Is buying a few condos in cm a good pension/little income plan for the future?

[whereyoufrom]

I'm currently contemplating buying not just the one but maybe a few others as a little income and a sort of a pension plan.

I'm not some uber rich guy or anything but a few condos over time would be do able.

I'm in Chiang Mai so mainly looking there but I have to admit I still don't really know the market.

It seems to work for others for a little retired income or will I fall foul of some Thai tax/work laws?

Where you from? What you do? How long you stay Thailand? You have girlfriend? What you do?

Time to get some business cards printed.

[pigeonjake]

you should post this in the pattaya forumn,

i here that theres loads of blokes want to move from there,

you could sort a deal out, get a tenent sorted before you buy,,lol

[Spaniel]

My advice, save yourself a lot of aggravation and just buy a low cost Index Fund from Vanguard and hope for the best!

Edited September 19, 2013 by Spaniel

[farang000999]

Once you pay all your costs and consider disaster situations I think you will find your potential returns are not worth the headache. This has been my personal experience with rental real estate. The stock market is a much easier solution on a long term scale.

[kannot]

OK speaking as someone who owns +5 condos in Bangkok Ill tell you what Ive found

1. Timing of buying and selling critical to profit

2 Location

3 there are always some bad tenants

4 it will be more work than you think

5 if you have any diy skills you will save a lot of time and hassle fixing it yourself ( and you will be fixing stuff)

6 Tenants dont care one bit about your room

7 Money talks no deposit no room

8 Dont ever give an inch on deposit money up front

9 Trust no one although you do get some good tenants and sometimes even they go bad

10 Good money was to be made in Bangkok but due to timing now not so good, anywhere else i dont know but suspect way lower rents than BKK

Been doing it 7 years but now sold four of them due to timing/oversupply/ falling rents

Dont expect to make a profit on the actual property when selling, what I got was 7 years good rent money and sold at slightly more than I paid............you may well lose money at sale time.

There are a million other things I dont have time to tell.

I made about 12% profit for the first 3-4 years slowly decreasing down to 9-10% at sale time due to oversupply.

Edited September 19, 2013 by kannot

[greg71]

Business cards wont be helping you in anyway if wanting to buy .Just cash is needed .

[FiftyTwo]

Cm is awash with empty condos, unrented and unsold.

Huge bubble of overpriced, poorly managed rubbish.

[ukrules]

This is just a little tip but I suggest you're careful with the wording you have printed on any business cards unless you have a work permit.

[wpcoe]

5 if you have any diy skills you will save a lot of time and hassle fixing it yourself ( and you will be fixing stuff)

A caution about doing work without an appropriate work permit would apply there, too.

Probably not a problem in most cases, but all it would take is someone to report you and you'd be in all kinds of deep stuff. Deportation would not be out of the question, which is not something you want to deal with if you are retiring in Thailand.

[MB1]

Invest in retirement homes and sheltered housing, from what I've been reading lately, by their own admission of some, Chang Mai is an old farts paradise...Could be right up your street...

Edited September 19, 2013 by MB1

[giggles]

i know a brit who did this in BKK and has had trouble with the tenants over rent ,and wants to sell out but cant find a buyer .so make sure you can sell them on at some time.

[Hugh Jarse]

My advice, save yourself a lot of aggravation and just buy a low cost Index Fund from Vanguard and hope for the best!

Agree, forget about condos as a cushion for retirement income. There are far too many new builds at low prices and the low end stuff is oversubscribed. There is a bubble about to burst in this province. BEWARE. Do nothing until you have done your fieldwork and after 6 months decide.

[Hugh Jarse]

Invest in retirement homes and sheltered housing, from what I've been reading lately, by their own admission of some, Chang Mai is an old farts paradise...Could be right up your street...

Not just the retirement homes (MB1 how good is this sector regulated?) look into the Rehab. market also, lots of young and rich junkies too need good and appropriate care.

[davejones]

Cm is awash with empty condos, unrented and unsold.

Huge bubble of overpriced, poorly managed rubbish.

Depends on location.I ws looking at rental properties in CM earlier this year and came across one building with over 100 condos. They showed me the rental and sales book. There was one condo for sale and two for rent. It was a very popular building. These are the sort of places you should be buying in.

As for the person who said they sold after 7 years with little profit, it's again down to location. A relative of my gf bough 15 years ago for 1m, and now other houses in the street are selling for 5m+. But it's a place where Thai people want to live, so there is a good re-sale market

Finding the right location is CRITICAL. That means fining the exact street, exact building, etc that local people want to live.

Most people don't want to live in a tiny studio in the city, and that's what there's a lot of. So of course it might not make money. It's oversupplied. Massively. But lots of areas are undersupplied. It's your job to find those places.

[johnnyk]

I own a house that I rent to holidayers. There is ALWAYS stuff to fix or replace. There are plenty of petty hassles from people incapable of changing light bulbs to cleaning up the "work" of incompetents.

That's just one dwelling, I sure wouldn't want more than one!

Overall I make about 5% ROI. There are better, easier ways to make 5% for sure.

I don't even think about any potential profit from selling because selling a "used" house isn't a breeze when 95% of the market is Thai.

I'm not unhappy with my situation but would I do it again? Nope.

[KittenKong]

3 there are always some bad tenants

4 it will be more work than you think

5 if you have any diy skills you will save a lot of time and hassle fixing it yourself ( and you will be fixing stuff)

6 Tenants dont care one bit about your room

7 Money talks no deposit no room

8 Dont ever give an inch on deposit money up front

9 Trust no one although you do get some good tenants and sometimes even they go bad

......

I made about 12% profit for the first 3-4 years slowly decreasing down to 9-10% at sale time due to oversupply.

Maybe you were just unlucky with your tenants. I've been in my rental unit for several years. My landlord has never needed to do anything at all during that time. In fact I only ever saw him once since I moved in. Apart from cleaning the aircon once a year there have been no repair bills of any type and the condo is cleaner than it was when I moved in. Even the kitchen sink drain works properly now since I spent 150B on a proper u-trap and fitted it myself (prior to that it was a sealed u-bend of drain pipe which could not be opened or cleaned or emptied).

But on the other hand I only pay about 4% of what the owner thinks is the current market value of the unit (or about 5% of what I think it might really be worth) and he pays the common fees and cable TV fee etc,. If I was paying 10 or 12% then I doubt I would have very much respect for the landlord or the property either.

Edited September 19, 2013 by KittenKong

[KittenKong]

I own a house that I rent to holidayers. There is ALWAYS stuff to fix or replace. There are plenty of petty hassles from people incapable of changing light bulbs to cleaning up the "work" of incompetents.

That's just one dwelling, I sure wouldn't want more than one!

Overall I make about 5% ROI. There are better, easier ways to make 5% for sure.

Back in Europe I did holiday rentals very successfully for 20+ years. We rarely had anything expensive to fix or replace but we did keep the place in extremely good order. Our tenants appreciated this and would normally pay for replacement items such as cracked saucers themselves, even though I would have considered this as normal wear and tear and would not have charged them.

One person did manage to break half a porcelain handbasin off the wall (God knows how) but they were very keen to pay the entire bill for replacing it.

[FiftyTwo]

As for the person who said they sold after 7 years with little profit, it's again down to location. A relative of my gf bough 15 years ago for 1m, and now other houses in the street are selling for 5m+. But it's a place where Thai people want to live, so there is a good re-sale market

House and condo sales are completely different, land prices go up every year, condos have no land.

Ten years ago, near I where I live land was 30k per rai, this year same land 500k per rai. The value of the shack standing on that land is unchanged.

[worgeordie]

Its all about Location,Location,and Location,AND buying at the right price,

that will keep you slightly ahead of the game,we have been renting for

15 years and found it profitable,had to do something with the cash after

the crash of 1997, when the interest returns dropped below inflation,Had

we not done that would have been in financial straights,as would have had

to spend capital just to live.

But we have only houses,Condos pose many different problems,and I

think you would have a high turnover of tenants,renting is great you

get a return every month, its just the tenants that spoil it !

I not just a business where you just sit back and take in the money,

you have got to look after your tenants,and some of them can be

very demanding,and theres always work to do to keep your property

in good condition,

Been a landlord has worked for us,help us cope with inflation,as

the properties have tripled in value,and they paid for themselves

in approx 10 years, it worked for us, but might no for you,but at

the moment better than having money in the bank. good luck.

regards Worgeordie

[worgeordie]

As for the person who said they sold after 7 years with little profit, it's again down to location. A relative of my gf bough 15 years ago for 1m, and now other houses in the street are selling for 5m+. But it's a place where Thai people want to live, so there is a good re-sale market

House and condo sales are completely different, land prices go up every year, condos have no land.

Ten years ago, near I where I live land was 30k per rai, this year same land 500k per rai. The value of the shack standing on that land is unchanged.

Very true,its the price of land that increases in value,around here the land was 3K a wah,now its

30 K, next door to us a man bought land and house for 15m, good house,be he has demolished

it and is building new one,he just bought it for the land and location.

With Condos they are building new ones all the time,but they are not making anymore land !

regards Worgeordie

[TommyUK1960]

Investing in Thailand is risky. The odds are stacked against you.

Locking your money up in condo's is a bad move.

What you going to do if you need to access the cash quickly because selling used condo is hard.

How to become a million-air in Thailand?

Start with 10 million.

[trogers]

1. Timing of buying and selling critical to profit - Your point in a property cycle. If you buy near the bottom, you should get a higher rental yield even when rents have fallen.

2 Location - The prime consideration when investing in real properties.

3 there are always some bad tenants - Can be minimized by choosing the right location for a targeted group of clients.

4 it will be more work than you think - Maintenance is a must, upkeeping the assets that are earning for you.

5 if you have any diy skills you will save a lot of time and hassle fixing it yourself ( and you will be fixing stuff) - I fix minor stuff, and have a reliable contractor to fix larger issues like repainting, fixing cabinets, plumbing and electrics.

6 Tenants dont care one bit about your room - Japanese clients do undertake to fix minor issues themselves.

7 Money talks no deposit no room

8 Dont ever give an inch on deposit money up front

9 Trust no one although you do get some good tenants and sometimes even they go bad

10 Good money was to be made in Bangkok but due to timing now not so good, anywhere else i dont know but suspect way lower rents than BKK - Old larger condo units (2-3 bedrooms) along Sukhumvit are still giving rental yields of 6% or more. Oversupply is mainly in studios and 1-bed sector.

My comments are in red above. Old condo units (15 years or older) in good locations are probably a better bet for such an investment.

Your time horizon for such an investment should be about 12-15 years, which is appropriate for retirement income. Old condo units have lesser price variance in a property cycle, thus have lesser rise and fall in rental yields.

The level of economic activity of a city/town will determine the demand for rental space, esp from foreign clients. Pattaya is tourist based with high and low seasons. What about CM?

I restrict myself to Bangkok, along Sukhumvit, and between Asoke and Prakhanong in particular. This is where my targeted group of clients choose to reside.

[kannot]

5 if you have any diy skills you will save a lot of time and hassle fixing it yourself ( and you will be fixing stuff)

A caution about doing work without an appropriate work permit would apply there, too.

Probably not a problem in most cases, but all it would take is someone to report you and you'd be in all kinds of deep stuff. Deportation would not be out of the question, which is not something you want to deal with if you are retiring in Thailand.

done when tenant has left and door to room is closed will be NO problem.

[kannot]

Investing in Thailand is risky. The odds are stacked against you.

Locking your money up in condo's is a bad move.

What you going to do if you need to access the cash quickly because selling used condo is hard.

How to become a million-air in Thailand?

Start with 10 million.

ABSOLUTE TRIPE my Wife sells "used" condos day in day out and also rents condos regularly earning 220k a month doing this in Bangkok, they sell easily no problems if at realistic prices , she is forever at the land office doing this you have no idea what you are talking about, I sold mine within 3 weeks of advertising because they werent at stupid prices,

[kannot]

1. Timing of buying and selling critical to profit - Your point in a property cycle. If you buy near the bottom, you should get a higher rental yield even when rents have fallen.

2 Location - The prime consideration when investing in real properties.

3 there are always some bad tenants - Can be minimized by choosing the right location for a targeted group of clients.

4 it will be more work than you think - Maintenance is a must, upkeeping the assets that are earning for you.

5 if you have any diy skills you will save a lot of time and hassle fixing it yourself ( and you will be fixing stuff) - I fix minor stuff, and have a reliable contractor to fix larger issues like repainting, fixing cabinets, plumbing and electrics.

6 Tenants dont care one bit about your room - Japanese clients do undertake to fix minor issues themselves.

7 Money talks no deposit no room

8 Dont ever give an inch on deposit money up front

9 Trust no one although you do get some good tenants and sometimes even they go bad

10 Good money was to be made in Bangkok but due to timing now not so good, anywhere else i dont know but suspect way lower rents than BKK - Old larger condo units (2-3 bedrooms) along Sukhumvit are still giving rental yields of 6% or more. Oversupply is mainly in studios and 1-bed sector.

My comments are in red above. Old condo units (15 years or older) in good locations are probably a better bet for such an investment.

Your time horizon for such an investment should be about 12-15 years, which is appropriate for retirement income. Old condo units have lesser price variance in a property cycle, thus have lesser rise and fall in rental yields.

The level of economic activity of a city/town will determine the demand for rental space, esp from foreign clients. Pattaya is tourist based with high and low seasons. What about CM?

I restrict myself to Bangkok, along Sukhumvit, and between Asoke and Prakhanong in particular. This is where my targeted group of clients choose to reside.

Ill agree with most of the above but find Japanese clients tend to be smokers which is a no no for us, Taiping tower still gets good returns but Im not in there and thats as old as they get.

Bought when baht at 72 to the uk £ sold when baht at 49 did pretty well out of my 5, this was key however, more money to be made renting out other peoples rooms and with less hassle but I am exempt form this.....the Wife does that.

My plan was to sell after 7 years if the climate was right, it was and I did. The rental income I made in that time paid for the rooms outright, rooms cost me 1.2 million at the time and I sold for 1.45-1.47

I knew someone in Chiang Rai doing this as there were virtually NO condos up there, not sure how well thats going?

Was in On Nut Area mostly, many many condos there and more still coming yields much lower now and the customers have a much bigger choice of rooms.

[kannot]

As for the person who said they sold after 7 years with little profit, it's again down to location. A relative of my gf bough 15 years ago for 1m, and now other houses in the street are selling for 5m+. But it's a place where Thai people want to live, so there is a good re-sale market

House and condo sales are completely different, land prices go up every year, condos have no land.

Ten years ago, near I where I live land was 30k per rai, this year same land 500k per rai. The value of the shack standing on that land is unchanged.

Very true,its the price of land that increases in value,around here the land was 3K a wah,now its

30 K, next door to us a man bought land and house for 15m, good house,be he has demolished

it and is building new one,he just bought it for the land and location.

With Condos they are building new ones all the time,but they are not making anymore land !

regards Worgeordie

Selling land is not so easy as selling condos.

[kannot]

I own a house that I rent to holidayers. There is ALWAYS stuff to fix or replace. There are plenty of petty hassles from people incapable of changing light bulbs to cleaning up the "work" of incompetents.

That's just one dwelling, I sure wouldn't want more than one!

Overall I make about 5% ROI. There are better, easier ways to make 5% for sure.

Back in Europe I did holiday rentals very successfully for 20+ years. We rarely had anything expensive to fix or replace but we did keep the place in extremely good order. Our tenants appreciated this and would normally pay for replacement items such as cracked saucers themselves, even though I would have considered this as normal wear and tear and would not have charged them.

One person did manage to break half a porcelain handbasin off the wall (God knows how) but they were very keen to pay the entire bill for replacing it.

How many condos do you rent out in Thailand?, you are speaking as a tenant, holiday rentals are TOTALLY different kettle of fish especially in another country. You usually meet the tenant at start and finish of their time with you so its MUCH easier to keep an eye on whats going on + they know they will lose any deposit if stuff gets broken.

APPLES and ORANGES

[WhizBang]

Personally, I would not even buy one condo with the thoughts of trying to make money on it, either through rental or resale. I would buy only if you plan to live in it yourself.

That's my take on it, anyway. Today, it seems the supply far exceeds the demand. EVERY condo building I have seen has a lot of empty rooms.

Personally, I have most of my money elsewhere (as in NOT in Thailand).

[KittenKong]

I own a house that I rent to holidayers. There is ALWAYS stuff to fix or replace. There are plenty of petty hassles from people incapable of changing light bulbs to cleaning up the "work" of incompetents.

That's just one dwelling, I sure wouldn't want more than one!

Overall I make about 5% ROI. There are better, easier ways to make 5% for sure.

Back in Europe I did holiday rentals very successfully for 20+ years. We rarely had anything expensive to fix or replace but we did keep the place in extremely good order. Our tenants appreciated this and would normally pay for replacement items such as cracked saucers themselves, even though I would have considered this as normal wear and tear and would not have charged them.

One person did manage to break half a porcelain handbasin off the wall (God knows how) but they were very keen to pay the entire bill for replacing it.

How many condos do you rent out in Thailand?, you are speaking as a tenant, holiday rentals are TOTALLY different kettle of fish especially in another country. You usually meet the tenant at start and finish of their time with you so its MUCH easier to keep an eye on whats going on + they know they will lose any deposit if stuff gets broken.

APPLES and ORANGES

If you actually read what was written you should notice that I was replying to someone on the subject of holiday house rentals. I fully understand that there can be differences between holiday rentals and long-term rentals, but that was not the subject of my comment.

To answer your other point, in 20+ years of successfully doing those holiday rentals I never asked for a deposit and never needed to.

[bocceball1]

Been buying and selling (and renting out) properties in US (over 40 years ...still have units am renting ... home and some apartments....Home is Lake Front and apartments near Silicon Valley.....Point is....LOCATION, LOCATION ,,,LOCATION). In Thailand have beachfront property that I have subdivided into 4 lots. Presently have home on one and have plans approved and ready to build a duplex on another (10,000 baht/ sq meter}...

Point is ...follow what you believe in. If you think you have a good plan ... do it...BUT plan, do your research and always remember, with property its Location, Location, Location!

A lot of good advice here ....AND a lot of BUNK by people who have no guts to get off their A== and do something...probably never have!

Good luck.