Purchasing An Investment Condo In Bangkok

[rgs2001uk]

Besides the uncertainties regarding future prices of the condo and state of maintanance, calculate it just like any other investment:

2.5 Million purchase price, 12,000B rental income. That is what the OP was aiming for.

Let's say after agent fees and other costs, he can get regularly 100,000 Baht per year - an optimistic estimate.

That makes an annual gain of 4%.

Then you are basically investing in Thai Baht. Even if you can sell the condo with some gain after a few years, nobody can say how the THB will have developed. At the moment it is a strong currency and it may not weaken very much in the near future. But there is a high risk that this will change some day.

So basically you gain 4%, you have the risk of selling cheaper and have the risk of losing big in currency devaluation.

Not a great investment, considered that an Australian Bank will give you at least that in AUD and then you don't spend your money in THB.

But if you believe in the longterm stability of Thailand and the THB, well....... up to you

But the benefit of that 4% return is that its cash flow to you every month- no other investment gives you a stream of cash (as opposed to say a payment after one year deposit etc

The cash flow every month you talk of, is assuming he can rent it every month.

I suppose the ING fund that pays me a monthly income (with no one year deposit) is unknown to you.

[GreenSnapper]

I might have a look down that end thanks.

The site I am considering that might be good (pending release of the units!) is opposite President Park in Soi 24, opposite where Tops used to be.

2.mill bht seems aweful cheap for a new condo in soi 24. In fact i would suggest its impossible unless its less than the standars 35sqm studio

How do you know about these condos about to be built and do you have a link? would like to have a look myself :-)

Studios start at 25m2 now 35m2 is a 1 bed

Actually it's a studio with a glass wall.

[beachyman]

My off plan apt was finished recently.

I probably recommend going against the main thought process on TV and buying something that feasibly would be interesting for a Thai to buy and in areas not directly in CBD and Sukhumvit. In time I think areas adjacent to those places will grow and become more interesting.

Sure there is a lot of farang buyers here but if it is close to BTS or MRT, low rise and not too huge, not super noisy, less direct sunlight and somewhat affordable then you open the possibility to sell to a much larger market. I have visited a lot of high end condos and while they are nice I do not think it is possible for most Thais who want to buy a place to spend 5m THB for a larger 1 bedroom. A smaller place would be both easier to rent out and easier to sell.

Another thing to keep in mind is what type of developer you are signing up with. I would recommend only going with a larger, publicly traded company. Lots of cheaper, land owners who set up shop and may not have the best quality building components, delays if they dont sell enough units or a bad company manage the building. The public companies usually dont finance by selling units because they have several revenue streams. You can also visit their previous buildings and see the quality.

Rental income is good but there is a lot of wear and tear if you are not picky with your clients. The monthly fee is a whopping 9000THB a year for me so I just use it myself and do not deal with rentals. Also, you need a trustworthy property management company, which takes time and cost money.

Also, consider you may have to buy and hold for a minimum of five years or more for true capital appreciation and a serious buyer as there is a lot of choices.

Good luck and do a lot of due dilligence.

[ExpatJ]

Besides the uncertainties regarding future prices of the condo and state of maintanance, calculate it just like any other investment:

2.5 Million purchase price, 12,000B rental income. That is what the OP was aiming for.

Let's say after agent fees and other costs, he can get regularly 100,000 Baht per year - an optimistic estimate.

That makes an annual gain of 4%.

Then you are basically investing in Thai Baht. Even if you can sell the condo with some gain after a few years, nobody can say how the THB will have developed. At the moment it is a strong currency and it may not weaken very much in the near future. But there is a high risk that this will change some day.

So basically you gain 4%, you have the risk of selling cheaper and have the risk of losing big in currency devaluation.

Not a great investment, considered that an Australian Bank will give you at least that in AUD and then you don't spend your money in THB.

But if you believe in the longterm stability of Thailand and the THB, well....... up to you

But the benefit of that 4% return is that its cash flow to you every month- no other investment gives you a stream of cash (as opposed to say a payment after one year deposit etc

The cash flow every month you talk of, is assuming he can rent it every month.

I suppose the ING fund that pays me a monthly income (with no one year deposit) is unknown to you.

Yes the ING fund is unkonwn to me- do you mind giving us the name?

[ludditeman]

Sure there is a lot of farang buyers here but if it is close to BTS or MRT, low rise and not too huge, not super noisy, less direct sunlight and somewhat affordable then you open the possibility to sell to a much larger market. I have visited a lot of high end condos and while they are nice I do not think it is possible for most Thais who want to buy a place to spend 5m THB for a larger 1 bedroom. A smaller place would be both easier to rent out and easier to sell.

Condos in the 'farang' quota are sold at a much higher price than condos in the 'Thai' quota.

Unless you cut your condo price to the Thai condo price (25-50%), a Thai won't be buying it from you.

[Darrel]

It would be daft to sell to a Thai person a farang-name unit in a building that is popular with farangs (but there are plenty of idiots around who do it). At the very least a farang vendor selling to a Thai (or a company) should buy some cheap company name unit in the same building and transfer it to his own name on the same day as the other deal goes through, thus retaining the financial advantage of owning in the farang quota.

[beachyman]

Sure there is a lot of farang buyers here but if it is close to BTS or MRT, low rise and not too huge, not super noisy, less direct sunlight and somewhat affordable then you open the possibility to sell to a much larger market. I have visited a lot of high end condos and while they are nice I do not think it is possible for most Thais who want to buy a place to spend 5m THB for a larger 1 bedroom. A smaller place would be both easier to rent out and easier to sell.

Condos in the 'farang' quota are sold at a much higher price than condos in the 'Thai' quota.

Unless you cut your condo price to the Thai condo price (25-50%), a Thai won't be buying it from you.

Not in the development I bought from, simply because it was no where near 49% foreigners buying. At the time there were 3 other foreigners buying. My lawyer found out another 5 bought since them. The building it self is sold around 75% and is 150 units per building, three buildings. I confirmed prices being sold for via independents on prakard, via the developer and by asking other Thai buyers.

Sq. meter price was 71 per if I am not mistaken. I am pretty sure they have a two - tier price system for buildings in the CBD and Sukhumvit areas due to the overwhelming demand by foreigners though.

[beachyman]

It would be daft to sell to a Thai person a farang-name unit in a building that is popular with farangs (but there are plenty of idiots around who do it). At the very least a farang vendor selling to a Thai (or a company) should buy some cheap company name unit in the same building and transfer it to his own name on the same day as the other deal goes through, thus retaining the financial advantage of owning in the farang quota.

That is true. I have not really thought about the intricacies as I will likely not be looking to sell for another 4-5 years.

[sparebox2]

Have you thought about buying a tenament flat in the East End of Glasgow as an alternative?

SC

You are joking right. People in East End of Glasgow speak an English language which I do not comprehend (my last visit was about 10 years ago). I must add that I am not a British.

[Darrel]

Not in the development I bought from, simply because it was no where near 49% foreigners buying.

Even in Pattaya not all buildings have 49% farang ownership, though the ones that dont do tend to be somewhat run-down and/or in difficult locations.

[StreetCowboy]

Have you thought about buying a tenament flat in the East End of Glasgow as an alternative?

SC

You are joking right. People in East End of Glasgow speak an English language which I do not comprehend (my last visit was about 10 years ago). I must add that I am not a British.

If you can't cope with the language barrier, maybe you should stay at home. Even in Glasgow, people understand pointing.

And indeed, most aspects of brickwork.

SC

[PattayaParent]

It would be daft to sell to a Thai person a farang-name unit in a building that is popular with farangs (but there are plenty of idiots around who do it). At the very least a farang vendor selling to a Thai (or a company) should buy some cheap company name unit in the same building and transfer it to his own name on the same day as the other deal goes through, thus retaining the financial advantage of owning in the farang quota.

That is true. I have not really thought about the intricacies as I will likely not be looking to sell for another 4-5 years.

And what would you be planning to do with the money when you sell?

If you are going to send it back to Aus then you need to think about exchange rate loss.

If the Baht weakens back to 80 Baht to the GBP then you will get 40% less Quids back than you paid (I'm using the GBP exchange rates as an example as I don't know the Aus$ rates).

But if you're going to keep the money in Baht to spend, or buy another place then it's not a problem.

[beachyman]

It would be daft to sell to a Thai person a farang-name unit in a building that is popular with farangs (but there are plenty of idiots around who do it). At the very least a farang vendor selling to a Thai (or a company) should buy some cheap company name unit in the same building and transfer it to his own name on the same day as the other deal goes through, thus retaining the financial advantage of owning in the farang quota.

That is true. I have not really thought about the intricacies as I will likely not be looking to sell for another 4-5 years.

And what would you be planning to do with the money when you sell? If you are going to send it back to Aus then you need to think about exchange rate loss. If the Baht weakens back to 80 Baht to the GBP then you will get 40% less Quids back than you paid (I'm using the GBP exchange rates as an example as I don't know the Aus$ rates). But if you're going to keep the money in Baht to spend, or buy another place then it's not a problem.

Sorry, the OP was Australian. I am Swedish so I would be bringing it back to SEK or alternatively if there is a forex win I would move it to a USD or EUR account. I would not have invested if it was money I needed soon, I think short term condo buys here are not a good bet.

Problem with flipping it into another property is I would have to consider transfer costs, forex losses and so on because you have to take it out of the country and then back to get the FTE form and the land department to allow you to register the chanote. Maybe somebody has figured out a way around that issue.

Lastly, the developer is Property Perfect which is a pretty reputable one, former projects are all good quality builds and I can highly recommend them. Although if you can afford it I would probably recommend one like SC Asset or AP as they are a bit more user friendly but higher SQM prices as well.

[beachyman]

Not in the development I bought from, simply because it was no where near 49% foreigners buying.

Even in Pattaya not all buildings have 49% farang ownership, though the ones that dont do tend to be somewhat run-down and/or in difficult locations.

I was visiting a friend in Pattaya and took a look around some developments. Too be honest it did not look that promising and looking up the developer names with a lawyer colleague most of the companies I saw there are not publicly traded companies, it seems. Rather they seem to be landowners or speculators who borrowed financing and will finance through condo sales, like a bunch of projects I saw in Phuket. That seems pretty risky esp for a vacation location rather than a country capital in my opinion.

[Darrel]

Too be honest it did not look that promising and looking up the developer names with a lawyer colleague most of the companies I saw there are not publicly traded companies, it seems. Rather they seem to be landowners or speculators who borrowed financing and will finance through condo sales, like a bunch of projects I saw in Phuket.

Hence the big discounts for early purchasers. Pattaya real estate is a giant Ponzi scheme.

But you must have used a U-rated search engine. When I search for company and project names here I keep finding reports of bankruptcy and financial collapse, or indeed theft, fraud and legal action.

[alyx]

Have you thought about buying a tenament flat in the East End of Glasgow as an alternative?

SC

Hello SC you're being seriuous?

If yes, what should I expect pricewise , taxwise and return on investment?

Thanks

[beachyman]

Too be honest it did not look that promising and looking up the developer names with a lawyer colleague most of the companies I saw there are not publicly traded companies, it seems. Rather they seem to be landowners or speculators who borrowed financing and will finance through condo sales, like a bunch of projects I saw in Phuket.

Hence the big discounts for early purchasers. Pattaya real estate is a giant Ponzi scheme.

But you must have used a U-rated search engine. When I search for company and project names here I keep finding reports of bankruptcy and financial collapse, or indeed theft, fraud and legal action.

Property Perfect? Honestly I did not see any articles like that, from reputable news papers or forum posts?

Hmm, well I cannot comment on their other projects but the one I viewed was well managed and in good shape. My apartment is finished now and it looks good, did not have any legal problems and the building was finished on time although they still have to finish the gym area. They also gave me proper appliances from electrolux and a pretty big furniture package from SB in the price, I thought that was very fair. The area is not ideal for many expats I would presume because it is like 500m to Sutthisan or Huai Kwang MRT so car or using taxi-tuk tuk-moped is pretty much the way to go. I drive so I do not mind and it is quiet so I prefer it. It remains to be seen what happens in a year or two.

They have another project a bit cheaper around Udon Suk BTS for those that do not like the Huai Kwang (Metro Sky Ratchada) or Sathorn areas (Metro Park) - if anyone cares to take a look there. I might to take a look this weekend on the way to IKEA.

[thaifkrlim]

i am de-purchasing my 58 sqm 2 bed all mod con furnished condo 100m - onnut bts, few steps to carrefour, tenanted to 2 korean hetero, auction starts at 5 mils, lucky bidder gets monthly income of 23k

[travelmann]

i am de-purchasing my 58 sqm 2 bed all mod con furnished condo 100m - onnut bts, few steps to carrefour, tenanted to 2 korean hetero, auction starts at 5 mils, lucky bidder gets monthly income of 23k

condo one?

[Darrel]

Property Perfect? Honestly I did not see any articles like that, from reputable news papers or forum posts?

I have not searched for that name, nor do I know anything about them. Sorry if I didnt make that clear.

The names that I have looked for (all Pattaya-related names) often produce results that are not inspiring.

[beachyman]

Phew, you scared me haha. Thanks for clarifying!

[travelmann]

i am de-purchasing my 58 sqm 2 bed all mod con furnished condo 100m - onnut bts, few steps to carrefour, tenanted to 2 korean hetero, auction starts at 5 mils, lucky bidder gets monthly income of 23k

Ok The Room 79? Blocs 77?

I prefer my el cheapo units at lpn down the road with a return of 12k a month each purchase costs 1.17 mil baht, that i think youll find is over 10%

Edited January 17, 2012 by travelmann

[beachyman]

i am de-purchasing my 58 sqm 2 bed all mod con furnished condo 100m - onnut bts, few steps to carrefour, tenanted to 2 korean hetero, auction starts at 5 mils, lucky bidder gets monthly income of 23k

Ok The Room 79? Blocs 77?

I prefer my el cheapo units at lpn down the road with a return of 12k a month each purchase costs 1.17 mil baht, that i think youll find is over 10%

How are those LPN units? I have seen the ads and the square meter prices are crazy cheap. It is also pretty Thai style from the website but looks promising.

[farang000999]

You could buy stock in some of the bigger home/condo construction companies. More liquidity, less headache.

[Hooters]

You could buy stock in some of the bigger home/condo construction companies. More liquidity, less headache.

Unfortunatly that liquidity can disapear very very quickly. works both ways

[rotary]

As most of the other posts state...............there is a much greater chance of losing money on your proposed "investment" than there is of making money. There are thousands of people who made investments like this who would be happy to get 1/2 their money back, never mind any profit.

[StreetCowboy]

You could buy stock in some of the bigger home/condo construction companies. More liquidity, less headache.

Unfortunatly that liquidity can disapear very very quickly. works both ways

There's a lot less maintenance and other liabilities with holding stock in the property companies.

SC

[Hooters]

As most of the other posts state...............there is a much greater chance of losing money on your proposed "investment" than there is of making money. There are thousands of people who made investments like this who would be happy to get 1/2 their money back, never mind any profit.

Along with thousands that have doubled there money. Over the last few years I have lost money in the stock market but have made money on a condo sale. Some very strange advice on these threads without offering an altrenative means for capitol growth with a steady income. YOU will NOT get that in a bank, suprisingly the average JOE cant work out why that is the case

[BlackJack]

get something with a long term tenant

forget buying off the plan

many risks

the odd Soi's are better - Soi 11 (Indian and or Embassy type renters) to Soi 39 (Japanese area)

[Hooters]

get something with a long term tenant

forget buying off the plan

many risks

the odd Soi's are better - Soi 11 (Indian and or Embassy type renters) to Soi 39 (Japanese area)

agreed BJ the condo I live in is that area. However there have been changes made to off the plan purchases due to the reason you point out being risk. The better developers are now offering deposit purchase payable in stages relative to construction completion levels.

this is very important news to potential investors as it derisks significantly