Should This Yank Buy A Villa?

[stinkey turner]

Hi All,

I know you veterans on these boards are probably really (really!) sick of seeing posts like mine, so for that I really apologize in advance (I was actually looking for an faq that might help, but to no avail, so any help you can provide would be sincerely appreciated).

So here' s my deal. I'm 40 years old living in San Francisco, CA. My wife and I are both gainfully employed. (I'm not married to Thai). We recently spent a couple of months touring SE Asia Vietnam/Thailand (second time) and my wife and I are in love with the culture, weather, tropical beauty and general kindness of the people. We have also been "house shopping" in SF and to be honest, after looking what type of house we want, we really don't want to indebt ourselves in a >$1 million dollar mortgage(not to speak of the property tax increase!) to finance a new house. So, our issue is, I'm sort of at a "pivot point" in my life, where, maybe I keep my same, small, older house, and use some of those funds I would of used to upgrade, to buy a nice Villa in Thailand that I would use for vacations and eventually for retirement.

I really wanted to draw the opinions of some expats here on if I should pursue what some would simply just call a mid life crisis and tell me to sod off and get back to work.

- Since Vietnam is out of the question due to lack of foreign "ownership" rights, Thailand comes to the top of our list. After much research on the internet, and seeing wonderful villas for the price that won't buy you a backyard storage shed in San Francisco, we felt that it "seems" like a great idea!

-So understanding a bit about our motivations, my questions follow.

-What can anyone say about the Khoa Lok area(other than I know they were hit severely by the tsunami) . There is a new residence area going up that seems a great deal. www.saiyoi.com. I am wondering if anyone has been through there and had opinions on the town/amenities, etc. Healthcare? The future development, etc.

-As much as I love Thai culture, I will be honest and understand that I know I will relish the company of other western expats from time to time to socialize with, etc. Can someone suggest areas were a healthy balance of local culture, expats, activities, and decent Villa deals meet that I might not have considered (I've considered Samui, PhanGan, Pattaya, Phuket, and even Udon Thani). My wife is especially into the green/lush tropical surroundings.

-Something tells me I am kidding myself when I say that buying a villa in Thailand is an "investment"? Any thoughts on this. I remember seeing one poster say, that, "if you can't afford to walk away after 30 years(when your lease expires) , don't bother." I can accept (and plan for) this.

-Short of financing with outright cash(not realistic for me) , is dipping into the HELOC (i.e. second mortgage) to finance a villa a good option? Are most expats using some sort of financing? or are they free and clear through cash?

-Is it pretty much recommended that any deal be done with a lawyer and how hard is it t find one that works for the buyers best interest?

-Finally, what other advice, if any, can anyone offer that I should consider, either pro/con,about making one of the more important financial decisions in my life?

Sorry for all the questions, and I really appreciate any feedback. Feel free to flame away as well, like I said, I know these questions can be repetitious and frustrating to see all the time.

Cheers,

Mike

Edited April 14, 2006 by stinkey turner

[think_too_mut]

- Since Vietnam is out of the question due to lack of foreign "ownership" rights, Thailand comes to the top of our list. After much research on the internet, and seeing wonderful villas for the price that won't buy you a backyard storage shed in San Francisco, we felt that it "seems" like a great idea!

Did you see somewhere that ownership rights are on your side in Thailand? You can't own land in Thailand.

There are workarounds with forming a company or buying into a Thai name than leasing it back for 30 years but I would not really go that way.

Also, I am finding houses in that area are at similar prices as in tropical Queensland of Australia where ownershop rights are sorted out.

This site is an example, hundreds of them do the same business. The prices are un A$, take off 25% and u get in US$.

http://www.plantationhomes.com.au/content/

Edited April 14, 2006 by think_too_mut

[stinkey turner]

- Since Vietnam is out of the question due to lack of foreign "ownership" rights, Thailand comes to the top of our list. After much research on the internet, and seeing wonderful villas for the price that won't buy you a backyard storage shed in San Francisco, we felt that it "seems" like a great idea!

Did you see somewhere that ownership rights are on your side in Thailand? You can't own land in Thailand.

There are workarounds with forming a company or buying into a Thai name than leasing it back for 30 years but I would not really go that way.

Also, I am finding houses in that area are at similar prices as in tropical Queensland of Australia where ownershop rights are sorted out.

You are correct. This is why I put "ownership" in quotes. But as far as leasing, I'm pretty sure that is out of the questions in Vietnam.

-Now a tropical Autralia is not that bad of idea! (But I always assumed Australia was lower than the 23 degrees tat "defines" tropical?).

Edited April 14, 2006 by stinkey turner

[think_too_mut]

It's a big piece of real estate down there. Cairns and up are tropical.

Check this place, not only comparable to Thailand, in some sense (infrastructure) is even better.

http://www.pddt.com.au

[Thaiquila]

You have to have a quite hefty retirement pension to get retirement visa rights in Australia.

If total ownership is a concern, have you considered a higher end condo in Thailand?

[GuestHouse]

As always, I give this advice as if it were answering a general question that anyone might ask, I say this because firstly others may read this as a guide to their own thinking and secondly because I do not want the comments I make to be considered a judgment on the person asking the question.

If you were single, I’d say go for it.

As you are married, and your wife is not Thai, I’d say look into all the implications for both of you.

The advice often given is, do not invest in Thailand that which you cannot afford to loose. The reason for that is lack of rights and protections foreigners have in Thailand. That is something for you both to consider.

Likewise and moreso, a married woman who is not herself Thai, but who’s husband is moving a substantial share of their marital wealth to Thailand (Off shore in general) needs to think very carefully about the rights she is loosing.

The risks to a western women moving to Thailand with her husband and life's savings are not to be ignored. (That is not a judgement, but an observation)

My personal advice would be that at 40 years old, and on the assumption that you are not going to give up life in the US and move to America right now, I’d put my money elsewhere. Probably into property back home or at least into something you can keep an eye on and for which you enjoy the protections of your own legal system.

As an investment, property in Thailand that you do not occupy yourself, strikes me as a Risk. Money invested elsewhere with less risk can do a lot better.

I’d also observe influences are passing elsewhere in the world - Cuba’s not long off being opened back up again!

(Mod: Samran - edit to this post 15/4)

Edited April 15, 2006 by samran

[nganadeeleg]

- Since Vietnam is out of the question due to lack of foreign "ownership" rights, Thailand comes to the top of our list. After much research on the internet, and seeing wonderful villas for the price that won't buy you a backyard storage shed in San Francisco, we felt that it "seems" like a great idea!

Did you see somewhere that ownership rights are on your side in Thailand? You can't own land in Thailand.

There are workarounds with forming a company or buying into a Thai name than leasing it back for 30 years but I would not really go that way.

Also, I am finding houses in that area are at similar prices as in tropical Queensland of Australia where ownershop rights are sorted out.

This site is an example, hundreds of them do the same business. The prices are un A$, take off 25% and u get in US$.

http://www.plantationhomes.com.au/content/

Sorry to spoil the party, but I think that site is for building a house only, and does not include the land.

As far as investing in Thailand goes, I think the rule of thumb is to 'only invest what you can afford to lose'

[think_too_mut]

Sorry to spoil the party, but I think that site is for building a house only, and does not include the land.

As far as investing in Thailand goes, I think the rule of thumb is to 'only invest what you can afford to lose'

True, no land is included. But you can buy it, in your name.

If it is acceptable to say someone lives in a beach resort of Pattaya while the house is north of or along Sukhumvit, that distance would be 50-100K A$ for a block.

A walking distance to the water would be 150-200K A$ for a prepared and designated residental area. Sure, it can go higher, depending on factors.

Not saying Thailand is not the place but there are others and, when compared, may be competitive. Thailand is not necessarily the only affordable place, especially when looked at from San Francisco.

[stinkey turner]

Thanks for the advice so far. I am still researching my options. Part of me wants to bite the bullet in order to have that nice retirement home in a great locataion. But obviously, there are probably better investments out there that Thailand as well.

You guys have given me more to think about.

Thanks!

mike

[Heng]

Keep your home in both countries. My folks keep their home rented out on 1 year leases in Texas, provides a bit of income and a place to live if necessary. Myself I keep a condo semi-mothballed/plug-and-play for going back once or twice a year to recharge on whatever the LOS is lacking.

Consider it a partial hedge for many of life's uncertainties. And that's advice from a local.

[KhunPadThai]

I can't imagine why anyone not living there would buy a vacation house in Thailand. It's too far to visit very often during the year. You have all the ownership restrictions and risky workarounds particular to Thailand. Plus the risks of owning and managing au unoccupied property far away from your watchful eyes. And this is in a country in which you do not have a legal right to reside. And where's the upside? Property doesn't appreciate much or all in most places. The market for "used" homes in Thailand is weak. For the few times of the year that you could visit, it would be cheaper to stay in a first-class hotel and have zero risk or hassle.

Here's a nice looking house in Chiang Mai for sale at about $88,000. I have been looking at the web listing from time to time since it went on the market in November, 2004!

http://www.satihoga.com/Ad_HSNT_0001.htm

This house will probably still be available when we are ready to retire there in about five years.

Frankly I can hardly imagine a worse "investment." Souds like a foolish consolation for not being able to buy in the hyper-inflated Bay area market.

Khun Pad Thai

[think_too_mut]

I can't imagine why anyone not living there would buy a vacation house in Thailand. It's too far to visit very often during the year. You have all the ownership restrictions and risky workarounds particular to Thailand. Plus the risks of owning and managing au unoccupied property far away from your watchful eyes. And this is in a country in which you do not have a legal right to reside. And where's the upside? Property doesn't appreciate much or all in most places. The market for "used" homes in Thailand is weak. For the few times of the year that you could visit, it would be cheaper to stay in a first-class hotel and have zero risk or hassle.

Here's a nice looking house in Chiang Mai for sale at about $88,000. I have been looking at the web listing from time to time since it went on the market in November, 2004!

http://www.satihoga.com/Ad_HSNT_0001.htm

This house will probably still be available when we are ready to retire there in about five years.

Frankly I can hardly imagine a worse "investment." Souds like a foolish consolation for not being able to buy in the hyper-inflated Bay area market.

Khun Pad Thai

That's what I thought. No resale at all, let alone the value.

A chunky house in my neigbourhood upcountry ws 1.2 mil then 800k, then 600K, then the owners elected to reoccupy it.

Tens of thousands apartmenst in BKK are for sale, nobody wants them. It's just Thais menthality that does not let them go for what their property is worth - 200-300US$ psqm.

Some real estate agents who are not on the board any more tried to make a buck off that, nothing. No wonder they disappeared.

Might look and feel the farangs are not that foolish any more. A good sign, me thinks.

[Thaipwriter]

Rent.

Dont buy.

Retain your house in USA.

If you buy a house here there are zero chances of resale. on paper your home might be "worth" 3 million baht or whatever. But you will find no buyers for used property here. Forget about "appreciation" , supply outstrips demand.

renting is by far the best option in Thailand. end of story.

[stinkey turner]

Rent.

Dont buy.

Retain your house in USA.

If you buy a house here there are zero chances of resale. on paper your home might be "worth" 3 million baht or whatever. But you will find no buyers for used property here. Forget about "appreciation" , supply outstrips demand.

renting is by far the best option in Thailand. end of story.

This is great info! Thanks. Renting definately sound like the way to go.

[highonthai]

There is nothing like owning your own home anywhere. I did not buy my home in CM for an investment, I bought it because I wanted it.

I read sooo many posts of negativity towards property ownership in Thailand and the "Never spend more than you can afford to lose" saying. I know allot of foreign home owners here and never met anyone one that is unhappy with their decision to purchase. But there are tons of posts of rentals woes posted here.I'm actually thinking about buying my first rental property.

Good luck on whatever path you take.

[jdinasia]

OK .... here ya go .....

Not an option you looked at but one worth a thought anyways.

Keep your place ... then start looking at buying a second place as a rental. The thing about the property values in the US is that they keep going up!

You can visit Thailand as often as you want and save a ton of money by not owning. Just rent a place for your stay and then the next stay rent a different one. Lots of good points to this ... first you can spend years looking for a place you WANT to retire in ... try a month in Hua Hin ... didn't like it? next trip try Krabi .... didn't like it? etc

Find a place you DO like? Lots of ways to start setting up a perm abode here that would give you some flexibility ... Long term lease on land (with option to renew) and you could be good for a LONG time!

[Thaipwriter]

There is nothing like owning your own home anywhere. I did not buy my home in CM for an investment, I bought it because I wanted it.

I read sooo many posts of negativity towards property ownership in Thailand and the "Never spend more than you can afford to lose" saying. I know allot of foreign home owners here and never met anyone one that is unhappy with their decision to purchase. But there are tons of posts of rentals woes posted here.I'm actually thinking about buying my first rental property.

Good luck on whatever path you take.

condo aside, you dont own the land the home sits on. the bricks are yours.

Talk to the guys who are trying to sell thier houses, they are the ones who are unhappy. the guys who bought may not be able to sell if they wanted to.

I have never seen a rental woe story on here, can you please post a link to one. my memory must be going.

One of the biggest problems with home ownership here are factors outside your control. Your "new" neighbours for example. If they play loud music or play guitar at 2 am whilst drinking whisky or they have noisy dogs you have real problems. Thai's do not move around like westerners, if a Thai bys a house they stay until they die or are evicted...whichever comes first.

Noisy neighbours will prevent a sale of your house and as a result you are stuck with it!!!

Rental is the best option, just a taxi ride away from any problems

[Bruce1]

Initially I looked at buying when we moved here and decided against it. Foreigners can't buy more than 49% of the land, or in apartments more than 49 % of the apartments, so there's legal trickeries to worry about.

Plus, there's a glut of places for rent. Its a renters market. I know a freestanding 3 bed two storey house with a garden and lots of space for rent in a security estate in Nakhon Pathom for just 6500 baht a month. How cheap is that?

If you just rent for periods, you can try a different place each time.

Keep your US property and money invested there. Hassle-free.

Spend some of the income on renting here.

Keep it simple. That's my advice, for what it's worth...

[tornado40]

Initially I looked at buying when we moved here and decided against it. Foreigners can't buy more than 49% of the land, or in apartments more than 49 % of the apartments, so there's legal trickeries to worry about.

Plus, there's a glut of places for rent. Its a renters market. I know a freestanding 3 bed two storey house with a garden and lots of space for rent in a security estate in Nakhon Pathom for just 6500 baht a month. How cheap is that?

If you just rent for periods, you can try a different place each time.

Keep your US property and money invested there. Hassle-free.

Spend some of the income on renting here.

Keep it simple. That's my advice, for what it's worth...

[tornado40]

Ok - 1st time I have posted - so now to continue!

I purchased a property in Samui in 2003 for 1.75m to future retirement plans. I'm single at 46yrs old and have been visiting LOS for some 10 years.

Usually visit around 3-4 times a year and feel that this has been a good investment.

I have gone down the company route with lease back - and pay taxes (1st time this May). Sometimes when I read the negative comments re purchasing I wonder if I have done the right thing - but still support the idea of purchase for retirement living

[Heng]

There is nothing like owning your own home anywhere. I did not buy my home in CM for an investment, I bought it because I wanted it.

I read sooo many posts of negativity towards property ownership in Thailand and the "Never spend more than you can afford to lose" saying.

I suspect it's less because of altruism and more like those negative folks not wanting to be the last renters on the block.

There is a huge variety in prices, with the lower end condos costing less than basic model Accords or Camrys (you'll note that you'll often get the same negative folks saying you shouldn't buy a car either), ...there's something for everyone.

[Thaipwriter]

you'll note that you'll often get the same negative folks saying you shouldn't buy a car either

With car ownership 100% in the name of any farang car ownership is perfectly safe.

I have never heard any farang say anything negative about car ownership, the vast majority know that it is as easy as falling of a Pattaya balcony to register car in your own name here in Thailand.

Perhaps you could provide a link on this forum to any person who has ever offered negative advice about car ownership?

For the benefit of those less well informed, Heng is actively involved in property development so he has a vested interest in playing down the nationalistic laws here that make property ownership such a headache for the average farang in Thailand.

[RAZZELL]

Do your research first. Find an "up-and-coming" area.

I'm sure anyone who bought land or property in Koh Samui 15 or 20 years ago, or even Koh Chang just a few years ago is sitting on a tidy "paper" profit.

Good luck in your quest.

[Heng]

you'll note that you'll often get the same negative folks saying you shouldn't buy a car either

With car ownership 100% in the name of any farang car ownership is perfectly safe.

I have never heard any farang say anything negative about car ownership, the vast majority know that it is as easy as falling of a Pattaya balcony to register car in your own name here in Thailand.

Perhaps you could provide a link on this forum to any person who has ever offered negative advice about car ownership?

For the benefit of those less well informed, Heng is actively involved in property development so he has a vested interest in playing down the nationalistic laws here that make property ownership such a headache for the average farang in Thailand.

I won't bother, but I'm sure the theme of "why would anyone want to own a car when there are taxi's everywhere" might be familiar to some on this board.

And I'm not playing down anything. My advice has always been towards the safer option of condominium ownership for foreigners, as opposed to home ownership. And no, we're not developing condos. We have one single housing development that I don't even have a direct stake in. For the benefit of the less well informed, I also am actively involved in renting out various properties as well. So feel free to deposit your funds in the family's rental or property sales coffers.... it's irrelevant to my opinion/suspicion:

"I suspect it's less because of altruism and more like those negative folks not wanting to be the last renters on the block."

[Jolly_Roger13]

you'll note that you'll often get the same negative folks saying you shouldn't buy a car either

With car ownership 100% in the name of any farang car ownership is perfectly safe.

I have never heard any farang say anything negative about car ownership, the vast majority know that it is as easy as falling of a Pattaya balcony to register car in your own name here in Thailand.

Perhaps you could provide a link on this forum to any person who has ever offered negative advice about car ownership?

For the benefit of those less well informed, Heng is actively involved in property development so he has a vested interest in playing down the nationalistic laws here that make property ownership such a headache for the average farang in Thailand.

I was planning on selling my house in the States too, and buying a home in Thailand. But, keeping a house in the States seem like a good idea now. Looking for a high-end condo or leasing a nicely equipped home in Phuket or Ko Samui or Chang Mai might be better then to be tied down with " life's uncertainties" about the future.....

[stinkey turner]

One of my thoughts initially was that, since I am "only" 40, I won't be retiring to Thailand anytime soon. Maybe 10 to 15 years away. So the thought of "buy" low, was the apealing aspect to buying now and then trying to rent out until I would move. Maybe vacationing there as well.

I am worried that the prices will inflate during that time making it less possible to find a "deal". (Of course a lot of other things can happen in this time frame as well! Maybe laws or politcal events change).

-I am not adverse to renting though. It essentially seems as if one is renting as long as the land is a lease anyway.

[Thaiquila]

Hey, life is a risk in any country.

If you are 40 and you bought a condo now, and it was a good one, and prices did indeed rise, and if you did move to Thailand for your retirement years, you would be doing well. If, if, if.

You could say the same thing about buying a condo in Panama City, Florida.

[tornado40]

ST - I still think that you have the right idea. If you feel that this is the place for you in the long term - then perhaps do take the advice given sometimes on this forum and don't spend more than you can afford to lose.

I'm not looking to make money on the house - its just that I won't have to pay whatever the cost maybe in say 5 years time - so 10-15 who knows - just look at Spain for expats of the UK!

Interestingly - knowing that my place is there - helps me cope with the harsh living in the UK

[stinkey turner]

ST - I still think that you have the right idea. If you feel that this is the place for you in the long term - then perhaps do take the advice given sometimes on this forum and don't spend more than you can afford to lose.

I'm not looking to make money on the house - its just that I won't have to pay whatever the cost maybe in say 5 years time - so 10-15 who knows - just look at Spain for expats of the UK!

Interestingly - knowing that my place is there - helps me cope with the harsh living in the UK

Tornado,

You have a point there. Look what the English did to Marbella and Mallaga. Just kidding.

Seriously though, did expats really drive up the price of homes in those areas? This is in part, my concern about LOS.

What area is your place in? I'm also trying to decide if there are places I haven't considered yet.

-I keep telling my wife that we need to take a quick "fact finding" mission sometime in the next few weeks, (and if for nothing else, as a quick holiday). But knowing me, I am weary of my own impulsive nature and I really need to force myself to do my research so I don't make a mistake entering into a lease I might regret.

[tornado40]

ST - My parents moved to Spain 10 years ago - they live in a mobile home. Had they bought a house, then £100k would now be £250k. As it is - the mobile home is worth very little

In 2003 - I went to Samui for the 1st time - since 3-4 times a year - bought the house on the 2nd day there, and its doubled in 'paper' value

I'm just going to hold on to it - this is my situation however any information is good when making interesting decisions