just to live, better off renting for the next 20 yrs at 20,000-30,000. You'll find some really nice homes( villas) which rent at that price. I guess you can also do a lease hold if you like. Gives you a 30+30+30 yr contract. Makes you feel like you own something at least

Regardless the prices here are out of control in my opinion. There is no fixed market. Owners (Thai) will sell it for what they want, and if they don't get what they want they will just let it go to S%&%. for the next 5-10 yrs. Better off buying and building outside of Phuket. Up north a couple of km outside the city center, running water, and electric you can find some nice land. 1 RAI can go anywhere from 50,000- 2,000.000. Invest another 2,000,000 on the build and fixings, and you will have yourself a home which in Phuket would be worth 2-3 times the amount. Yes I know, there is no entertainment, no bar girls, no beach and not to many places to go shopping unless you go into the city center.

Flights are cheap enough that you can basically travel on the weekends anywhere throughout Thailand for under 3000 R/T. Stay a couple of nights or a week in the destination of your choice.

If you have the cash it doesn't really matter does it? For if you like it you will probably end up buying it anyway. For someone who does not have this type of money. I would really advise you to use you hard earned cash and look for deeper pastures. As it is this place is starting to look more and more like Tenerife every day. This might seem like paradise at first, but hang out for a couple of years and you slowly start thinking to yourself "is this really the place I thought it was going to be". .