Buying (cheap) Condo in Chiang Mai

[mesquite]

I did some very back of a cigarette packet calculations & worked out that I would be £60-65 per month better off buying a 3MillionTHB condo than paying 22,000THB per month to rent.

Main assumptions were

1. Numbers above (e.g if the rent was only 20K, the difference was only £25 per month, if it was only 15k, I'd be better of by £70 per month renting

2. Assumed rent goes up at a constant yearly inflation rate of 5.3% (my attempt to cater for inflation & currency fluctuations)

3. Condo/maintenance fees of 5k per month

4. Time period of 11 years & 9 months (until I'm 60 & my pension kicks in)

5. I'd pay for the Condo in cash upfront so would be ahead/behind by anything it was worth minus lost opportunity costs of not having the money invested.

Completely flawed assumptions, but better than nothing to me

You are looking on the best outcome, why not look at the worst outcome ......

1. A 3M condo aimed at the foreigner market would probably be priced at 1.5M for the Thai market.

Assume you lost 1.5M the moment you made the transfer.

2. As the market is increasingly flooded with condos, why not assume rent reduces by 10% a year?

3. You are the only one paying the maint. fee.

4. Health issues force you to stay in your home country.

5. The bht crashes against your home currency, losing 50% of your upfront money.

Yep, my assumptions are all flawed too!

I don't understand the first one.

i don't either.

I do. It represents worst case dual pricing. Probably pretty accurate for that scenario

[JB300]

I did some very back of a cigarette packet calculations & worked out that I would be £60-65 per month better off buying a 3MillionTHB condo than paying 22,000THB per month to rent.

Main assumptions were

1. Numbers above (e.g if the rent was only 20K, the difference was only £25 per month, if it was only 15k, I'd be better of by £70 per month renting

2. Assumed rent goes up at a constant yearly inflation rate of 5.3% (my attempt to cater for inflation & currency fluctuations)

3. Condo/maintenance fees of 5k per month

4. Time period of 11 years & 9 months (until I'm 60 & my pension kicks in)

5. I'd pay for the Condo in cash upfront so would be ahead/behind by anything it was worth minus lost opportunity costs of not having the money invested.

Completely flawed assumptions, but better than nothing to me

I'm paying 12000 baht a month in rent for a condo that I suspect would sell for about 3 million baht. I had to shop around a bit to find this place, but now that I've established myself as a responsible tenant that pays on time and takes care of the property, the owner seems keen on keeping me here and has not brought up the subject of a rent increase in over two years. And, as I indicated earlier, if I decide to move it will be a lot easier than if I owned this place. I'm missing out on the investment possibilities, but real estate investing in Thailand is more of a gamble than I'm willing to take.

12k per month for a 3M apartment is "only" 1-250 so (for me) borderline between Rent Vs Buy (e.g my house in the UK is rented out at approx 1-350 & I rent an apartment in Singapore at approx 1-450)

but at 12k per month for what I'm assuming is a very nice Apartment, I'd rent as well

"1-250", 1-350", "1-450"? Do you mean the monthly rent divided by value of property? If so, most of the posters on this subject optimistically assume they can rent out property at 1-100, or in a worst case scenario 1-200.

Yes, I think my condo is nice and in a good location. But if Nimmanhamin goes south due to rampant over-developement I can easily relocate. That's one of the advantages of renting.

Exactly, it's what I look at when buying a property to live in (never mind as an investment)

1-100 is pretty common in PI, 1-200 Thailand, 1-300 UK (not London), 1-500 Singapore

Doesn't necessarily make it a good/bad investment, many more factors to consider

[JB300]

use it or similar so we can rip your calcs apart properly http://www.editgrid.com/

edit: here bcause ur are all to lazy: http://www.editgrid.com/user/cmcondo/CMCondo

read/write access fixed

http://www.editgrid.com/user/cmcondo/CMCondo

history so what you write can still be seen if it gets changed

http://www.editgrid.com/property/history/list/7035824

Not sure if this was aimed at my "Calcs" but I'm happy with my maths thanks (to be honest it represents less than 15% of what I'm concerned about)

But I will check out the links (knowledge gained is less mistakes made) so thanks again

Edit: sorry there's no way I'm uploading the spreadsheet I use as it has personal details about my bank balances, shareholdings, pensions & even predicted redundancy payments.

If you'd like me to cut out the property part (assumptions I've stated should cover it) then can look into doing that.

Edited April 26, 2014 by JB300

[icare999]

its a buyers market from my enquirys and inspections over the last month or so, condos say in the 10 year and older bracket can be bought for up to 30.000 sq metre if we move into the newer ones approx. 50.000 sq metre and the brand new ones 60.000 plus is the call,naturally location plays a major role,in particular noise pollution,,that will dicatate the price,

you are joking right or just totally out of touch We own condos around Thailand in Bangkock Hui HIn Pattaya and CM and I know condos which owners have tried to sell for years in CM suddenly are sold.

It is a sellers market but IMO a bubble everywhere and just to much supply so a repeat of 1997 is going to happen only question is when in next year or next 3-5 years

However long term over last 30 years we've done very well but you need to be able to weather the bumps

[evenstevens]

its a buyers market from my enquirys and inspections over the last month or so, condos say in the 10 year and older bracket can be bought for up to 30.000 sq metre if we move into the newer ones approx. 50.000 sq metre and the brand new ones 60.000 plus is the call,naturally location plays a major role,in particular noise pollution,,that will dicatate the price,

you are joking right or just totally out of touch We own condos around Thailand in Bangkock Hui HIn Pattaya and CM and I know condos which owners have tried to sell for years in CM suddenly are sold.

It is a sellers market but IMO a bubble everywhere and just to much supply so a repeat of 1997 is going to happen only question is when in next year or next 3-5 years

However long term over last 30 years we've done very well but you need to be able to weather the bumps

appreciate your views,if its a sellers market why is there a condo very recently completed adjacent to meechok plaza in a very unique position i might add, not completely sold?????,during construction ,the cry was 75%sold and selling like hot cakes,dropped into there sales office y/day, approx 40% are not sold over the whole 7 floors,prices vary from approx 65 to 90 k a sq metre,the units i might add are very nicely finished, there we go and your call is a sellers market ,during my enquirys and inspections have found that this condo is not on its tot,and more to come providing they are finished and ready for hand over ...have a nice evening

[Thighlander]

2 million for a studio, or close to it. Not a desirable location. Remember, the thread title has the word "cheap" in it. More proof that the value is in the older buildings; if you can find a good one. A lot of them are a simple white paint job from looking a lot newer.

[evenstevens]

2 million for a studio, or close to it. Not a desirable location. Remember, the thread title has the word "cheap" in it.

kindly noted .your posts 54,59,63,,65,68 are completely off topic

,at least my post relates to the opening post request and has good contents

and futhermore if that does not satify u ,will use the old proverb

whats good for the goose is good for the gander

[elektrified]

its a buyers market from my enquirys and inspections over the last month or so, condos say in the 10 year and older bracket can be bought for up to 30.000 sq metre if we move into the newer ones approx. 50.000 sq metre and the brand new ones 60.000 plus is the call,naturally location plays a major role,in particular noise pollution,,that will dicatate the price,

you are joking right or just totally out of touch We own condos around Thailand in Bangkock Hui HIn Pattaya and CM and I know condos which owners have tried to sell for years in CM suddenly are sold.

It is a sellers market but IMO a bubble everywhere and just to much supply so a repeat of 1997 is going to happen only question is when in next year or next 3-5 years

However long term over last 30 years we've done very well but you need to be able to weather the bumps

appreciate your views,if its a sellers market why is there a condo very recently completed adjacent to meechok plaza in a very unique position i might add, not completely sold?????,during construction ,the cry was 75%sold and selling like hot cakes,dropped into there sales office y/day, approx 40% are not sold over the whole 7 floors,prices vary from approx 65 to 90 k a sq metre,the units i might add are very nicely finished, there we go and your call is a sellers market ,during my enquirys and inspections have found that this condo is not on its tot,and more to come providing they are finished and ready for hand over ...have a nice evening

I know the place as it's around the corner from my house. I don't believe 60% are sold. There is never more than 1 or 2 units with any lights on in the entire building. Never any cars parked there. Thais can't wait to move in to new places. You usually see them moving in before they are 100% complete and this place has been complete for months. The asking price is OTT and the location is terrible - right on the corner of a busy intersection. They are like hotel rooms where you can stand on the tiny balcony (no room to BBQ, sit, etc. - maybe hang some clothes to dry) and see your neighbor standing right along-side you on his balcony! 7-Eleven has already come and gone due to the lack of any customers.

[Oscar2]

you are joking right or just totally out of touch We own condos around Thailand in Bangkock Hui HIn Pattaya and CM and I know condos which owners have tried to sell for years in CM suddenly are sold.

It is a sellers market but IMO a bubble everywhere and just to much supply so a repeat of 1997 is going to happen only question is when in next year or next 3-5 years

However long term over last 30 years we've done very well but you need to be able to weather the bumps

appreciate your views,if its a sellers market why is there a condo very recently completed adjacent to meechok plaza in a very unique position i might add, not completely sold?????,during construction ,the cry was 75%sold and selling like hot cakes,dropped into there sales office y/day, approx 40% are not sold over the whole 7 floors,prices vary from approx 65 to 90 k a sq metre,the units i might add are very nicely finished, there we go and your call is a sellers market ,during my enquirys and inspections have found that this condo is not on its tot,and more to come providing they are finished and ready for hand over ...have a nice evening

I know the place as it's around the corner from my house. I don't believe 60% are sold. There is never more than 1 or 2 units with any lights on in the entire building. Never any cars parked there. Thais can't wait to move in to new places. You usually see them moving in before they are 100% complete and this place has been complete for months. The asking price is OTT and the location is terrible - right on the corner of a busy intersection. They are like hotel rooms where you can stand on the tiny balcony (no room to BBQ, sit, etc. - maybe hang some clothes to dry) and see your neighbor standing right along-side you on his balcony! 7-Eleven has already come and gone due to the lack of any customers.

that (mini) 7-Eleven lasted about a month. terrible place for one as there was no access. i guess they were counting on tenants to keep them in business.

[binjalin]

I don't see any signs of 'price correction' and quite the opposite - that's why they are building, building, building

wealthy Chinese are flooding in, Bangkokians buying like crazy (street protests, flooding etc.) and new shopping malls sprouting up

prices are up and anyone 'waiting' for a crash will simply miss the boat

our beloved new home is expanding and healthy

anyway back to the OP try PP condo (Google) cheap and cheerful

[Thighlander]

read my post #82....the number of lights on is a very poor indicator of units sold. It's ironic, nobody here has walked into one of these condo ghost town sales offices and tried a low ball, or even a discounted price, nor have they sent their thai partners in to try and haggle a good deal. You might get transfer fees paid, and some laminate furniture from Koncept; not much else, and they're not going to finance you, either.

[evenstevens]

its a buyers market from my enquirys and inspections over the last month or so, condos say in the 10 year and older bracket can be bought for up to 30.000 sq metre if we move into the newer ones approx. 50.000 sq metre and the brand new ones 60.000 plus is the call,naturally location plays a major role,in particular noise pollution,,that will dicatate the price,

you are joking right or just totally out of touch We own condos around Thailand in Bangkock Hui HIn Pattaya and CM and I know condos which owners have tried to sell for years in CM suddenly are sold.

It is a sellers market but IMO a bubble everywhere and just to much supply so a repeat of 1997 is going to happen only question is when in next year or next 3-5 years

However long term over last 30 years we've done very well but you need to be able to weather the bumps

appreciate your views,if its a sellers market why is there a condo very recently completed adjacent to meechok plaza in a very unique position i might add, not completely sold?????,during construction ,the cry was 75%sold and selling like hot cakes,dropped into there sales office y/day, approx 40% are not sold over the whole 7 floors,prices vary from approx 65 to 90 k a sq metre,the units i might add are very nicely finished, there we go and your call is a sellers market ,during my enquirys and inspections have found that this condo is not on its tot,and more to come providing they are finished and ready for hand over ...have a nice evening

I know the place as it's around the corner from my house. I don't believe 60% are sold. There is never more than 1 or 2 units with any lights on in the entire building. Never any cars parked there. Thais can't wait to move in to new places. You usually see them moving in before they are 100% complete and this place has been complete for months. The asking price is OTT and the location is terrible - right on the corner of a busy intersection. They are like hotel rooms where you can stand on the tiny balcony (no room to BBQ, sit, etc. - maybe hang some clothes to dry) and see your neighbor standing right along-side you on his balcony! 7-Eleven has already come and gone due to the lack of any customers.

your post generally sums up my thoughts also, in particular the opening price on offer,sure one could bat them down,but why waste valuable drinking time, if not interested as for the occupancy bit(*lites on) a rule of the thumb estimate is that only one third(any condo) live there at any one time,have a nice evening

Edited April 27, 2014 by evenstevens

[Mousehound]

I asked last week for prices on units in a new development. The plans indicated that all but about six units were sold. However, I was offered over 12 units - so did people drop out and they don't review their website. Seems fishy to me. Either porkies, or a bit of bait and switch, or both. All so obvious, and all it does is put me off. I think renting is for me for a while at least.

[heybruce]

I don't see any signs of 'price correction' and quite the opposite - that's why they are building, building, building

wealthy Chinese are flooding in, Bangkokians buying like crazy (street protests, flooding etc.) and new shopping malls sprouting up

prices are up and anyone 'waiting' for a crash will simply miss the boat

our beloved new home is expanding and healthy

anyway back to the OP try PP condo (Google) cheap and cheerful

I can see that in Nimmanhamin, they're building, building, building-- but only condos, condos, condos. Unfortunately I don't see improvements to streets, water, sewage, power, etc. As I've posted before, the local infrastructure is already stressed.

Two possibilities; the condos sit empty until the market somehow corrects, or the condos are occupied and Nimmanhamin and similar locations become unbearable. Either way I don't feel a strong motivation to buy.

[Thighlander]

there aren't any sewers in Dubai, either. It is all pumped out by trucks. Some how, 150 cm of annual rain will take care of most water issues. If you aren't comfortable owning; just rent....I hear there are some great investment ideas floating around the expats club...give them a try.

[heybruce]

there aren't any sewers in Dubai, either. It is all pumped out by trucks. Some how, 150 cm of annual rain will take care of most water issues. If you aren't comfortable owning; just rent....I hear there are some great investment ideas floating around the expats club...give them a try.

Are you serious? Modifying existing buildings to somehow accommodate sewage trucks, then putting these trucks on the streets of central Chiang Mai? Condo residents collecting rain water when the taps stop working? That's part of the "things become unbearable" scenario that makes me happy to rent. If these things happen I'll move.

I'm comfortable with my current investment situation, I don't want to screw it up with a high risk investment in the Chiang Mai condo market.

[Thighlander]

let me put it in Canadian terms.....most condos are not currently on sewer systems; therefore, it will be quite difficult for them to be overloaded.

[heybruce]

let me put it in Canadian terms.....most condos are not currently on sewer systems; therefore, it will be quite difficult for them to be overloaded.

Interesting. And when you flush the toilet, the water goes where?

[Thighlander]

Septic system......Do you know of a sewage treatment plant in CNX?

But as far as Nimman becoming overloaded; it has already happened. Not a good place to bike, walk, run, or drive. Deteriorating quality of life doesn't necessarily mean declining prices. Take Sukhumvit Rd. as an example. Soi 11 to Asok used to be a blast...about ten years ago. Since then prices have gone straight up, people are paying over 100K psm to be way down the soi, which is nearly impossible to walk on. I can barely stand the place anymore. Loi Kroh was a fun place to go before the rents got tripled....I almost never go there anymore. Haven't seen a happy hour sign in front of one of those places in years. Eventually, it will be large corporate hotels, 50 thb bottled water, and mom/pops long gone, but the ones who were smart enough to own some of that land will be very well off.

Edited April 28, 2014 by Thighlander

[heybruce]

Septic system......Do you know of a sewage treatment plant in CNX?

But as far as Nimman becoming overloaded; it has already happened. Not a good place to bike, walk, run, or drive. Deteriorating quality of life doesn't necessarily mean declining prices. Take Sukhumvit Rd. as an example. Soi 11 to Asok used to be a blast...about ten years ago. Since then prices have gone straight up, people are paying over 100K psm to be way down the soi, which is nearly impossible to walk on. I can barely stand the place anymore. Loi Kroh was a fun place to go before the rents got tripled....I almost never go there anymore. Haven't seen a happy hour sign in front of one of those places in years. Eventually, it will be large corporate hotels, 50 thb bottled water, and mom/pops long gone, but the ones who were smart enough to own some of that land will be very well off.

Septic systems work for lightly populated areas, they don't work for densely populated cities. I'm happy to say I've observed the foundation being prepared for a number of local condos and they don't involve digging large deep holes to contain sewage. I'm also confident that existing condos are not sitting on huge man-made chambers of sewage.

I try not to think about what happens to Chaing Mai's waste, I hope it is being treated in responsible manner but fear that it is being dumped into the environment somewhere with little or no treatment. But I know it isn't being dumped in the ground underneath the condos, so it must be traveling by sewer pipes somewhere. Since the current road, power and water system is struggling to cope with the current population in the Nimmanhamin area, I suspect the sewage system is similarly stressed.

I agree that property values can go up while quality of life goes down, but I'm not as certain as you are that that is what will happen in Chiang Mai. Factor this uncertainty in with the challenges Thailand presents to small investors and you have a country where I'm happy to live and rent, but not invest.

[chiang mai]

That's funny, where exactly do you think it all goes to, I mean, have you ever seen a sewerage pipe in CM? The treatment facility in my building can be easily seen in the floor of lower garage and that handles the needs of 96 apartments so not exactly lightly populated!

[AnotherOneAmerican]

Many use a septic tank and greywater processing.

Note: greywater in Thailand appears to be all the liquid waste.

[heybruce]

Many use a septic tank and greywater processing.

Note: greywater in Thailand appears to be all the liquid waste.

Perhaps the term septic tank is used differently from rural septic tanks I'm familiar with.. However this processed waste has to go somewhere. Where is that?

[Oscar2]

Many use a septic tank and greywater processing.

Note: greywater in Thailand appears to be all the liquid waste.

Perhaps the term septic tank is used differently from rural septic tanks I'm familiar with.. However this processed waste has to go somewhere. Where is that?

i'm fairly certain all construction around here involves underground septic tanks.

even places like Central, Tesco, Big C, etc. have huge underground septic tanks. i don't believe there are any sewage systems in place around here (although I could be wrong). but that would involve sewage treatment plants, of which i don't think exist around here.

[Thighlander]

That's why the toilet stalls have the trash cans for toilet paper....they want to keep the paper out of the system.

[AnotherOneAmerican]

Many use a septic tank and greywater processing.

Note: greywater in Thailand appears to be all the liquid waste.

Perhaps the term septic tank is used differently from rural septic tanks I'm familiar with.. However this processed waste has to go somewhere. Where is that?

The septic tank retains the solid waste, the liquid drains off into sewers which are then hopefully processed and oxygenated (most modern moobaans use this method) before pumping into the nearest klong. The septic tank has to be emptied every 3 or 4 years.

[heybruce]

Many use a septic tank and greywater processing.

Note: greywater in Thailand appears to be all the liquid waste.

Perhaps the term septic tank is used differently from rural septic tanks I'm familiar with.. However this processed waste has to go somewhere. Where is that?

The septic tank retains the solid waste, the liquid drains off into sewers which are then hopefully processed and oxygenated (most modern moobaans use this method) before pumping into the nearest klong. The septic tank has to be emptied every 3 or 4 years.

So there are pipes taking the liquid away. When it rains heavily some of these sewers back up and you can literally see water gushing out of the drains on the streets. This is especially a problem at the intersection of Huay Kaew and Siri Mangkhlachan, where the expensive Palm Springs condos are being built.

Is this liquid waste treated in any way before being drained into the sewers?

[Cow San Load]

Many use a septic tank and greywater processing.

Note: greywater in Thailand appears to be all the liquid waste.

Perhaps the term septic tank is used differently from rural septic tanks I'm familiar with.. However this processed waste has to go somewhere. Where is that?

stay awake through the night with windows open and you'll have the answer. perhaps not every night.

Edited April 28, 2014 by Cow San Load

[heybruce]

Many use a septic tank and greywater processing.

Note: greywater in Thailand appears to be all the liquid waste.

Perhaps the term septic tank is used differently from rural septic tanks I'm familiar with.. However this processed waste has to go somewhere. Where is that?

The septic tank retains the solid waste, the liquid drains off into sewers which are then hopefully processed and oxygenated (most modern moobaans use this method) before pumping into the nearest klong. The septic tank has to be emptied every 3 or 4 years.

So there are pipes taking the liquid away. When it rains heavily some of these sewers back up and you can literally see water gushing out of the drains on the streets. This is especially a problem at the intersection of Huay Kaew and Siri Mangkhlachan, where the expensive Palm Springs condos are being built.

Is this liquid waste treated in any way before being drained into the sewers?

After thinking about how some of the klongs smell, I think I know the answer.

This all started with my claim that the existing infrastructure, including sewage, is already stressed and could be pushed to the breaking point by all the new development. I haven't read anything that makes me reconsider that claim.

[JB300]

use it or similar so we can rip your calcs apart properly http://www.editgrid.com/

edit: here bcause ur are all to lazy: http://www.editgrid.com/user/cmcondo/CMCondo

read/write access fixed

http://www.editgrid.com/user/cmcondo/CMCondo

history so what you write can still be seen if it gets changed

http://www.editgrid.com/property/history/list/7035824

Not sure if this was aimed at my "Calcs" but I'm happy with my maths thanks (to be honest it represents less than 15% of what I'm concerned about)

But I will check out the links (knowledge gained is less mistakes made) so thanks again

Edit: sorry there's no way I'm uploading the spreadsheet I use as it has personal details about my bank balances, shareholdings, pensions & even predicted redundancy payments.

If you'd like me to cut out the property part (assumptions I've stated should cover it) then can look into doing that.

Looked at doing this, but because I've done my calculations backwards (have worked out how much money I would need to have xxxx amount each month, split that across expenses to see how much more I need to save) it's tricky to do.

FWIW, here's how much I calculated I'd need for the next 11 years 9 months assuming inflation goes up by 5.3%pa & is applied at the start of the year (e.g if I need £1,000 in year one, I would need £1,053 in y2, £1,108 in y3 etc...)

£500 = £96,536

£750 = £144,804

£1,000 = £193,072

£1,250 = £241,340

£1,500 = £289,609

£1,750 = £337,877

£2,000 = £386,145

£2,250 = £434,413

£2,500 = £482,681

£3,000 = £579,218

Subtracting £60,000 from these (I.e B3M Condo) and I would have approx £318/B17K less per month to spend.

Then subtract Condo Fees (say B3,000 per month) General maintenance costs (Say B5,000 per month) & lost opportunity costs of not having the £60,000 invested (say at 2% = approx B5,000 per month) and the difference becomes more like B4K per month.

Obviously at the end of the 11 years 9 months I would own the Condo, but renting I would still have the £60,000 (adjusted for any compound interest gains) so financially it does feel like a wager on whether you believe the property market is going to go up or down over that term.