Buying Old And Shabby Apartments Or Condominiums

[hyperdimension]

I sometimes come across old apartments or condominiums in poor condition in otherwise good locations. They might sell for under 20k THB/m² which seems like a bargain compared to new marketing-hyped condominiums that may be in the same area but sell for 80k to 100k THB/m².

Would you buy a dilapidated old-style apartment or condominium and rent it out with no or minimal refurbishment, simply using the location to gain a relatively good yield? I'm thinking that there are people who just want to stay in a good and convenient location but don't want to pay too much in rent and don't mind staying in an old place.

I know that the quality and state of the building itself is a major deciding factor, but if the price is low enough would you still buy it? Some of you might say no if the building is just too old and shabby, but what if you got the place for free?

If you were to refurbish, then the question is would it be worth it? If you spent 20k THB/m² to buy it, would you spend another 20k THB/m² to refurbish it if the possibility is that you won't be able to double your yield if you did not refurbish?

[trogers]

Need the following considerations:

- Expected class of tenants and their rental budget to determine extent and cost of reburbishing the unit

- Class of present occupiers and how this will compliment or repulse your expected class of tenants. Also, the chance of convincing co-owners to put in money to upgrade the present state of the building.

[MrRealDeal]

I wouldn't be a slum lord so I guess the answer is No ...... We own a street side syle buiding and just renoveated it for the next tenant it wont make us any extra , just did it because it was the right thing to do.

[hyperdimension]

I wouldn't be a slum lord so I guess the answer is No ......

So I guess that if you did obtain a shabby place for free or extremely cheap then you would sell it instead of renting it out. That's still an OK decision, but what if you calculated that you could earn over 25% annual rental yield if you were to rent it out?

We own a street side syle buiding and just renoveated it for the next tenant it wont make us any extra , just did it because it was the right thing to do.

So it could be a matter of moral conscience or respectability. Possibly subconsciously you believed that it would be easier to find a new tenant, though in good locations that shouldn't be difficult anyway. But purely from a ROI point of view, spending money on something that does not provide any beneficial return is a waste. I guess it's a matter of perspective.

[davejones]

The answer is that if people are willing to rent it then leave it as it is. It's up to the renters to decide if the quality is good enough for them. It's not up to others to decide for them. If it's in too bad a state then no-one will rent. But some people don't really care about things like that, and that is their choice.

Where is this building? Can you tell us a little about it. For example, how many condos in building, what are other people living there like, how bad is the building, what rent do you think you can get, size of condo, etc.

[54321]

not sure what your point is other to ask the obvious. Refurbish it to get more rent or do nothing. It depends on the cost of the refurb and the expected rent

[hearditallbefore]

The only difference between an old shabby apt., condo or house and a new shabby one is PAINT! Go and watch a new home or building being built and you will see that before it is patched and painted, you can't tell if it was built 20 years ago or yesterday. The "new" bright purple 20 story-plus hotel next to Surasak BTS is a great example. It was ready to fall down years ago, and over the last 8 months, they patched and painted it, and now it's "new".

A "new" place will have cracks after 5 years, and a patched and painted place will have cracks after 5 years, up to you.

[davejones]

The only difference between an old shabby apt., condo or house and a new shabby one is PAINT! Go and watch a new home or building being built and you will see that before it is patched and painted, you can't tell if it was built 20 years ago or yesterday. The "new" bright purple 20 story-plus hotel next to Surasak BTS is a great example. It was ready to fall down years ago, and over the last 8 months, they patched and painted it, and now it's "new".

A "new" place will have cracks after 5 years, and a patched and painted place will have cracks after 5 years, up to you.

You obviously have no idea what renovating a builing involves.Paint a shabby old condo and you'll still have a shabby old condo. The hotel you mentioned is being practically rebuilt, not just painted. New windows, new lifts, new cladding, plus, much, much more. It's certainly not just being repainted.

[trogers]

The only difference between an old shabby apt., condo or house and a new shabby one is PAINT! Go and watch a new home or building being built and you will see that before it is patched and painted, you can't tell if it was built 20 years ago or yesterday. The "new" bright purple 20 story-plus hotel next to Surasak BTS is a great example. It was ready to fall down years ago, and over the last 8 months, they patched and painted it, and now it's "new".

A "new" place will have cracks after 5 years, and a patched and painted place will have cracks after 5 years, up to you.

This is one of 2 major considerations. An owner of a shabby unit can only paint the interior of the unit, not the whole building. If most of the other owners are apathetic on repainting the old building, they will also probably not be paying sufficient common fees to maintain the elevators, and have proper security and general cleaning.

Which tenant will pay high rents to stay in such a neighborhood?

Do not forget, ROI is the sum of rental yield and capital appreciation, and not just rental yield.

[Khun Jean]

Indeed sometimes it is interesting to just buy an old condo for the part of land that you will own. Especially in Bangkok land is expensive. Even 1/50th or 1/100th can be worth more than you think.

[trogers]

Indeed sometimes it is interesting to just buy an old condo for the part of land that you will own. Especially in Bangkok land is expensive. Even 1/50th or 1/100th can be worth more than you think.

Yes, I bought 2 old condo units on this point. But there are not many old low-rise condos on expensive land that will give you even 1/100th share of the land.

Also, the building must still be desirable to tenants to give you a reasonable rental yield while you wait to cash out on the increase in value of the land.

[hearditallbefore]

The only difference between an old shabby apt., condo or house and a new shabby one is PAINT! Go and watch a new home or building being built and you will see that before it is patched and painted, you can't tell if it was built 20 years ago or yesterday. The "new" bright purple 20 story-plus hotel next to Surasak BTS is a great example. It was ready to fall down years ago, and over the last 8 months, they patched and painted it, and now it's "new".

A "new" place will have cracks after 5 years, and a patched and painted place will have cracks after 5 years, up to you.

You obviously have no idea what renovating a builing involves.Paint a shabby old condo and you'll still have a shabby old condo. The hotel you mentioned is being practically rebuilt, not just painted. New windows, new lifts, new cladding, plus, much, much more. It's certainly not just being repainted.

Wrong answer trainee. You obviously have no idea what renovating a building involves IN THAILAND. That purple hotel is a gift wrapped turd. I could level it with a sledge by myself. Do you have any idea how weather affects cement or concrete?

Anyway, like I said, if you own the building, hire a known contractor to wrap that turd and it will be as good as new and make a profit (for Thailand) as it's all about looks here anyway, or listen to others and sink a billion baht into it 'doing it the right 'western' way and lose your ass. Up to you.

As far as buying a single room in someone elses unkempt building, I have no experience, so cannot comment.

Edited September 21, 2012 by hearditallbefore

[davejones]

The only difference between an old shabby apt., condo or house and a new shabby one is PAINT! Go and watch a new home or building being built and you will see that before it is patched and painted, you can't tell if it was built 20 years ago or yesterday. The "new" bright purple 20 story-plus hotel next to Surasak BTS is a great example. It was ready to fall down years ago, and over the last 8 months, they patched and painted it, and now it's "new".

A "new" place will have cracks after 5 years, and a patched and painted place will have cracks after 5 years, up to you.

You obviously have no idea what renovating a builing involves.Paint a shabby old condo and you'll still have a shabby old condo. The hotel you mentioned is being practically rebuilt, not just painted. New windows, new lifts, new cladding, plus, much, much more. It's certainly not just being repainted.

Wrong answer trainee. You obviously have no idea what renovating a building involves IN THAILAND. That purple hotel is a gift wrapped turd. I could level it with a sledge by myself. Do you have any idea how weather affects cement or concrete?

Anyway, like I said, if you own the building, hire a known contractor to wrap that turd and it will be as good as new and make a profit (for Thailand) as it's all about looks here anyway, or listen to others and sink a billion baht into it 'doing it the right 'western' way and lose your ass. Up to you.

As far as buying a single room in someone elses unkempt building, I have no experience, so cannot comment.

The purple hotel has had major renovation work. It is not just a paint job. Go take a look. I'm not making any claims about the quality, but new lifts, new windows and new cladding is not 'JUST PAINTING'. You claimed in your original comment that the only difference was PAINT. Now for some reason you're arguing about quality. Your original comment was wrong. End of story.

[hearditallbefore]

The only difference between an old shabby apt., condo or house and a new shabby one is PAINT! Go and watch a new home or building being built and you will see that before it is patched and painted, you can't tell if it was built 20 years ago or yesterday. The "new" bright purple 20 story-plus hotel next to Surasak BTS is a great example. It was ready to fall down years ago, and over the last 8 months, they patched and painted it, and now it's "new".

A "new" place will have cracks after 5 years, and a patched and painted place will have cracks after 5 years, up to you.

You obviously have no idea what renovating a builing involves.Paint a shabby old condo and you'll still have a shabby old condo. The hotel you mentioned is being practically rebuilt, not just painted. New windows, new lifts, new cladding, plus, much, much more. It's certainly not just being repainted.

Wrong answer trainee. You obviously have no idea what renovating a building involves IN THAILAND. That purple hotel is a gift wrapped turd. I could level it with a sledge by myself. Do you have any idea how weather affects cement or concrete?

Anyway, like I said, if you own the building, hire a known contractor to wrap that turd and it will be as good as new and make a profit (for Thailand) as it's all about looks here anyway, or listen to others and sink a billion baht into it 'doing it the right 'western' way and lose your ass. Up to you.

As far as buying a single room in someone elses unkempt building, I have no experience, so cannot comment.

The purple hotel has had major renovation work. It is not just a paint job. Go take a look. I'm not making any claims about the quality, but new lifts, new windows and new cladding is not 'JUST PAINTING'. You claimed in your original comment that the only difference was PAINT. Now for some reason you're arguing about quality. Your original comment was wrong. End of story.

Jeeeez, what is with people like you. I'm not arguing with you, I am teaching you. I live within eyesight of that building. Please read slowly - THEY DID NOT "RENOVATE" ANYTHING -----IT NEVER HAD LIFTS, WINDOWS OR CLADDING, SO HOW COULD IT GET "NEW" ANYTHING, AS IN REPLACEMENT. It was a naked, rusting, crumpling turd that they gift wrapped purple and now are adding everything you mentoned for the first time, on top of cracking, patched concrete.

MY ORIGINAL COMMENT WAS ABOUT THE BUILDING.

If you like it so much, go buy it, sounds like a good investment for you.

[davejones]

The building has

Jeeeez, what is with people like you. I'm not arguing with you, I am teaching you. I live within eyesight of that building. Please read slowly - THEY DID NOT "RENOVATE" ANYTHING -----IT NEVER HAD LIFTS, WINDOWS OR CLADDING, SO HOW COULD IT GET "NEW" ANYTHING, AS IN REPLACEMENT. It was a naked, rusting, crumpling turd that they gift wrapped purple and now are adding everything you mentoned for the first time, on top of cracking, patched concrete.

MY ORIGINAL COMMENT WAS ABOUT THE BUILDING.

If you like it so much, go buy it, sounds like a good investment for you.

The building now has windows and they are new. You are not teaching me anything. You're just making a fool of yourself. No need to reply, as I won't be reading this thread again. Good luck with your silly comments. Not a good investment, so not sure why you think I'd be interested.

[cheeryble]

Indeed sometimes it is interesting to just buy an old condo for the part of land that you will own. Especially in Bangkok land is expensive. Even 1/50th or 1/100th can be worth more than you think.

Kh Jean and TRogers

Once again an interesting perspective from you both,

I can only guess you are talking about the condo value rising on the back of the underlying land rising.

Suppose in future owners in the condo wanted to cash out by de-condoing and reverting to land to sell. Wouldn't one be faced with the situation typified under Napoleonic law in France.....where sales are so often held up because of the number of relatives owning small shares.....who can never all agree? Wouldn't it be the same with a condo where there would always be someone or several who wouldn't sell, or simply couldn't be found.....thus making the investment completely illiquid, essentially meaning a loss?

Obviously I am missing something as TR you have done it!

Cheeryble

Edited September 21, 2012 by cheeryble

[hearditallbefore]

The building has

Jeeeez, what is with people like you. I'm not arguing with you, I am teaching you. I live within eyesight of that building. Please read slowly - THEY DID NOT "RENOVATE" ANYTHING -----IT NEVER HAD LIFTS, WINDOWS OR CLADDING, SO HOW COULD IT GET "NEW" ANYTHING, AS IN REPLACEMENT. It was a naked, rusting, crumpling turd that they gift wrapped purple and now are adding everything you mentoned for the first time, on top of cracking, patched concrete.

MY ORIGINAL COMMENT WAS ABOUT THE BUILDING.

If you like it so much, go buy it, sounds like a good investment for you.

The building now has windows and they are new. You are not teaching me anything. You're just making a fool of yourself. No need to reply, as I won't be reading this thread again. Good luck with your silly comments. Not a good investment, so not sure why you think I'd be interested.

People like you will read this thread again, because you are a fool and love to make silly comments. Live and learn.

[trogers]

Indeed sometimes it is interesting to just buy an old condo for the part of land that you will own. Especially in Bangkok land is expensive. Even 1/50th or 1/100th can be worth more than you think.

Kh Jean and TRogers

Once again an interesting perspective from you both,

I can only guess you are talking about the condo value rising on the back of the underlying land rising.

Suppose in future owners in the condo wanted to cash out by de-condoing and reverting to land to sell. Wouldn't one be faced with the situation typified under Napoleonic law in France.....where sales are so often held up because of the number of relatives owning small shares.....who can never all agree? Wouldn't it be the same with a condo where there would always be someone or several who wouldn't sell, or simply couldn't be found.....thus making the investment completely illiquid, essentially meaning a loss?

Obviously I am missing something as TR you have done it!

Cheeryble

Such a potential problem has already been faced and dealt with in Singapore and Hong Kong (Google "en-bloc sales"). My time frame for a potential sales of the land where I bought 2 condo units is 15 years from now, about 20 years after I had bought them. Such a time frame will make the building over 50 years old. All the units would have changed hands either through sales or inheritence. The original buyers/owners would not be around.

With Thailand entering AEC in a few years time, I would be surprise if similar laws in Singapore and Hong Kong will not be enacted to facilitate redevelopment of Bangkok and other major cities, when condos built in the 80s and 90s get old.

[MrRealDeal]

I wouldn't be a slum lord so I guess the answer is No ......

So I guess that if you did obtain a shabby place for free or extremely cheap then you would sell it instead of renting it out. That's still an OK decision, but what if you calculated that you could earn over 25% annual rental yield if you were to rent it out?

We own a street side syle buiding and just renoveated it for the next tenant it wont make us any extra , just did it because it was the right thing to do.

So it could be a matter of moral conscience or respectability. Possibly subconsciously you believed that it would be easier to find a new tenant, though in good locations that shouldn't be difficult anyway. But purely from a ROI point of view, spending money on something that does not provide any beneficial return is a waste. I guess it's a matter of perspective.

If ROI is the only reason you do things .... your whole life is a waste. If I obtained a shabby pleace I would revovate it a little period , the extra income is not worth not doing the right thing , not to mention it's nonsense to think not fixing it up has a better long term rate of return. And all that is not subconcious it's a decision based on doing the right thing insted of being a greedy D-Bag.

[Khun Jean]

The right thing, the right thing, bla bla. Should i now feel bad and change my ways when you say socialist crap like that?

It is all about ROI! Without that you would be out of the picture very quickly ending up being unable to do the right thing and wait for someone else to do the 'right thing' for you.

If you get a good feeling spending money that will not give a return your ROI is expressed in 'good feeling'.

Obviously that is not sustainable so there must be a pile of money somewhere. Or you are close to 'the end' and don't care.

The only reason i fix up a condo is because i want it to be in a good state for a long time and get a good price for it.

Now in my book that is 'the right thing' to do. Yep, it is the right thing for me!

Another 'right thing' is when a renter spends money to make the place better i don't charge more rent because i value keeping a renter that takes care more than a little more money what a Thai owner would typically do.

Those are all very selfish reasons. Taking care of my family, also the extended part, is my personal 'the right thing' and it involves education for the kids and emergency funds for sickness, never ever handouts.

[hyperdimension]

The only difference between an old shabby apt., condo or house and a new shabby one is PAINT!

I think the bathroom has a lot to do with it too. Old places may have stained / dirty, mouldy and even smelly bathrooms. How much would you guys spend on a bathroom makeover?

Edited September 22, 2012 by hyperdimension

[hyperdimension]

We own a street side syle buiding and just renoveated it for the next tenant it wont make us any extra , just did it because it was the right thing to do.

So it could be a matter of moral conscience or respectability. Possibly subconsciously you believed that it would be easier to find a new tenant, though in good locations that shouldn't be difficult anyway. But purely from a ROI point of view, spending money on something that does not provide any beneficial return is a waste. I guess it's a matter of perspective.

If ROI is the only reason you do things .... your whole life is a waste. If I obtained a shabby pleace I would revovate it a little period , the extra income is not worth not doing the right thing , not to mention it's nonsense to think not fixing it up has a better long term rate of return. And all that is not subconcious it's a decision based on doing the right thing insted of being a greedy D-Bag.

Most things that people do in life are to gain some kind of benefit, whether it be a financial or emotional (e.g. happiness) return. People do charity because it makes them feel good about themselves and to gain respect from others.

Business and charity generally do not mix as they contradict each other, but some businesses, particularly large companies, do it for marketing and public relations. Business, at its essential core, is about greed.

[Khun Jean]

A Bathroom gets the most attention. If you fixed that one good it can last a good time too. Spend a little more there. The whole condo can look nice but a shabby bathroom, ugh....

Removing the first 10-20 cm wood from the doorframe on the bottom and replace it with tile and take a good quality plastic door.

Wood is not your friend in Thailand.

Ceilings are another area where you can easily upgrade visually without too much cost. Get rid of foam, gypsym tiles with the metal frame in between.

Leave the frame if it is still strong and mount the big gypsum plates and make the whole ceiling smooth. Install some spotlights along the wall instead of that dreadfull fluorescent.

The floors are best with large tiles, at least 16" or better with narrow grout lines. The grout lines always get dirty and are a pain to clean.

And when you have Thai people do the job let them do it in step, first ceiling, then walls and door/window frames, paint everything and when everything looks fine in goes the floor.

If you give the whole order in one time you get 6 people that will do everything at the same moment walking in the way of each other and ruining each others work.

One easy way of increasing living space it to remove the door from the balcony and install windows on the balcony frame. It is also a good place to install a airconditioner or place a small kitchen cabinet which is almost never thought of by the architects.

A balcony seems nice but in practice it is often too hot and in Bangkok the air is also not particular clean. Better give that space some better use.

Above is what my 'routine' is when upgrading a condo.

[how241]

The only difference between an old shabby apt., condo or house and a new shabby one is PAINT! Go and watch a new home or building being built and you will see that before it is patched and painted, you can't tell if it was built 20 years ago or yesterday. The "new" bright purple 20 story-plus hotel next to Surasak BTS is a great example. It was ready to fall down years ago, and over the last 8 months, they patched and painted it, and now it's "new".

A "new" place will have cracks after 5 years, and a patched and painted place will have cracks after 5 years, up to you.

Paint is the cheapest and most cost-effective for remodeling.

[cheeryble]

Insist to the contractor(s) that no cement or tile cement is washed down the condo drains, but cement is made and washed up outside. Better still block off the drains with cloth and cut off the water, or you will be replacing drainage pipe in the condo below before long.

BTW anyone....is it true there are no "swept bends" available in plastic drain pipe. All I can ever find is elbows, which are much sharper and do not "swish" debris away. The blockages always happen just behind these damned elbows!

Edited September 23, 2012 by cheeryble