How Much's A Shophouse In Chiang Mai?

[rishi]

Hi,

Does anyone here have an idea how much a reasonable asking prize for a 4 storey shophouse in Central Chiang Mai would be ?

I'm specifically interested in one particular. The building is in pretty good condition (I should know, because I've lived there 1 1/2 year). The building occupies about 4 x 12 m.

It's located in Chiang mai old city (inside the moats). I wouldn't call it a mainstreet location - its rather about 50 meter down one of the sidestreets.

Sofar we've rented the place (100,000 a year), but now the landlord wants to sell and is asking 3,000,000. Does that sound as a reasonable (non-negotiated) asking prize.

Edited March 31, 2006 by rishi

[lamphun]

You might want to ask yourself how much the actual land is worth. The building itself probably doesn't have any real value. Check out the price of land and add a bit.

[Farma]

Can’t help you on the price to pay but would suggest you look at whether the land is freehold or leasehold.

In some cities the CBD land is owned by a charity, Govt. department etc and you lease the land the building is on. I’ve come across lease periods of 3 – 30 years. The yearly lease figures on renegotiated land range from 1,000B a year upwards.

The price you mentioned suggests you will be purchasing a shophouse on leased land.

If this is the case with your building, you will be buying the building and the remaining lease time then renegotiating a new land lease when it expires.

Hope this helps

Farma

[rishi]

Thank you both, for reminding me to focus on the land and its character. That made me tell my wife, to call the landlord and ask whether the land, the shophouse sits on, is included in his offer. He was a bit surpriced we asked - of course it is. (He's a well-to-do and honest businessman of the old school, but he is a businessman).

No doubt it is a "real" chanote tittle deed that comes along. When we rented the place we got a copy of a document, my lawyer recognised as a proper chanote, bearing the landlords name as the last entry.

I've just spend a couple of hours searching the web for brokers, having commercial buildings in central Chiang Mai for sale. Very few for sale (not a bad sign). Based on the few I've found (way too few to count as statistically reliable) - it seem that the "average" going price of that kind of building and quality, located within CM moats, would range from 2.5 - 3.5 M and a chanote for land that size (66.4 sqm) would range from 0.5 - 1.0 M.

So, it does seem that the landlord's asking prize isn't too far off, but I still wouldn't mind some input that might help me getting a bit closer to whether I should just accept right away or negotiate (which might mean missing out on a good opportunity).

[Farma]

Here are a couple of recent examples from another regional city. Both were in the central business district.

Large shop with 13 years land lease. Asking price 6.5 Mil. Sold for 5.6 Mil.

The sellers initially said the price was non negotiable.

New Shophouse 4 x 12 Meters, 3 year land lease. Asking price 1.8 Mil. Sold for 1.6 Mil.

The fact the land will be yours is a bonus. The price sounds around the right price from your research. Maybe your wife can make a few inquiries in the neighborhood on local prices just to confirm them.

If you are happy with making an offer maybe your wife can talk to the owner and see if he would be prepared to negotiate the price. He will let you know. Negotiation is always part of business. The rest is up to you.

A good opportunity like you mention would be very hard to pass.

[mickmac]

Hi Rishi, you may want to check this site out:-http://www.chiangmaihouse.com

There are a couple of commercial shophouses for sale there. In the residential homes are there are a couple of places similar to the shophouses, for abot 3.7 and 3.9 million Baht.

I hope this helps.

[rishi]

Thanks. The site had a 3-storey shophouse with same horizontal dimension for sale within the moats - quite similiar, but different - and at a asking prize of 2.3 million.

I had no problem finding the place by means of the photos. Compairing its rather poor shape, missing storey and its a bit poorer location for doing tourist oriented business - I'd say my landlord's offer is fair (nothing more and nothing less).

[Sophon]

Hi,

Does anyone here have an idea how much a reasonable asking prize for a 4 storey shophouse in Central Chiang Mai would be ?

I'm specifically interested in one particular. The building is in pretty good condition (I should know, because I've lived there 1 1/2 year). The building occupies about 4 x 12 m.

It's located in Chiang mai old city (inside the moats). I wouldn't call it a mainstreet location - its rather about 50 meter down one of the sidestreets.

Sofar we've rented the place (100,000 a year), but now the landlord wants to sell and is asking 3,000,000. Does that sound as a reasonable (non-negotiated) asking prize.

I have no idea whether the asking price is reasonable or not, but there seems to be a discrepancy between the rental and asking price.

Normally the monthly rental price on a property in Thailand seems to lie somewhere between 0.5 and 1 percent of the value of the property. With the current rental price of 100,000 a year that would equal a property value of between 850,000 and 1,700,000. Which would either make the asking price too high or your current rent very favourable.

Sophon

[chuchok]

This is another handy site to check on asking prices.There are 56 shophouses listed for sale &/or rent in Chiang Mai.

professionals/Chiangmai

Edited April 2, 2006 by chuchok

[ToTheBeach]

Which would either make the asking price too high or your current rent very favourable.

Sophon

I would suggest that your present rental price is favourable. If you can keep that rent so low I would never think about buying the property. Hope you can get a lengthy contract or a good option.

[rishi]

Exellent site, chuchok, 56 shophouses in Chiang may city, all with photo and close to accurate location-details (very few within the moats, however). I'm convinced that 3 million is fair - give or take 1-200 k's.

Yes, I'd prefer just to keep on renting, but I have only two choices - buy or move within 3 months. None of those about 60 other places appeals more to me and my kind of business, than this place.

Who knows, it might actually be to the better to own the place. Unless things changes dramatically prizes aren't likely to go down and it won't be hard to sell the place later on. In the 1 1/2 year we've been living here, each month has brought 1-2 people into our shop, asking questions that only potential buyers would ask (don't know how well we convinced them that the landlord didn't want to sell).