Youve Gotta Be Nutz To Buy Property In Thailand

[Blue Unicorn]

Currently real estate in Thailand is a great investment and I have many many friends who have made alot of money from it. It has been for some time, a superb invesment. Also, contrary to what some people say, you can own property in Thailand. The technicalities are different to US or Europe but considering you are paying approximately a quatre of what you would pay for something similar in the US or Europe, it makes sense to anyone with money and a good invesment knowledge. Obviously if the country fell into chaos or war, then it would be problematic. However that is unlikely and once again, the low cost makes it a risk worth taking. Construction standards are well below the US or Europe unless it is built by professional people. I used to have 2 homes in Thailand and like anyone with common sense, employed a Thai company with foreign consultants to construct them. Cost more, but they did not rip me off and they understood building standards. I made excellent returns on my investment and enjoyed 10 years of good living at a fraction of the cost back home.

Edited February 8, 2006 by Blue Unicorn

[nokia]

2005/2006 Thailand TRS highlights

GDP forecast for 2006 is projected to be 5%, with an inflation rate of 3.5-4.5%.

----

Folks, there is risk in everything. Risk in action, risk in inaction. Why?

Assuming inflation rate is constant at 4% every year for the next 30 years,

the 6k monthly rent would have ballooned to 19.4k/mth in 2036,

so it would definitely be MUCH more than the 2mil cumulative.

We have always heard of landowners increasing the rents at their whims & fancies.

Fine, you can always move around, but if the general rent goes up,

Are you going to move from the city, to the sub-urban, than from the sub-urban to the rural

areas?

The thai economy is recovering & the oil price is rising, so the cost of living will go up.

i wonder what kind of house can you rent with 6k baht five years down the road?

like what xbusman said, NEVER INVEST MORE IN THAILAND THAN YOU ARE WILLING AND ABLE TO WALK AWAY FROM.

[charles]

The thai economy is recovering & the oil price is rising, so the cost of living will go up.

i wonder what kind of house can you rent with 6k baht five years down the road?

At a guess I'd say 6k.

Be careful about making assumptions. Personally, I've seen more than a few apartments in Bangkok with the same rates now as they had in 1998. Hard to drive rents up when so many new places are being built all the time.

Now if I considered the prices of alcoholic beverages in 1998 against 2006 then I would find some significant inflation.

[LoveDaBlues]

The thai economy is recovering & the oil price is rising, so the cost of living will go up.

i wonder what kind of house can you rent with 6k baht five years down the road?

At a guess I'd say 6k.

Be careful about making assumptions. Personally, I've seen more than a few apartments in Bangkok with the same rates now as they had in 1998. Hard to drive rents up when so many new places are being built all the time.

Now if I considered the prices of alcoholic beverages in 1998 against 2006 then I would find some significant inflation.

I just got wind of a new, 5 bedroom house with marble floors for rent.....3,000 baht a month. I will check it out soon but it will need to be pretty impressive for me to move.....I really like my 6,000 baht place.....have made friends with some of the locals, etc. NO I won't tell anyone where the location is until AFTER I have checked it out. Until I see a real trend (and not just speculation)

in rising rental prices it's the way to go for me. I figure to live about 30 more years (given my family history) so if rental prices go up an actual 3% on average each year (doubtful IMO) I'll still be able to rent a nice place for less than 12,000 baht 30 years from now. This option works best for me but I can't argue against buying/building for others depending on their situation/goals.

[Heng]

In my experience, I've found the tenant - landlord problem of 'someone wants to buy this property, so when your lease expires next year, we aren't going to renew' more common than the 'steady increase of rent over the years' problem. Usually not a huge issue, but can be a bit depressing (understandably) for tenants who like to do 'home improvements' and 'feel at home' in a particular rental unit.

[johnnyk]

In my experience, I've found the tenant - landlord problem of 'someone wants to buy this property, so when your lease expires next year, we aren't going to renew' more common than the 'steady increase of rent over the years' problem. Usually not a huge issue, but can be a bit depressing (understandably) for tenants who like to do 'home improvements' and 'feel at home' in a particular rental unit.

Yes!

I've lived in my own homes for many years with just two short periods as a renter when I changed cities.

I never felt 100% at home when I rented because I knew it didn't belong to me and the landlord held the cards.

[fvdv]

Lots and lots of Westerners have and are making money buying and selling houses/land in Phuket.

Most of the luxury estates were built by Westerners.

I bought 1.6 rai of land in 1999 at 1.5 million baht per rai. The last land in my soi sold three months ago for 5.5 million per rai.

I built a house on the land. The total cost was 8.5 million baht. It is now valued at between 15 and 18 million baht.

I do grant you that Phuket and Ko Samui are exceptions. Land prices just keep going up and up.

Dear Sir Burr,

Like lots of these westerners you mentioned, I’d like to make money by building a nice house (Samui) and sell with substantial profit.

Could you tell how they/you cope with the legal aspects?

- Owning the land? (through a 49% company)

- Work permit ?

- Eventuel taxes

- Or any other issue you experienced?

Thank you very much in advance and best wishes!

Fred

PS do you know any good site dealing with this topic?

[ThaiPauly]

Lots and lots of Westerners have and are making money buying and selling houses/land in Phuket.

Most of the luxury estates were built by Westerners.

I bought 1.6 rai of land in 1999 at 1.5 million baht per rai. The last land in my soi sold three months ago for 5.5 million per rai.

I built a house on the land. The total cost was 8.5 million baht. It is now valued at between 15 and 18 million baht.

I do grant you that Phuket and Ko Samui are exceptions. Land prices just keep going up and up.

Dear Sir Burr,

Like lots of these westerners you mentioned, I’d like to make money by building a nice house (Samui) and sell with substantial profit.

Wouldn't we all Mate

[austallia_1980]

Shame no one was listening to this kkf123 guy.

[Rinrada]

Currently real estate in Thailand is a great investment and I have many many friends who have made alot of money from it. It has been for some time, a superb invesment. Also, contrary to what some people say, you can own property in Thailand. The technicalities are different to US or Europe but considering you are paying approximately a quatre of what you would pay for something similar in the US or Europe, it makes sense to anyone with money and a good invesment knowledge.

Agree....

We are now finding that we are buying land in Chiang Mai and selling it on to Expat Thais here in London....all to do with a wee bit of trust.

[bquick]

The title of this topic is out of date now.

an up to date title would read " You HAD to be nutz to buy land in thailand"

or perhaps

"If you bought land in thailand it feels like getting kicked in the nutz now after the new rulez."

[iansc]

I am with the "Buy" brigade.

Simply because I wanted something that I could personalise and that would be a legacy for my Wife when I die.

As previously stated the cost was no more than I paid for my last car in the UK. I am also currently buying a Condo in Bangkok in my own name (just because I CAN buy it in my name).

I am not that much bothered if prices go up or down as I don't intend selling either. I also own propery back home so that will always be worth a lot and will end up being a legacy for my 3 children, in the meantime I rent it out and that gives me an income of 45,000 baht a month.

I DO beleive however that if it would take your last satang to buy out here or if you bought with finance and if your marriage/relationship broke up and you not left with enough cash to live on then it is better to rent.

I FULLY accept that if my Marriage broke down I would loose the house, but that still would be a lot less than I lost when my last marriage in the UK failed where I OWNED the house, but my ex-Wife got the biggest chunk of it, even though we had no children together

So my take is BUY if you can really afford it- RENT if you can't, it is not rocket science

TP

own versus rent....owed property in thailand for many years. Sold it and broke even at best...imo better to invest the money in other assets off shore and use part of the return to rent a property. Property returns over the last 3 years in Australia have been better than 10=15 years in Thailand. I also believe keep all funds off sure and remitt only when required. Renting has another benifet in that you can change your location when required. Try and sell your home in years to come in some of these farang ghettos...sorry guys..hehehe....funny how property owners try to talk up the situation....i have been on both sides of the fence...and know the truth of it.....555555

[iansc]

I've chosen to live in the Issan area. I'm just not a 'beach' person even though I grew up 1 block from the beach. Fly over Issan. Make mental note to self, 'holy <deleted> there's a ton on land NOT developed'. In our lifetimes you will always be able to purchase land cheaply in Issan if you are patient. Right now I choose to rent as it is so cheap. My house feels like home and indeed maybe someday I will build a house but why spend 2-3 million baht building a house (nice plot of land and super house) when I currently rent a nice place with no neighbors for 6,000 baht per month? With even my limited math skills it makes no sense.

Another plus with renting....none of the hassles that go with building.

My 2 baht.

Steve

For 6.000 baht/month x 12 months x 30 years = over 2 mio baht

For that amount I prefer to build to my specification

sorry the rent option is better...if you invest that 2 million baht...at a conservatve 6%...is 120,000 baht...is 10,000 baht per month so money left over...or just compound the investment....though 8-10% return should be easily achieved with diversified porfolio....

[iansc]

hmm......put 2 million baht in a house? Let's see....I've made 12% on my money for many years now. So this pays 20,000 baht a month on the 2 million. After paying rent of 6,000 baht I've got 14,000 baht left for whatever each month PLUS I keep the 2 million baht intact. I prefer this route.

I'm not saying I'm RIGHT I'm just saying this makes more sense TO ME.

12% on 2 mio baht ? must be a risky investment with no guarantee at all. I prefer to be guaranteed a 30 year's peace of mind in a house build to my specs rtaher than risk the loss of the 2 mio

not risky at 12%.....share market has out performed realestate over last 10 years even longer....no risk involved really...some stocks wont do as well sure, you even lose on some but big wins on others....how many farangs have lost their properties to cheating thais....haha...good luck my friend...i have been a property owner in thailand...starting back in1985...house and various plots of land residential and rural...and still own a small house...chaep one at that....sold the rest when currency was strong...but intend to keep all money off shore and remitt as required...its call total control of ones assets.

[iansc]

LOVEDABLUES

Please tell me where you put 2 mil baht to guarentee you 12% ? Not saying your lying but I don't think your telling the trueth either..... let me know as I could do with some.If you come up with the answer I'll stand corrected and apologise

12% is not hard my friend...lets start with collectable trade(german ww2 medal and badges etc) at 50-100% return...i do that as a side line via net...any where in the world..even in thailand.....then there are gold stocks currently with selected companies have returned 20-30% this year...average around 12-14%....and on and on...look at gold bullion na dhow that has done....good investment still....all have some risk involved...but somethings is always doing well.....local australian properties 20-25% p.a return ...etc etc

[Firefan]

He,he Iansc !

That sounds like a safe portfolio indeed! Gold stocks, gold bullions, ww2 medals and badges and some Australian property. Heck, why not take 20%/year from that and live like a king! Cheers!

[Blue Unicorn]

Given the horrific legal system in Thailand, and the rumored treatment of farang in these courts, why would you possibley want to buy property here? Y ou cant even own it outright for chrissakes. Who even wants to mess around with it then? I cant imagine dropping 8 million baht on a condo in Bangkok, to find out in five years that it was built like crap or is being maintained like crap. What kind of gurantee do you have in Thailand? Absolutely zero.

Invest your money and rent.

Really.....I have made 46 million baht about of property here so far and have a company turning over millions.....maybe I should listen to you

[KhunMarco]

Not you, but the average Joe should listen.

But Hey , you surely don't have any vested interest to change our minds right?

Malaysia here i come.

Edited May 31, 2006 by KhunMarco

[harrisou]

Anybody have any guesses what this will do to the condo market of

A- Thai and foreign marketed condos in BKK and resort areas

B- For Foreign marketed condos in BKK and resort areas

[pepi1]

Blue Unicorn----- I would keep very low key on your property dealings. You may be the first in the firing line by Thai Gov. Just my opinion.

[thaigene2]

Invest your money and rent.

You have a point.

A few month back, i was thinking exactly like you.

But... situation changes. And you should admit that "invest your money" might be today as INSECURE as buying real estate in Thailand...

We have way too many black clouds over the world economy theses days : oil prices, Iran, deflation risks, inflation, bubbles everywhere, crazy buyings on commodities, USD currency that might be crunched, deficits etc.

The list is frankly scary. And the consequences of each very scary too.

So, actually I've changed my mind : better to buy something REAL now.

I believe that the run on commodities (real estate is one) is one the proof that many people feel that something is wrong and want "real" things in their hands. And that the confidence in "finance" (stock, bonds, paper money) is disapearing at high speed...

The market is over flooded with liquidity. It means that we are loosing absolute value very quickly.

So buy now a bunch of bricks&mortar... why not after all ?

You have a good point here. My only extra thought is this - If the world does go to sh*t, where would I rather own property? Probably not Thailand..the farangs would get blamed..Just a thought

-ald