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Buying A Condo In Pattaya


deejah

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If I had the faintest idea what an "opportunity cost" is I would probably say something about it.

As it is, buying a unit for 700K and living in it for 8 years, thus saving 550K rent and ending up with a unit that's probably worth 200-300K more today seems like a good deal to me. If the condo was bought using GBP in December 2003 then the owner has also made another 40+% on the drop in the value of the GBP to date.

Taking that 700K and putting it in a bank would not have produced a return anywhere near that.

Of course, the exchange rate and the property value could have gone the other way. But it didn't.

Seems like you understand opportunity cost. I read an article yesterday on buying vs. renting. An interesting point I had never considered was the concept of forced savings. In other words, your mortgage payments are basically going into a bank account...whereas your rent payments are gone. Here's the article:

Even where it's cheaper to rent, it doesn't necessarily mean renters will come out ahead, according to Ken Johnson, a real estate professor at Florida International University and co-author of a new study on whether it's better to buy or rent.

"Paying off a mortgage is a kind of forced savings," he said. Each check homeowners write lowers the balance they owe and increases the value of their property holdings. That, unlike cash in a bank account, is not easy to tap.

Homeowners have to go through a lengthy and costly process to access it by taking out a home equity loan or a cash-out refinance -- actions they tend not to take unless there's a specific need.

Depending on where they live, renters may save on monthly expenses but, unlike the forced savings of mortgage payments, they won't have anything to show for their monthly payments in the way of savings.

Ultimately, however, the decision whether to buy or rent depends on each person's situation and their plans for the future.

http://money.cnn.com/2011/08/16/real_estate/buy_rent/index.htm

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Forced savings is a very good idea for many of us. I as an example tend to use all my money on all sorts of chap I don't really need :D . In EU & US people pay their houses/condos off over maybe 20 years or more and finished paying just before retirement age. Then they have the option to stay cheaply or sell and have some money in the bank, maybe move over here buy a small place and still have money in the bank.

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If I had the faintest idea what an "opportunity cost" is I would probably say something about it.

As it is, buying a unit for 700K and living in it for 8 years, thus saving 550K rent and ending up with a unit that's probably worth 200-300K more today seems like a good deal to me. If the condo was bought using GBP in December 2003 then the owner has also made another 40+% on the drop in the value of the GBP to date.

Taking that 700K and putting it in a bank would not have produced a return anywhere near that.

Of course, the exchange rate and the property value could have gone the other way. But it didn't.

Careful Darrel you are going to piss off those real estate gurus that have been predicting a Pattaya real estate bubble burst for the past 10 - 15 years.

My experience, especially in resort communities like Pattaya, is there is always a good market for well located and reasonably priced real estate.

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Don't get me wrong: I also think that (in foreign currency terms especially) much property is seriously overpriced in Pattaya. And I expect a "correction" also, not least when all these new buildings are finished. But I'm also looking to buy, so needless to say I am only looking at places that are on sale today at below-average prices.

As you say, if you buy a reasonably priced unit in a good location there should always be a market for it. And if you live in it for 8 or 10 years instead of paying rent, the chances of being out of pocket at the end of it are remote, even if the value does drop.

What I wouldn't do here is buy several places that I know perfectly well I would never want to live in.

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If I had the faintest idea what an "opportunity cost" is I would probably say something about it.

As it is, buying a unit for 700K and living in it for 8 years, thus saving 550K rent and ending up with a unit that's probably worth 200-300K more today seems like a good deal to me. If the condo was bought using GBP in December 2003 then the owner has also made another 40+% on the drop in the value of the GBP to date.

Taking that 700K and putting it in a bank would not have produced a return anywhere near that.

Of course, the exchange rate and the property value could have gone the other way. But it didn't.

Excellent points.

The thing is, most "investors" except for a few--oftentimes as a matter of luck--will blow the other possible opportunities, one way or the other. There are opportunity costs and then there are your own housing costs; and the satisfaction of having a place of your own you can fix up for your own needs and tastes.

Returns on the above investment are quite satisfying enough, esp. compared to a bank deposit.

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If I had the faintest idea what an "opportunity cost" is I would probably say something about it.

As it is, buying a unit for 700K and living in it for 8 years, thus saving 550K rent and ending up with a unit that's probably worth 200-300K more today seems like a good deal to me. If the condo was bought using GBP in December 2003 then the owner has also made another 40+% on the drop in the value of the GBP to date.

Taking that 700K and putting it in a bank would not have produced a return anywhere near that.

Of course, the exchange rate and the property value could have gone the other way. But it didn't.

Excellent points.

The thing is, most "investors" except for a few--oftentimes as a matter of luck--will blow the other possible opportunities, one way or the other. There are opportunity costs and then there are your own housing costs; and the satisfaction of having a place of your own you can fix up for your own needs and tastes.

Returns on the above investment are quite satisfying enough, esp. compared to a bank deposit.

I agree 100%.

http://www.pattayada...-a-second-home/

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I just realized that I visited Thailand in 2003 and the exchange rate was 1USD=44 Baht. So 700 000 Baht back then was 16000 USD. Now 1000000Baht would be more than twice that much in US $. Isn't it a bit silly to pay that much?:huh:

Even if the streets of Pattaya are a bit cleaner than they were in 2003 :) .

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I just realized that I visited Thailand in 2003 and the exchange rate was 1USD=44 Baht. So 700 000 Baht back then was 16000 USD. Now 1000000Baht would be more than twice that much in US $. Isn't it a bit silly to pay that much?

Only if the THB goes down in value against the USD in the future. If it stays the same or rises then to buy today at that price was a good idea.

Trouble is, anyone who knows that in advance would own the entire planet already. The rest of us can only guess and wait for the benefit of hindsight.

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Don't get me wrong: I also think that (in foreign currency terms especially) much property is seriously overpriced in Pattaya. And I expect a "correction" also, not least when all these new buildings are finished. But I'm also looking to buy, so needless to say I am only looking at places that are on sale today at below-average prices.

As you say, if you buy a reasonably priced unit in a good location there should always be a market for it. And if you live in it for 8 or 10 years instead of paying rent, the chances of being out of pocket at the end of it are remote, even if the value does drop.

What I wouldn't do here is buy several places that I know perfectly well I would never want to live in.

Yes much of it is over priced. If you want to buy a grossly over priced and badly located property in Pattaya there is certainly no shortage of people willing to sell you one.

But jeez all of the doom and gloom not to mention the tunnel vision of those that seem to think their demographic or nationality is the only one in the market.

In Jomtien where I am currently focusing most of my Pattaya investments, English is not even the most frequently spoken language, unless you include the Indians who are quickly learning that Pattaya is not confined to Walking Street.

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Good point. In 10 years or so Pattaya will be full of Russians and Indians. Not exactly the kind of place where I would like to live :huh: .

Thanks for pointing that out. I'll have to think twice... or twenty times.

Pattaya is full of people from all over these days. If that frightens you then it probably will be better if you stay away.

We will miss all of your lucrative business. Sigh, hope we can cope.

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My experience as owner has been until now positive. I bought a unit in View Talay 1 for 700,000 baht in December 2003 an lived there until now , the alternative would have been paying a 6,000 baht monthly rent so you can quickly compute how much I saved.

You just had to bring logic into this?:D

Well if he had been renting during all those years it will be over 550K bath in rent so its a winner for sure, way better than rent in my opinion.

yeah. Nobody ever counts what the condo buying out of pocket money could be earning. 5% tax free municipal bonds are available. And it keeps your capital outlay. Sometimes better to be flexible in the living arrangements and committing to property in a foreign country is still something I am not willing to do, no matter how much I like the place.

Until someone points out the opportunity costs of the initial lump sum purchase.

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Good point. In 10 years or so Pattaya will be full of Russians and Indians. Not exactly the kind of place where I would like to live :huh: .

Thanks for pointing that out. I'll have to think twice... or twenty times.

Pattaya is full of people from all over these days. If that frightens you then it probably will be better if you stay away.

We will miss all of your lucrative business. Sigh, hope we can cope.

He-He, spot on, the diversity of the place/people makes it much more interesting.

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I didn't mean to offend anyone, of course. For me, the question is not "should I rent or should I buy in Pattaya", but rather "should I buy in Pattaya or elsewhere in Thailand or elsewhere in the world" a nice little place for when I'll be 50+. Naturally, I have to think ahead and wonder what the place will look like in 10 or 20 years from now...

I think I am more into diversity than most of you, but there are limits, especially when you want to live a peaceful life. Having been in India three times, I would rather not have Indian neighbours... (I love Indians, but from a safe distance ;) ). As for Russians... there happen to be lots of them where I'm living right now, and I'm a bit sick of them... or maybe I'm just allergic to their language :bah: .

It could well be that the expat community in Pattaya will change dramatically over the next decades... for better or worse. I think it's best to wait and see.

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I just realized that I visited Thailand in 2003 and the exchange rate was 1USD=44 Baht. So 700 000 Baht back then was 16000 USD. Now 1000000Baht would be more than twice that much in US $. Isn't it a bit silly to pay that much?

Only if the THB goes down in value against the USD in the future. If it stays the same or rises then to buy today at that price was a good idea.

Trouble is, anyone who knows that in advance would own the entire planet already. The rest of us can only guess and wait for the benefit of hindsight.

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I don't know where that article (www.pattayada.......) comes from, but it's in rather poor English... It's also full of nonsense: I can't imagine anybody being crazy enough to buy a second home in Albania or Skt.Petersburg!!!:lol:

It comes from The Telegraph, UK. I've been to quite a few of these places. I also don't agree with all of them (Kenya??? I would never live there, but great to visit). We spent a few weeks in Albania. To be honest, it was almost the highlight of our 3 month trip in and around that area. To our amazement, we loved the people there. And it has some incredible beauty...though some dark sides as well.

St. Petersburg is an incredibly beautiful city. Much better than Moscow, IMHO. The summers are fantastic, but the winters are brutal. I was there only for 5-6 days, but loved it. Too expensive for me.

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My point exactly. A nice/interesting place to visit is not necessarily a good place to buy a second home. After all, buying a second home is not like buying an ice cream... and I for one take my time even when I buy an ice cream :) .

I doubt that article comes from a British newspaper... It looks like it's written in Thai English to me... not to mention the inaccuracies...

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My point exactly. A nice/interesting place to visit is not necessarily a good place to buy a second home. After all, buying a second home is not like buying an ice cream... and I for one take my time even when I buy an ice cream :) .

I doubt that article comes from a British newspaper... It looks like it's written in Thai English to me... not to mention the inaccuracies...

Here's the original:

http://www.telegraph.co.uk/property/overseasproperty/8652030/20-best-places-to-buy-a-second-home-abroad.html

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Well that's a relief. The original is in correct English, and can actually tell the difference between Slovenia and Slovakia! I guess the Thais at www.pattayada.... not only can't write English, but can't read it properly either...:lol:

It puzzles me though why the original article chose to mention Pattaya rather than Chiang Mai. My guess would be that there are more expats living in CM than in Pattaya.

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My experience as owner has been until now positive. I bought a unit in View Talay 1 for 700,000 baht in December 2003 an lived there until now , the alternative would have been paying a 6,000 baht monthly rent so you can quickly compute how much I saved.

I agree that VIEW TALAY 1 is really the best choice, especially building B as it has one of the best view among View Talay condos (VT 1B on PATTAYA side).

Don't buy VT 2 except if you like to see VT1 from your window (pattaya side) or others building (jomtien side).

I went on the roof of all View talay buildings, and only the VT 5 and VT 8 have better view with no risk to have a new building coming in front, but they are a lot more expensive than VT 1.

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Well that's a relief. The original is in correct English, and can actually tell the difference between Slovenia and Slovakia! I guess the Thais at www.pattayada.... not only can't write English, but can't read it properly either...:lol:

It puzzles me though why the original article chose to mention Pattaya rather than Chiang Mai. My guess would be that there are more expats living in CM than in Pattaya.

Not sure that is a good guess :blink:

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