Property....Buy to Let........

[chiangrai]

Hi,

I 'm thinking of buying a property in Chaing Rai and renting it out but I want to get an idea of the market first.

Do you think I should buy a property for Thai tenants or expat tenements.

What kind of places are the expats living in and what would they prefer to live in.

In town or out of town,house or condo,is there a good property manager in town..........etc.

I would love to get some feed back on this..........

[AjarnP]

The length of a piece if string can be calculated by taking half it's length and multiplying by two.

It depends very much on what your investment layout is going to be. Most expats seem to have an aversion to living more than spitting distance from town despite the fact that on most days even a 25km commute takes less than half an hour. Rents on expat housing vary from as little as 5K to as much as 25K depending again on location and standard.

I honestly don't see a rental market for Thai folks outside student accommodation units near MFLU

Good luck

[pomchop]

Being a landlord most anywhere can have a LOT of challenges especially for an absentee owner. I have heard about every lie a tenant could dream up in the usa over the years and suspect CR would be no different or perhaps even worse. Unfortunately there are a lot of tenants who will wreck your property and do their best to skip out without paying and naturally you end up holding the bag.

If there are good property managers in CR I don't know who they are. I have had a difficult time even hiring someone halfway responsible to take care of the yard when I am gone for several months. They all talk a good game but when I return it is usually to some kind of mess with a combination of overgrown weeds and/or dead good plants.

Having said all of that I suppose it is possible to rent out some apts or even houses but I suspect that if you do not live year round in CR nearby to keep an eye on it that it could well be more of a nightmare than a dream.

[villagefarang]

To hear people talk, you would think real-estate is a surefire way to make quick easy money. They can always point to someone who made a killing, not too dissimilar to the guy who once won the lottery.

You need to remember you are up against Thais with better contacts, other deep pocket Asians who cater to their own growing populations and of course those who are trying to launder their drug money or other illicit gains.

Unless you really know what you are doing and have a lot of risk capital to play with, I would think there are safer ways of investing.

[toybits]

Unless you have a dorm or serviced apartment, earning money from renting detatched homes or shop houses is not worth it. Dorms or serviced apartments, on the other hand have corresponding maintenance headaches - e.g. leaky faucets, busted air-conditioner, clogged drains, etc.

[chiangrai]

right,

And how do you feel about what the estate agents say about buying a condo in a build up areas(Bangkok,Chiang Mai)..They say you can get 13% return of investment and hire a property manager..

I'm looking into this because I just read the book "how to start a successful business in Thailand"and he says it's possible to buy 5 condo's in Chiang Mai and make 50K a month on them.He even recommends an estate agent to deal with.

I'm not saying he's right i just want to find out if this is true or too good to be true.

Thanks for your advice so far.

[onthedarkside]

"They say you can get 13% return of investment" - you would expect property agents to say that as they just want to sell. 13% ROI is very hard to make these days.

"hire a property manager.." - best of luck with that. Too many useless managers on offer. Even if you find a good once then there won't much much left of you hoped for 13%

[worgeordie]

Would not recommend buying property to let at the moment,

after the 97 crash,we had to move out of cash and buy

property ,as the interest rates were falling fast.

We managed to buy some houses at good prices,after

modernizing them to a good standard,they rented well,

and we were getting average returns of 12%,the houses

all paid for themselves in 10 years.plus if sold i am sure

could return a good profit,as they are in good area of

Chiang Mai.

Houses should be cheaper up in Chiang Rai,but i dont

think you will find any bargains,if you pay too much the

returns will be poor.and maybe not worth it.

There has been a big change in property rentals down

here in Chiang Mai,at the moment there are 8 houses

for rent,vacated by Farangs in the last few months,

in our Moo Bhan,it has never been like this before.

Would not recommend renting to Thais,even if they say

they can pay the rent asked,we have only rented twice

to Thais,both times cost us money,the last tenant made

off with all the curtains and 3 solid teak doors!

Unless you get get some really good bargains in a decent

part of Chiang Rai,better not to bother,the returns will not

be worth the hassle and headaches.

regards worgeordie

[chiang mai]

Rents in CR are lower than CM plus there's an oversupply of property for sale, much of which is for rent also, check out a couple of local sites and look through the listings. We've been up there twice in the past four weeks looking at property, there's a lot on the market.

[chiangrai]

O.K,

So two people that have tried it.

I would only buy something if the maths worked out.

One thing that would put me off is the smokey season and farangs moving out of CM/CR.

Neither of you seem to have used property managers.

What do you think of the buy a condo in Bangkok or Phuket and use a farang property manager thing that is recommended by some people.

The guy that wrote the book was an accountant.

I'm not arguing that he's right.Just curious......

[chiang mai]

I wouldn't trust a farang company to manage anything for me in Thailand.

[worgeordie]

O.K,

So two people that have tried it.

I would only buy something if the maths worked out.

One thing that would put me off is the smokey season and farangs moving out of CM/CR.

Neither of you seem to have used property managers.

What do you think of the buy a condo in Bangkok or Phuket and use a farang property manager thing that is recommended by some people.

The guy that wrote the book was an accountant.

I'm not arguing that he's right.Just curious......

You must control everything yourself,its not wise or easy to trust

people here you don't know,I think it could be the same situation

all over Thailand,the bank rates been so low people have moved

into buy to rent,so you have an oversupply on one hand and less

tenants on the other,plus cost of houses are out of control,theres

a glut,but prices don't come down,thats what different in Thailand

compared to the West,

The problem is theres not much else to invest in,especially if you

don't want risk,also inflation is eating into your capital everyday.

regards Worgeordie

[chiangrai]

O.K,

Thanks for the advice.

I will look into being an absentee landlord with property in Europe but even then one trip home a year would take a lot off the profit.

I like to live remote into the mountains in Thailand so whatever I get into it must be manageable from home.

What does that leave......an annuity?Betting that an insurance company wont "expire" before I do

[AnotherOneAmerican]

right,

And how do you feel about what the estate agents say about buying a condo in a build up areas(Bangkok,Chiang Mai)..They say you can get 13% return of investment and hire a property manager..

I'm looking into this because I just read the book "how to start a successful business in Thailand"and he says it's possible to buy 5 condo's in Chiang Mai and make 50K a month on them.He even recommends an estate agent to deal with.

I'm not saying he's right i just want to find out if this is true or too good to be true.

Thanks for your advice so far.

A friend of mine does this in CM.

He bought 2 condos for 950k, rents them out for 3k5 each a month.

1 month management/agent fee, 1 month repairs, 10 months income ..... 35k, assuming rented all year round.

(4k a month if you can find a new foreigner to sign a 1 year contract)

Very small condos in a run down apt. block.

Not sure I would want to do it.

Return of about 7%.

13% sounds way high!

Edited September 10, 2014 by AnotherOneAmerican

[Rotweiler]

I think it is time to bring some reality into the picture.... This is NOT NYC. It is not even Bangkok.

The real estate investors in this area have VERY deep pockets - intented for the very long term investment. To assume a ROI of over 10% is a joke. It will not happen. An ROI of 1-2% is considered realistic in CR. That is - assuming you have NO plumbing/electrical/structural issues. AND assuming no one at the land office hits you up because you are obviously faking ownership

Now if you own a coffee shop, a whole new set of investment criteria come into play - average is (-) 3% per year.

Rubber farm? (-10%/annum); rice (-20%/annum).

Welcome to Thailand

[AjarnP]

I think it is time to bring some reality into the picture.... This is NOT NYC. It is not even Bangkok.

The real estate investors in this area have VERY deep pockets - intented for the very long term investment. To assume a ROI of over 10% is a joke. It will not happen. An ROI of 1-2% is considered realistic in CR. That is - assuming you have NO plumbing/electrical/structural issues. AND assuming no one at the land office hits you up because you are obviously faking ownership

Now if you own a coffee shop, a whole new set of investment criteria come into play - average is (-) 3% per year.

Rubber farm? (-10%/annum); rice (-20%/annum).

Welcome to Thailand

Here speaketh the truth, the whole truth and nothing but the truth.

Wise words!

[villagefarang]

OP, I see from your posting history, that you have come into some money recently and you are trying to figure out what to do with it. Just a suggestion, but since this is relatively new to you, it might be a good idea to focus on capital preservation instead of jumping immediately into trying to maximize your return.

Try to learn as much as you can, and as you have done here, try to get a wide variety of opinions before putting your money at risk.

[boomerangutang]

I agree with some of the posts which advise being wary of 'property managers.'

It's tough enough taking care of property-related things when you're on the scene daily, with a pick-up truck and fix-it skills. Whether Thai or farang or New Caledonian, it's not advised to have someone else watching out for your far-away property. Actually, I met a New Caledonian recently, spoke French, very decent fellow.

[worgeordie]

Well i thought we would be in for a long wait to rent one of our

vacant properties this time,lots more houses on the market and

less Farangs looking(would never rent to Thais again),i had the

house listed on 6 sites in Thailand,not a peep in last 6 weeks,

more inquiries have came from the signs on posts and front

gate.

The house is unfurnished,so looking for special person with

own furniture,had a family come to view today,and while they

were looking it over, another family arrived,also just what they

were looking for, so offered it to first arrivals and they took it

paid deposit and first month.

So we felt very lucky today,even bought lottery ticket,maybe.....

regards worgeordie

[chiangrai]

So what I've learned from this post is that the the advice that people give about the recession being the best time to get into property is not true for Europe anymore because everybody has gotten into property by now.

And it's not true for Thailand because the house prices don't go down when there is a glut in the market.Why is that............

I know a guy with houses in France and Ireland who makes a living from them without ever doing much more than visiting the properties once a year

But maybe he's an exception.

[JoeyDaRench]

I've found, at least in Chiang Rai, that the land/houses are terribly overpriced and WHEN they don't sell (not IF they don't sell), they simply raise the price. Go figure.

Also, the rents here in NO way reflect the price (or at least the asking price) of the house. You can rent a 12 million baht house for less than 30K a month. From that,

the owner has expenses and costs. Probably lucky if they earn 2% of their investment price per year. Doesn't seem to be a good deal to me. And for being a landlord,

my personal experience having 10 houses in the US as rentals, over 85% of my tenants thought it was their God-given right to destroy my house. And don't believe

for a minute that it will be different here. Every house belonging to a middle class to semi-wealthy Thai that I've been in is filthy and terribly maintained. That's simply

the normal way of life here for most (at least that I've seen). The few homes I've been in belonging to wealthy Thais have been impeccable. But, I would assume

there are not too many wealthy Thais that will be renting a house. Yes, you could do all this and hopefully the property value will increase to offset all of the above.

That's what I believed in the US. Got my clocked cleaned, lost 30%. Bad timing on my part. It's the chance you take.

It's not a chance I'll ever take again.