Sell or rent?

[Urloc]

This is the thing. I bought a small townhouse in Lat Lum Kaeo, near Pathum thani. The cost 3 years ago was 800k THB with a good deal of furniture. I personally knew the owner of the house, he was a construction worker, and he had the house in an excellent condition. He built the kitchen (western style) in the backyard and also placed some roof in the main entrance so no sun there. This roof has the same tiles as the main roof and it is not looking like the usual botch you see here.

I am about to move to a small Isaan village, where I spent a lot of time lately and my inlaw family live there. I already built a much bigger and better house there so, no need for the old one. The question is, should I sell or should I rent it?

The area where I have the townhouse has really improved in 3 years. There are many industries opening near and construction projects around. I have been researching and houses are being sold per 1M around the area without kitchen, any roofing in the entrance, no aircons (mine has 2) and no furniture (mine is fully furnished with decent quality ones). Even the applicances will stay including 2 TVs, being the smaller 42". So I guess I can get 1.4M or the alike.

On the other hand, renting in the area is cheap, around 5-6k per month but again, in an empty house with no extras. I may get more but I amnot so sure about renting a house with all that furniture just to find out most things are broken after the tenant leaves.

And the final option is to just shut the door tight and let it there, but I am not sure how good is that going to be. Having a closed house for years is not the best thing to do, even less with furniture, appliances etc...

My first idea is sell, but then there is the improvement of the area. It keeps improving. Big C's opened around the area, new markets and as I said before, more and more construction projects. The skytrain is being built around 15km away from my home as well. Waiting for the area to bloom more may be a good idea too.

Any ideas?

[ldnguy]

Personally I'd sell it. I don't see the point of renting for so little return, and it will be a real hassle if there are problems and you live so far away. Trips back to get new tenants and sort out problems will wipe out the rental income and more. Just leave it be and it might get broken into and trashed. Realistically, how much do you think it will increase in value over 5-10 years or however long you plan to keep it? Depends how much money you have, what profit you want, etc. I just couldn't be bothered with the hassle just to make a couple hundred K baht. There are much easier ways to make money.

If others are selling for 1m, I doubt you'll get 1.4m. Are the improvements really worth that much? For that price range I think most would rather the 1m unimproved house.

[Gonsalviz]

If it's paid for, sell it.

[Urloc]

Personally I'd sell it. I don't see the point of renting for so little return, and it will be a real hassle if there are problems and you live so far away. Trips back to get new tenants and sort out problems will wipe out the rental income and more. Just leave it be and it might get broken into and trashed. Realistically, how much do you think it will increase in value over 5-10 years or however long you plan to keep it? Depends how much money you have, what profit you want, etc. I just couldn't be bothered with the hassle just to make a couple hundred K baht. There are much easier ways to make money.

If others are selling for 1m, I doubt you'll get 1.4m. Are the improvements really worth that much? For that price range I think most would rather the 1m unimproved house.

The improvements are quite worth. Usually these houses (the whole village has the same houses) come with a backyard without a roof. This backyard has been tiled, roofed with real rooftiles (not some metal planks as usual) and the walls have been raised so there is an extra room instead of an empty backyard. This extra room is a kitchen fully equipped with cabinets, fridge, stove, washing machine and pump. Houses without a pump don't get much water in the second floor. Also the entrance to the house is normally a concrete floor and that's it. This house has a full roofing and the floor is tiled with outside tiles. Besides the improvements, I am going to sell it fully furnished in all rooms including TVs and 2 aircons. TVs are old LCDs but still one is 42" and the other 50", not the usual thing seen in the area so it surely catches the eye.

I am not sure how much they can raise in the area in 5-10y but this area is growing a lot. But probably you are right, if i just shut it and neglect it, probably is going to get trashed and lose value. My first idea was to sell but wanted the oppinion of some farangs, as Thais usually tell me "keep it for your son".

[casualbiker]

Your kitchen and front roof would cost a maximum of 50,000b to build new (presuming excellent build)

Your TVs and furniture would be about another 50k.

So maybe 1.1 million. If you can sell. Don't forget many Thais prefer new to 2nd hand.

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[PattayaPhom]

Being so far away and the small rental returns plus the inconvenience, sell would be the preffered option for me. Didnt Phatum Thanni suffer bad flooding a few years ago, are you in a flood free zone? Consider that the local industries that you say are being built will employ staff on a Thai wage, their budget for purchasing a property will be restricted so a ceiling price will be inevitable.

[Urloc]

Your kitchen and front roof would cost a maximum of 50,000b to build new (presuming excellent build)

Your TVs and furniture would be about another 50k.

So maybe 1.1 million. If you can sell. Don't forget many Thais prefer new to 2nd hand.

Sent from my XT1032 using Thaivisa Connect Thailand mobile app

Actually my neighbor paid 100k just for the front roof with the same quality (it is not the lame metal planks) and the kitchen is western style, not just a stove. 50k may be the furniture of the living room without even counting TVs or aircons. I don't buy IKEA stuff common...

If you can get a constructor for these prices, tell him to come over the area, he is gonna work for life.

[Urloc]

Being so far away and the small rental returns plus the inconvenience, sell would be the preffered option for me. Didnt Phatum Thanni suffer bad flooding a few years ago, are you in a flood free zone? Consider that the local industries that you say are being built will employ staff on a Thai wage, their budget for purchasing a property will be restricted so a ceiling price will be inevitable.

Yes, definitely will sell. And yeah, the whole village got flooded except the last 2 sois (mine is in them), which happen to be 3-4 feet above the rest. No water came into my house, just a bit in the entrance.

New projects around the area are priced around 2.5M for townhouses or 1.6M for condos.

[Pib]

Sell...don't put up with the possible headaches of renting, especially in Thailand.

[JacChang]

Urloc

You need to do some market research of property in your area. You said that the place is starting to get developed. But in what sense? Industrial? If industrial, sell it.

Also, what will your house be used for, residential or for shop? Of course, the question is not directed at you, but where do you see your potential tenant being? This will be dependent on your location and such.

You need to ask yourself, with regards to the market going forward, will your house/land continue to increase in value? Will there be a high demand? Are there still a large availability of land available for developers to rush in and build more houses? This will all affect the demand for your house. Like others have stated, most people like new houses. They wont care how much you spend on your house, that's your cost, not their concern.

You stated 5,000 to 7,000 rent. That in my opinion is high already. I would gladly invest in that without any problems as an investor.

6,000 THB x 12 = 72,000 7%-9% depending how much you consider your principal.

Take all of this into consideration, and I hope you make the best choice for yourself.

[ldnguy]

Your kitchen and front roof would cost a maximum of 50,000b to build new (presuming excellent build)

Your TVs and furniture would be about another 50k.

So maybe 1.1 million. If you can sell. Don't forget many Thais prefer new to 2nd hand.

Sent from my XT1032 using Thaivisa Connect Thailand mobile app

Many Thais may prefer new, but MOST Thais can only afford used. On my gf's moobaan the older houses are regularly bought and sold by Thais. That's even though there are plenty of new builds nearby. I think that Thais mostly buy new is a myth put about by some farangs who read it somewhere and so repeat it without knowing the facts.

[Robert24]

Depends on your circumstances. If you don't need the money from the Sale, I'd suggest to rent it out. You will get a decent return on your investment with the rent and the property is likely to further appreciate.

If you decide to sell, the question is how do you invest the proceeds from the sale. Do you buy another property, invest in the equity market, bonds or keep cash on your bank?

Personally I think it's probably not bad to stay invested and rent the place out. As mentioned, if you get 5-6% post tax/maintenance deduction, that's quite ok.

[belg]

so how can you buy a townhouse? are you thai or farang? if you are farang, in who's name did u buy it ?

[Urloc]

so how can you buy a townhouse? are you thai or farang? if you are farang, in who's name did u buy it ?

I am a farang. The house is under my future wife's name. Everything is under her name, including bank accounts which I could have but I prefer not to.

[BadBouy]

The nicest house on the street is always devalued because of the lesser priced homes around it. If it were me I would sell it, money in investments will do much better than tied up in a house and as others have mentioned no head aches. One bad tenet could cost you any profit you might ever make.I f you are not handy fixing thing and do not live near by chances of things going badly multiply. Good luck with what ever you decide.

[Danbit]

Here is a link to sale and rent of condoes in Chonbury, the sales price is about the same as when the condos was sold 20 years ago.

Nice location on a golf course with wiev of the bay and mountains located at Sukumit Road.

http://www.thaigolf.dk/thaigolf_prices.htm

[Ulic]

Sell, Sell, Sell. You definitely don't want to to be a landlord from a distance. Get what you can, make a few baht,

leave you troubles behind.

[USNret]

The OP clearly has unrealistic expectations of profit & value. Like so many other would-be sellers, he chooses to ignore valid inputs from outside sources and places an unreasonably high selling price. Thus, the house will sit unsold & unused while he waits for that "big profit" that never comes. Do yourself a favor: Please a realistic price on the house which seems to be about 1.1M, be grateful for any ROI you might get, and sell the place. Any other strategy will result in a downward spiral of expenses.

Most buyers compare price per square meter; all the other factors you mention of furnishings, roof, etc. get only a glancing look. Your strategy will make your house the most costly in the neighborhood so few if any will look at it. What you think these improvements are worth is of little import; what matters is what they are worth in the eyes of the beholder which is not nearly as much you as you think. In the end, only you can decide what course to follow.