House Investment

[khunMato]

I would like to continue to concentrate on my future plan, which is buying old houses and renovate them for a profit sale.

I plan to work with houses for around 1 mil to 2 mil. We all know that renovations is not something Thai people really do, so houses in that span should be quite cheep in a good location.

My questions to you all are:

How much does a full renovation of a 100 m2 house cost, i.e.change all electronics, kitchen and topcoats?

How much of a profit should I est. on a 100 m2 house, after renovation and a sale?

My wife comes from Pattaya and we plan to move back there. How difficult is it to sell a house there, i.e. an average house sales time?

I think of houses, perhaps it is smarter to concentrate on condos instead. If that is the case, why?

[arthurwait]

It's difficult to sell a secondhand house anywhere in Thailand people don't trust old houses because of the quality of the build varies.

You also need the original blueprint of the house now for any alterations to be signed off. Most were lost years ago. No one wants to buy them.

Thais generally aren't interested in buying secondhand renovated houses and not at a cost that would cover a farangs wages included in the price.

Money is in land in this country which will continue to appreciate for years. The value of the house itself due to the other points in real terms decreases.

The value of the land is what people buy for on secondhand houses. You can't own this, perhaps your wife can but it maybe asked where the money comes from at the time of transfer.

You can't legally do the work yourself.

Check out how many houses are on the Thai visa ads alone and how long they've been there especially in Pattaya.

Most farangs rent so your market to them in Pattaya is small. They rent due to not being able to own the land and nightmare neighbours with karioke etc and the lack of planning permission laws.

If you do find a way to do this I would say finding town houses slightly out of the centre of Bangkok would be your best bet as condos are as expensive as them now. Some young Thais have noticed this.

You will also need plenty of cash flow as the likelyhood is it will take at least a year to sell maybe a couple more if at all.

Edited September 6, 2012 by arthurwait

[rgs2001uk]

For you as a farang, financially not worth it.

I watch Thais doing this because they have to update their house before it falls apart.

Prices range from anywhere from 300k to 1 million baht, depending on the work required, usually a complete rewire of electrics, new plumbing, and in some cases a whole new roof, the biggest problem is rising damp (Bkk).

As mentioned by previous poster, Thais will and do buy older properties for their location, the first thing they do is knock them down and build a new house, this can easily save 2,3 or 4 million baht on the cost of a new house on a moo baan.

As for 2 million baht houses in a good location, where is a good location where houses can be had for that price?

Do you know anything about Thai feng shui?

[trogers]

If houses, your potential buyers will primarily be Thai. Those who can afford will buy land, demolish and rebuild.

If condo, potential buyers are both Thais and foreigners (within the 49% rule). But besides location, you need to consider the quality of the environment and building maintenance, and also the class of the occupiers. Seems there is an oversupply of condos in Pattaya, and some news of possible number of new projects that may never be build.

[davejones]

I think this would be extremely difficult unless you buy very cheaply from distressed buyers. Once you add in all the taxes and renovation costs it would be pretty difficult to make any profit at all.

Plenty of Thais buy 2nd hand property though, so not sure why some people think they don't. If you want to buy a house in central Bangkok you don't have much choice. If you're out in the sticks then it doesn't make much sense to buy a 2nd hand house unless it's in a great location. Probably cheaper to build you own.

I have seen plenty of 2nd hand houses in Bangkok that don't sell, but that seems to be because they are in an appalling state, yet have very high prices.

[johnnyk]

Who is your market? Very important question.

[givenall]

Bottom line, in Thailand it is very easy to buy but very difficult if not impossible to sell, especially if you expect to make a profit

[khunMato]

Thanks all for leaving me with an intact wallet and loss of a sure headache. It seems like you all do say the truth I have missed. I wonder if there has been a topic here on Thai Visa where every input leans at the same path, this topic - if you are sane, don´t do it!! You have all insured me to stay at my job in Krabi and to tell myself that I am already living in my dream, no need for a new one.

To answer rgs2001uk; not at the moment, perhaps I should buy a book on the matter.

[arthurwait]

Something I have noticed though is Thais with money do buy properties to renovate to rent out and sit on the property as the land value increases. Whether the rent covers the cost I have no idea. But 20 years down the line the land value should increase nicely.

As has been said above Bangkok is the best place to do this. Obviously as it's already crowded and where the work is. Pattaya on the other hand and other tourist and ex-pat places aren't good places with the economies in the west.

[davejones]

Something I have noticed though is Thais with money do buy properties to renovate to rent out and sit on the property as the land value increases. Whether the rent covers the cost I have no idea. But 20 years down the line the land value should increase nicely.

As has been said above Bangkok is the best place to do this. Obviously as it's already crowded and where the work is. Pattaya on the other hand and other tourist and ex-pat places aren't good places with the economies in the west.

At the moment, Thais are buying lots of property in Pattaya. This hasn't always been the case but now around 50% of sales are to Thai people. Pattaya is slowly changing. Will be hard to get rid of the sleaze totally, but I think it will change over the next 20-30 years.

Bangkok is not a great place to buy condos to rent out, as many are empty and have been for years.

There are plenty of people in the West with plenty of money. Economy there is only down slightly. It's not as bad as the news makes out.