Snake on side of road On Nut

[soi41]

Ofcourse there is no general answer to that question. So the situation is, my wife wants to buy another rental house (have one already), we can afford the downpayment, will no doubt get a mortgage. And probably on a 10 year mortgage, the rentalincome will cover most of the payments to the bank. So far so good, but as being 60 years old, the idea of getting my money back in 10 years time, is not very appealing to me. Like to have a lumpsum sitting in a bankaccount or on SET, easy to access in case of emergency. My wife is 40 and ofcourse her POV is a different one. No trust-issues whatsoever, we have houses and landplots already, and no sleepless nights! As for the downpayment it will be a 50/50 from both of us. So do I have a point, or am I just being egoistic ??

[jamescollister]

If you are 60 and have have enough to live for the rest of your life, why gamble, enjoy. If you have kids and are preparing for their life, different story. Jim

[falkan]

she want to use you as long as you are alive, smart girl

[Rancid]

Real estate is in my opinion in the mania phase of a boom, if this were the west then the bust will soon follow, Thailand works a bit differently though. However you wouldn't be posting if this wasn't stressing you, as such don't do it as you have already answered your own question.

[BlackPuddingBertha]

I am nearly 60. I am single and intend to remain so. I have a lot of money sitting in various (Western) banks earning just under 5% tax-free, fully insured, and a fair bit in (Western) stockmarkets earning about 3% in dividends plus possible capital appreciation, and a few million Baht in Thai banks earning about 3%.

The idea of putting money into property as an investment in my situation is completely alien to me. I can see no point at all in doing so. I can see even less point in doing so in Thailand. I dont even own the condo I live in as I'm paying under 4% of its selling price as rent, so what's the point in buying it?

Edited December 15, 2012 by BlackPuddingBertha

[USNret]

My wife & I have the same age differential as you and yours although I am about a decade younger than you. My hope & expectation is to provide for her even after I'm gone. The good news is, she will get U.S. social security when she turns 65 (or 60, I forget) so if I'm gone before she reaches that age then I need to provide for that "gap" until her pension payments start coming. I have a military pension that ends the day I die.

In this regard, I need to get more creative with my investments. My opinion is, you are not too old for this. I would hope she would bear the burden of being landlord & agent so it won't complicate your life. I've been a landlord before (not in Thailand) and I wouldn't relish getting into that again at age 60.

[bushwacker]

A financial planner would tell you that at your age, it is extremely important to have a significant nest egg available for the unexpected, like emergency medical issues. Having money in property does not fulfill this nest egg requirement. I would suggest that this purchase can go forward only after you have met the emergency requirement. Money in the SET also does not count. Although you can take it out at any time, there is always a timing issue. If the market is down or soft then you may be forced to take the money out at a loss. The nest egg needs to be in a liquid form and 100% protected (well as close to this as possible.) As you get older the size of the nest egg needs to increase as does your personal risk.

From my personal observations the Thai real estate market is not very liquid. Thai's especially do not like to buy second hand houses.

Also, I am not clear as to how you will get your money back in 10 years. If you pay half of the downpayment and the chanote is in her name then you have actually made a purchase like going to Big C. You have the satisfaction of looking at the property and saying that is mine ... but in reality it is all hers. If you are going to get your money back in 10 years that would infer that the house is then sold and you see the money come back to you with hopefully some profit. Good luck with that!

So my 2 baht says that you have put the cart before the horse. Emergency fund first before in essence giving any money away!

cheers

[jamescollister]

A financial planner would tell you that at your age, it is extremely important to have a significant nest egg available for the unexpected, like emergency medical issues. Having money in property does not fulfill this nest egg requirement. I would suggest that this purchase can go forward only after you have met the emergency requirement. Money in the SET also does not count. Although you can take it out at any time, there is always a timing issue. If the market is down or soft then you may be forced to take the money out at a loss. The nest egg needs to be in a liquid form and 100% protected (well as close to this as possible.) As you get older the size of the nest egg needs to increase as does your personal risk.

From my personal observations the Thai real estate market is not very liquid. Thai's especially do not like to buy second hand houses.

Also, I am not clear as to how you will get your money back in 10 years. If you pay half of the downpayment and the chanote is in her name then you have actually made a purchase like going to Big C. You have the satisfaction of looking at the property and saying that is mine ... but in reality it is all hers. If you are going to get your money back in 10 years that would infer that the house is then sold and you see the money come back to you with hopefully some profit. Good luck with that!

So my 2 baht says that you have put the cart before the horse. Emergency fund first before in essence giving any money away!

cheers

Have to agree on the house thing, Thais don't like second hand homes out my way, Issan. Probably get more for clear land than with a house on it. Chances are they would knock the old house down and build anew. That's just the way they think. You can look at bank repossession house sales, they can't get rid of second hand houses, they drop the price to cover clearing the old one away. TIT, Jim

[yoshiwara]

Are the mortgage payments less than 50% of an anticipated rental income? (assume 10 months occupancy)

[soi41]

Are the mortgage payments less than 50% of an anticipated rental income? (assume 10 months occupancy)

Downpayment 40% and mortgage 60%. With a 10 years mortgage the rentalincome should cover the monthly payments to the bank. (+- a few %). And I am not dreaming, the rentalhouse we have already, has been fully booked for 6 years and the new one is in the same area.

@ USNret and bushwacker. Thank you for some good posts, that made me think. As for the nesteggs I agree with you, but my part of the downpayment will only reduce the same "eggs" with around 12%, so I have decided to say yes to the second house. Considering that my wife has been the sole breadwinner for 10 years, I guess it is only fair, that I think about her future ? If I am lucky, I will live for another 20 years and be able to harvest from what we are planting now. If not, who cares?

So my question here really comes down to: At what age do you stop buying green bananas?

Thanks for your inputs

[SlyAnimal]

If you think it's a good investment, then invest.

You're old, but your wife isn't, she has a long life ahead of her, and I don't know your situation, or hers, regarding children, but it'd be good to have as much available for them as possible. Also you might live until you're 90 or 100, so it's good to be prepared.

As for worrying about keeping money available for you, talk to your bank. In NZ I have a revolving credit mortgage, whereby I can repay as much or as little each month, and even borrow more money if I want. It essentially works as a large overdraft. To set it up, you need either a very large deposit, or other property which you can put up as security, you have both. As with a revolving credit style mortgage, you decrease your interest by having all of your salary etc paying off the mortgage so that your interest is reduced, but you can still withdraw when you need it.

As imo it'd be silly to have money sitting in a bank account earning very minimal returns, when you could instead put it into what you see as a better investment, while still having access to funds if needed. Particularly as if you do go for the revolving credit style mortgage, you can still withdraw funds as you need for overseas travel or medical care etc if you want, so you're not limited at all really.

[CaptHaddock]

My wife & I have the same age differential as you and yours although I am about a decade younger than you. My hope & expectation is to provide for her even after I'm gone. The good news is, she will get U.S. social security when she turns 65 (or 60, I forget) so if I'm gone before she reaches that age then I need to provide for that "gap" until her pension payments start coming.

Is your wife a US citizen or has she lived in the US as your spouse for at least 5 years? Those are necessary qualifications for her to receive SS benefits on your account. The widow's benefit starts at age 60. At age 62 she can receive reduced benefits even if you are alive. Her Full Retirement Age at which she can draw benefits with no reduction is probably 66.

[BlackPuddingBertha]

As imo it'd be silly to have money sitting in a bank account earning very minimal returns, when you could instead put it into what you see as a better investment, ....

What you see and what you get may not be the same thing.

My bank deposits earn me more than the return my landlord is getting from the rent I pay him, based on the price he reckons he would sell for. And I am told that this selling price is less than what he actually paid for the unit some years ago. So I see little point in me "investing" in property under those conditions.

[tinfoilhat]

apparently Dec 22, will be too late.

i have just seen the weather forecast.