What's Wrong with Renting?

[mesquite]

It is a fact (except with ??? 10% of the condos one buys) that when you sell a condo, you will not make a profit ...10 years down the road. People who have sold their condos that have been honest with me have admitted to that. A couple owners broke even (not counting the monthly maintenance fee) and others have lost more. The problem in this country is that every one wants something new.... the older condo buildings start to show their "age" since there is no real maintenance made on the exterior or interior.... or after the condo building has been standing around, noisy bars, or other condo towers have been built to bloc the view. In the West, it is a different story, older condos or houses will retain their value, infact, increase. With the condo glut in Pattaya, don't expect any profit what so ever. Next, if you are an older guy...does it make since to buy a place when you may croak within 20 years? Rent out a nice place and party.

The condo culture in Pattaya is almost cult-like. No wonder there is a glut. Not buying a condo there seems like a badge of shame.

[cracker1]

Nothing's wrong with renting, in fact I believe it is by far the safest and most practical arrangement in Thailand. I have been doing this for more than 10 years on about three property's in Koh Samui and never a problem. Sometimes some minor maintenance issues must be dealt with by myself and there is never a problem if I wish to touch up some paint. These things never cost much and I would recommend it as against your suggestion of buying / building a house for your darling...............................unless of course you have been living continuously for more than five years.

[nimrod896]

If you are 40-45 and you plan to have a family here, owning makes sense and is quite necessary if you are married to a Thai women as it is expected that you will accumulate assets to ensure her future and that of the children if something happens to you. I hear stories all of the time about Thai men who die and leave nothing but a lot of debt. Generally, life insurance is not something that Thai's purchase. I came to Thailand with no intention of buying a home (buying is used because you cannot own a house and land; life tenancy is the best you can do).

On the financial side owning makes no sense at all. I rent a 3bd,2b in a large Moo Ban with a nice 25 m pool and well maintained roads and grounds for 8500 Bt a month including air con. A tiny lot in the same Moo Ban would be 1 million and another 2 million to build the house. Plus Thai banks limit the term of the mortgage depending on your age and the age of your wife. I rent on two year leases and so far the rent has not gone up. Thais do not like pre-owned houses because of superstition about ghosts, etc. but that does not make them cheaper than building.

New to posting on forum, now living in central Pattaya. Renting here is far more expensive than that quoted by Balance. Would I be right in thinking that price would be for some where outside of CM? You don't get much of a 3bd,2b down this end at 8500 Bt. At 74 yrs old I think the best way for me is to continue renting but maybe in a better area!

[mamypoko]

Mesquite (Texas?)...great topic! For the last few years I've been renting a place that my wife loves and I can live in (read park bench)...the replies generated have been so helpful but still leave me wondering...

Here where I live it makes zero financial sense to buy EXCEPT we constantly fear the landlord will someday sweep in and give us 30 days to vacate (this has not happened for 4+ years). Sure we could pick up and move or even counter by buying the place outright but I'd have to explain that to our pets my two kitty daughters who got their raisins here. I suppose my question is, is there such a thing as long-term lease in LOS?

Bueller

[LivinLOS]

And what about doing modifications to the property...

Most of the stuff coming with rental property is crap or average. Kitchen appliances... crap. bathrooms... crap. insulation... crap. windows... crap.

If one wants something good, one has to buy or pay a hideous amount of money to achieve the same.

This I fully agree with.. and why I will now build..

But..

Small and low standard places are ok to rent (cost about 4 to 5%) , but a nice house costs about 7 to 9%, I calculated that if renting, one pays off the whole current sale price in only 10 to 14 years of time. So if one stays 30 years, that's the same as paying the property, twice, and I don't count compounded interest which would probably pay another round.

Renting is financially ruinous if renting something nice - unless settling for something under your standard.

If your making 8 or 9% easy without high risk on your assets then its a zero cost rather than the loss presented.. Everyone that says renting is dead money doesnt seem to look at the time value of money.

[LivinLOS]

555+ all the cheap charlies renters...

Anywhere I have stayed more than 6 months I bought the place and I now have rental money of many condos that I could easily sell with a profit.

Renters I love you !

Again time value of money.. For many years I did 30% per annum on my nestegg.. One year almost 80%..

When I came here I barely had enough for one decent seaview villa.. If my money had gone on the home I rented (and everyone though I was crazy to lease a place at that much monthly) I would never had made the money.

Also, don't you get bored to leave and move everytime a landlord ask you to leave ? But maybe you have nothing else to do in your life ?

But I'm sorry, I'm too busy and leave a place when I DECIDE, not anybody else...

No landlord has ever asked me to move on.. Maybe luck but still..

I currently rent a place the landlord wants 10 mil for (down from 14) for 28k a month.. If its purely about the money.. Theres no contest here renting rules. For me tho, now its not about the money, its about the standards.

[sandhurstmolonski]

Absolutely Nothing Wrong with Renting .

I have been Involved in property for Many Many Years ..Why would you possibly Buy ? ..Owners Corp on Condo's excessive , often about the Rent PA .

Will this be some incredible investment ? = Highly Highly Unlikely ..Ok ..Lifestyle = Is his the Only option available in this Location ? = Virtually Never

Now , throw in the element of the Stupid Farang , allowing the Thai Wife to control Ownership !! Arrrghh ..Beyond Crazy , no matter how lovely she may be .

Invest in alternate avenues where you are Compfortable ..In Thailand ..Pure and simple --PAY RENT ..many many many Wonderful options . Make sure while you are participating that you are not paying Farang Tax .

In Thailand Always Rent .

[Cuban]

With renting you are often limited from carrying out any home "improvement" either by the contract or you can't take that investment away with you.

With renting you will forever be living by the rules of another, be it limitations of smoking inside 'your home' or owning certain pets or painting the walls a particular color.

With house and land ownership yes you might have 'bad' neighbors but choosing the right place for home and dealing with other people is part of living in a community, if you are running away from people all the time you will only know packing and unpacking boxes yet never know the feeling of coming home.

It's the natural order of things that we grow old amass stuff and die, it's nice to be able to leave a house to someone you care for rather than a monthly payment and so many days to vacate your belongings.

At least you still have the boxes to hand from your last move.

[Robert2006]

It depends on your financial position. Owning property is a nice place to store wealth. If you don’t have a lot of excess money then you probably have never contemplated that thought. What to do with your money? Bonds, stocks, precious metals, art, real estate all offer a place to store wealth.

Renting in some properties could be a problem but in better developments you don’t have much to worry about, the people are respectful of one another.

[mamypoko]

With renting you are often limited from carrying out any home "improvement" either by the contract or you can't take that investment away with you.

With renting you will forever be living by the rules of another, be it limitations of smoking inside 'your home' or owning certain pets or painting the walls a particular color.

With house and land ownership yes you might have 'bad' neighbors but choosing the right place for home and dealing with other people is part of living in a community, if you are running away from people all the time you will only know packing and unpacking boxes yet never know the feeling of coming home.

It's the natural order of things that we grow old amass stuff and die, it's nice to be able to leave a house to someone you care for rather than a monthly payment and so many days to vacate your belongings.

At least you still have the boxes to hand from your last move.

Brother/Sister...come on...I followed everything you wrote Except 'natural order'...I'm really wanting to know about a long term lease cause in many cases here in LOS one would be foolish to dump a wad of cash where monthly trickles will do.

natural order smacks of doo doo....no dig on you. I really want to know.

Edited August 23, 2013 by mamypoko

[manarak]

Small and low standard places are ok to rent (cost about 4 to 5%) , but a nice house costs about 7 to 9%, I calculated that if renting, one pays off the whole current sale price in only 10 to 14 years of time. So if one stays 30 years, that's the same as paying the property, twice, and I don't count compounded interest which would probably pay another round.

Renting is financially ruinous if renting something nice - unless settling for something under your standard.

If your making 8 or 9% easy without high risk on your assets then its a zero cost rather than the loss presented.. Everyone that says renting is dead money doesnt seem to look at the time value of money.

Agreed! .... yet I'd be happy to know how to make 8 or 9% without risk. And I'm fairly good with finance.

[bkk_mike]

Short term - rent...

Long term - buy...

It's simple.

If you're planning on staying for 20-30 years, rent will increase over time, but the mortgage will only vary with interest rates, and interest rates here are actually fairly high already (7%), but as you pay off the balance, the interest component will drop until eventually you're not paying anything...

Admittedly, I don't think Thailand's property market is like the UK's where I bought my first place in 93, and realised when I moved out in 99 that the amount the flat had gone up in value since I bought it more than covered all the mortgage payments I'd made in those 6 years. Add in that renting in the same building now is about 3 times what my mortgage payments were - and mortgage rates were higher then...)

Renting long term (15+ years) doesn't make sense unless you believe that property prices will fall over the 15 year period. (Has happened - in places like Germany and Japan - but even people who bought in the UK 15 years ago - and have gone through the global recession - are still better off than someone that rented the same flat for the same period...)

Especially in Thailand if it's not a truly prime area - buying has problems in that you're tying up capital and selling seems to take even longer than it does in the west, so for short term, rental is the way to go...

[james5121]

The main problem with renting is that if you want a nive place, the rent is too expensive.

Small and low standard places are ok to rent (cost about 4 to 5%) , but a nice house costs about 7 to 9%, I calculated that if renting, one pays off the whole current sale price in only 10 to 14 years of time. So if one stays 30 years, that's the same as paying the property, twice, and I don't count compounded interest which would probably pay another round.

Renting is financially ruinous if renting something nice - unless settling for something under your standard.

Also, the landlord will raise the rent when he feels like it.

And what about doing modifications to the property...

Most of the stuff coming with rental property is crap or average. Kitchen appliances... crap. bathrooms... crap. insulation... crap. windows... crap.

If one wants something good, one has to buy or pay a hideous amount of money to achieve the same.

WOW,For me (being American) I was programed to chase the dream.(which has worked well for me in the USA) When i decided that i would move to LOS i was still under the same thinking.BUT here is the reality I am renting at 95000 BHT per year. 25 rai =7500000 BHT conservative figure because it is on main road close to Banphai HAS two large barns and the house .The house has just been updated and will be comfortable for me.NOW you add the improvements (house,barns,fruit trees,pasture,etc) i would guess i could do it for about 2000000 BHT so you have a total invested of 9500000 /95000= 100 years.NO <deleted> way am i going to live another 100 years . There is a risk that next year he may not want to rent BUT for the savings i am willing to take that risk.

NOW IN THE USA as all places it is about timing .I bought two houses at the bottom of the current dip for $45000 EACH my PITI is$450. per month.I have one rented for $750 per month and i have half the other rented for $550 per month and i live in the other half. After two years in the one i am living and five(total time owning) in the other .The one i have rented for $800. is appraised at $100 K the one i am living in is appraised at $195000.I have buyers for both and as of right now it is a sellers market here in PHX. SO it depends on the market an the timing IF YOU can pay a mortgage for what you rent then you should buy BUT if you can't cover the mortgage with the rent don't buy. This is just from a investment view( also you have to be aware of taxes,maintenance,insurance,personal income taxes,ETC) THE above are real current info for my situation. life is currently great and can't wait to get to my(rented:) ) farm.

PS: around Banphai you can rent a rai for 1000 BHT per year you can also BUY the rai for 300000 BHT there is no decision to be made there. ALSO i might be wrong but i think 1000BHT is close to what a Thai would make yearly growing rice (net) just my two cents .

ALSO for the appliances i can buy what i want because in five years they are outdated and i would want to replace just like changing paint or cars.

Edited August 23, 2013 by james5121

[hellodolly]

If you are 40-45 and you plan to have a family here, owning makes sense and is quite necessary if you are married to a Thai women as it is expected that you will accumulate assets to ensure her future and that of the children if something happens to you. I hear stories all of the time about Thai men who die and leave nothing but a lot of debt. Generally, life insurance is not something that Thai's purchase. I came to Thailand with no intention of buying a home (buying is used because you cannot own a house and land; life tenancy is the best you can do).

On the financial side owning makes no sense at all. I rent a 3bd,2b in a large Moo Ban with a nice 25 m pool and well maintained roads and grounds for 8500 Bt a month including air con. A tiny lot in the same Moo Ban would be 1 million and another 2 million to build the house. Plus Thai banks limit the term of the mortgage depending on your age and the age of your wife. I rent on two year leases and so far the rent has not gone up. Thais do not like pre-owned houses because of superstition about ghosts, etc. but that does not make them cheaper than building.

Actually Thais purchase lots of life insurance. Premiums are cheap. I once attended (along with a g/f at the time) a meeting/party/award presentation for reps of Allianz and was amazed at the amount of full-time and part-time sellers in C.M. alone. I was impressed with the sales. Lots of Thais are buying.

Not only sellers but banks have life insurance plans.

[hellodolly]

With renting you are often limited from carrying out any home "improvement" either by the contract or you can't take that investment away with you.

With renting you will forever be living by the rules of another, be it limitations of smoking inside 'your home' or owning certain pets or painting the walls a particular color.

With house and land ownership yes you might have 'bad' neighbors but choosing the right place for home and dealing with other people is part of living in a community, if you are running away from people all the time you will only know packing and unpacking boxes yet never know the feeling of coming home.

It's the natural order of things that we grow old amass stuff and die, it's nice to be able to leave a house to someone you care for rather than a monthly payment and so many days to vacate your belongings.

At least you still have the boxes to hand from your last move.

How about not amassing things and just putting the money in the bank for your loved one when you die. The down payment would be a sizable chunk of change to begin with. Yes you might choose the right place when owning but what do you do if the wrong neighbor moves in next door?

You have two choices put up with it or try to sell and get the boxes out.

As I said earlier it is a matter of choice.

Financially it is a crap shoot when you buy.

Yes I know there are people who have made money off of owning. I have a friend who in the last year sold four condos. When I talked to him about it he said he made money on each one of them. But only because of the exchange rate.

Emotionally it might be a very good investment. To each his own There is nothing wrong with owning or renting.

It is what ever you make it.

[hawker9000]

Rent, and you can always move. Rent, and you may HAVE to move.

If you really don't want to be moving on lease-expiration every year, renting can be a hassle. At lease-end, the landlord can always decide not to renew, OR can - and probably will in a desirable location - raise the rent (knowing you'd likely be willing to pay at least a bit more just to not have to move). Also, do Thai leases provide for the landlord merely giving you 30d notice if he wants to sell the place or otherwise move you out? Even if he can't, I'll bet he can for cause, and such cause is probably all too easily found in Thailand if you're a foreigner. And then there's the matter of getting your security or damage deposits back at lease-end. Good luck with that in Thailand. 'Might as well just figure it in to the cost of your lease.

Despite all that, if it were me, I'd be a renter. I'd look hard for a good landlord, but I wouldn't even consider buying in Thailand.

[Nowisee]

Rent... it provides freedom of movement and in retirement I want freedom of movement.

Home ownership is way overrated. There is little to no financial advantage to owning once you factor in and back out all costs over the long term, especially if there is little to no appreciation in both property and currency valuation.

At my age of 51, there is no reason to own at this point in my life. IF.... I was 25, married and raising a family in rural US then I would take that risk.

Remember, a home is a liability. A home is not easy to get out of should you need to and more often than not I have needed to for one reason or another. And, I like living in different areas just because.

This is my opinion and I have nothing to support or back any of it up... 55555

Up to you.

[Thighlander]

I'm going back to the States next month so I can wash my clothes in a Maytag, with hot-water.

[geezer2]

If you rent and need to return home for 6+ months, what do you do with all your stuff while you are not there?

If you rent, are you able to easily upgrade appliances such as refrigerator, clothes washer, TV, etc. ?

I just ask because I am curious. It seems to me, if you owned, you would always have a place to keep your stuff. You could customize your place any way you would like. With renting it seems like you are locked into stuff that you may not want or need. I have no experience in renting a place. Does the owner let you make changes if you sign a long lease?

I rent but if I went away I would still pay the rent as it would be cheaper than stroreing

[pomchop]

Oh how I wish I would have BOUGHT several Bangkok Condos that I looked at about the time of the 1997 bubble. I would have a great big pile of baht today. Renting sometimes makes more sense....but at other times BUYING makes more sense.

[geezer2]

I'm going back to the States next month so I can wash my clothes in a Maytag, with hot-water.

that's nice to know

[pomchop]

If you rent and need to return home for 6+ months, what do you do with all your stuff while you are not there?

If you rent, are you able to easily upgrade appliances such as refrigerator, clothes washer, TV, etc. ?

I just ask because I am curious. It seems to me, if you owned, you would always have a place to keep your stuff. You could customize your place any way you would like. With renting it seems like you are locked into stuff that you may not want or need. I have no experience in renting a place. Does the owner let you make changes if you sign a long lease?

I rent but if I went away I would still pay the rent as it would be cheaper than stroreing

So if you rent and you only are there six months a year and say you pay 25 k a month in rent that means you are really paying 50 k a month for the time you are there. That is one of the problems with renting. If you want to pay to store your stuff and pack it all up every few months and then find a new place when you return.... or live out of a suitcase with the most meager possessions for the rest of your life and if you want to be at the mercy of a landlord who can kick you out at anytime or a landlord who expects YOU to do any repairs or do without then renting might be a good idea. Or NOT.

Both renting and buying have problems. The best decision involves many factor and there is no one size fits all solution to the question.

[CNXTim]

Rent annually from a carefully selected landlord.

Buy a condo in a carefully selecfed building

Take a 30 year lease from a carefully selected landlord and redecorate and garden to your hearts content.

All the above in your own name....

[sandhurstmolonski]

It depends on your financial position. Owning property is a nice place to store wealth. If you don’t have a lot of excess money then you probably have never contemplated that thought. What to do with your money? Bonds, stocks, precious metals, art, real estate all offer a place to store wealth.

Renting in some properties could be a problem but in better developments you don’t have much to worry about, the people are respectful of one another.

Of Course to " Store Wealth " the price must rise ..If the Price in Stagnant , you actually loose money taking account if Inflation .

I would suggest Rather Strongly that Thailand is NOT the place to Invest , for any number of Reasons . Invest in your desired Nation ( Property ) ..

Enjoy Thailand , Rent a Lovely place , Its extremely easy to get long term leases . If you Wish to " Store " Money ..Put it in a term deposit in a Western Country and dont touch it , you will just now Track Inflation . Better Options , on the ASX etc , if you want some Income .

I dont see that there are any Social concerns on Renting / Buying , you would have to have neighbours either way .

[sandhurstmolonski]

I'm going back to the States next month so I can wash my clothes in a Maytag, with hot-water.

Good to Know and Enjoy ..5 5 5 5 5 ..Not sure the Maytag will make much difference . 5 5 5

[Saan]

When the Wife's mother dies there is the possibility that I may move on to some where else. The wife likes Bali.

You are about 40 years too late for Bali. Bali in the 70's was the shang-ri-la that everyone that goes there now is looking for. Now the island is just a 24 hour traffic jam and the beautiful Balinese people have lost just about everything.

[AnotherOneAmerican]

If you rent and need to return home for 6+ months, what do you do with all your stuff while you are not there?

If you rent, are you able to easily upgrade appliances such as refrigerator, clothes washer, TV, etc. ?

I just ask because I am curious. It seems to me, if you owned, you would always have a place to keep your stuff. You could customize your place any way you would like. With renting it seems like you are locked into stuff that you may not want or need. I have no experience in renting a place. Does the owner let you make changes if you sign a long lease?

I rent but if I went away I would still pay the rent as it would be cheaper than stroreing

So if you rent and you only are there six months a year and say you pay 25 k a month in rent that means you are really paying 50 k a month for the time you are there. That is one of the problems with renting. If you want to pay to store your stuff and pack it all up every few months and then find a new place when you return.... or live out of a suitcase with the most meager possessions for the rest of your life and if you want to be at the mercy of a landlord who can kick you out at anytime or a landlord who expects YOU to do any repairs or do without then renting might be a good idea. Or NOT.

Both renting and buying have problems. The best decision involves many factor and there is no one size fits all solution to the question.

Rent in CM for a condo or two bedroom house is about 5k a month.

[LawrenceChee]

I am a strong subscriber of renting. There are many ways to leave a legacy for our loved ones in Thailand and the most practical is still cash and insurance although there are some who put an emotional attachment to leaving a house, so it's personal.

On a financial front there are many advantages of renting. There are fears that the landlord would raise the rent on renewal but there are also a possibility of better option and no loss to you.

Most landlords are reasonable and for them finding a good tenant is as important as you finding a good landlord. Most sensible landlord will not throw someone out just to get 1000,2000 baht more. They rather have someone that will turn their house into a wreck upon return

There are significant developments going on to keep the rent constant and the supply chain budging

As for having to store things, there are a load of cheap options ...just find a cheap room for 2000-3000 baht rental a month pay upfront for a year to get even more discount and you have a free storage space for more stuff

[LawrenceChee]

Oops I mean most landlords do not want a crazy renter wrecking their houses on return

[elektrified]

With renting you are often limited from carrying out any home "improvement" either by the contract or you can't take that investment away with you.

With renting you will forever be living by the rules of another, be it limitations of smoking inside 'your home' or owning certain pets or painting the walls a particular color.

With house and land ownership yes you might have 'bad' neighbors but choosing the right place for home and dealing with other people is part of living in a community, if you are running away from people all the time you will only know packing and unpacking boxes yet never know the feeling of coming home.

It's the natural order of things that we grow old amass stuff and die, it's nice to be able to leave a house to someone you care for rather than a monthly payment and so many days to vacate your belongings.

At least you still have the boxes to hand from your last move.

Why not leave stocks and bonds, mutual funds, etc. that you can keep in YOUR NAME while you are alive and YOU can collect the dividends, coupons, etc. ? If you have already "given it away" you're really not leaving anything are you?