Opinions on Phuket housing, prices, and the new "shoehorned in - future slum" housing estates.

[eisfeld]

You need to have recent, and several, comparative sales, in the same area, excluding any out of line sales, to be able to make an informed assessment of the value of the property, and to gauge the property market.

Very true and I would really like to get my hands on data like this but I have no clue where to look for it. Real estate agents probably wont give it out. Is there a central database somwhere? When people sell houses they have to file papers at some office for it so maybe this office would have real sale prices? I am toying with the idea of buying a property but the list prices are totally out of reality. So many properties that are for sale for many years with increasing prices, it's ridicolous.

[steelepulse]

Unfortunately there is no data like this as there is in most countries that are required to gather and make available this information. The best you can do is go to an area that you are interested in, find the local mom and pop minimart, and ask about houses for sale, what has sold recently etc. Preferably get a local Thai to ask around to get the real info as as a foreigner, you may or may not get the real story.

[xylophone]

Some good points made by posters here, and hopefully I will add a few more from my own personal experience in buying and selling two houses here in Phuket.

As NamKangMan has said, whatever prices are on the other houses if they are not selling, is totally meaningless. As for the valuation by the SCB, then I would very much doubt this is the case as the two properties which I sold for over 5 million baht, originally sold at 3 million when built seven years previously, had hardly increased in value according to the land office and the solicitors handling the sale!!! As someone mentioned, brown envelopes here work wonders.

The first house I bought was about four years old and the asking price for this one and a couple of others in the street was over 5 million baht, however I negotiated a quick deal with the owner and bought it for 4 million baht. You see there is a big difference between the asking price and what someone will settle for after negotiations take place.

Now here's the rub........... I put some good hard work into it and spent money on it, and sold it for 5.25 million baht some 4 years later (making a good profit I may add, although that was not the original intention). This although there were several other houses in the same soi which were for sale at around the same price and some a little dearer.

Now three years later, my old house has been resold for, yes you have guessed it, 4 million baht!!! And yes, the other houses are still for sale at well over 5 million baht and some have been like that for seven years now.

The moral of this story is that the asking price is purely that and everyone will be open to negotiation provided they are carried out in a manner which allows both parties to benefit. Also, there will be different "values/valuations" put on the property by different folk, the seller, the real estate agent, the lawyer and of course the land office and bank, so don't be put off by "expensive valuations" because they are very much "finger in the air" stuff.

Finally, and someone else has mentioned this, it seems as if you are not keen on buying, so why do so? As several friends of mine have found out to their disgust, there is not a lot you can do in Thailand when someone decides to build a block of condominiums next to the house you thought was going your hideaway for life, nor can you legislate for noisy neighbours should someone decide to let the house next to you.

Good luck in whatever you decide, and hopefully you will have picked up some useful information from some good posts on this thread.

[illy]

Some good points and advise in this thread. I think the main thing we can take as gospel is that prices are inflated and the asking price/valuation has little to do with the actually WORTH of the property.

I have been researching/visiting many places and I have seen and found places in Phuket that I didn't know existed.

[NamKangMan]

Some good points made by posters here, and hopefully I will add a few more from my own personal experience in buying and selling two houses here in Phuket.

As NamKangMan has said, whatever prices are on the other houses if they are not selling, is totally meaningless. As for the valuation by the SCB, then I would very much doubt this is the case as the two properties which I sold for over 5 million baht, originally sold at 3 million when built seven years previously, had hardly increased in value according to the land office and the solicitors handling the sale!!! As someone mentioned, brown envelopes here work wonders.

The first house I bought was about four years old and the asking price for this one and a couple of others in the street was over 5 million baht, however I negotiated a quick deal with the owner and bought it for 4 million baht. You see there is a big difference between the asking price and what someone will settle for after negotiations take place.

Now here's the rub........... I put some good hard work into it and spent money on it, and sold it for 5.25 million baht some 4 years later (making a good profit I may add, although that was not the original intention). This although there were several other houses in the same soi which were for sale at around the same price and some a little dearer.

Now three years later, my old house has been resold for, yes you have guessed it, 4 million baht!!! And yes, the other houses are still for sale at well over 5 million baht and some have been like that for seven years now.

The moral of this story is that the asking price is purely that and everyone will be open to negotiation provided they are carried out in a manner which allows both parties to benefit. Also, there will be different "values/valuations" put on the property by different folk, the seller, the real estate agent, the lawyer and of course the land office and bank, so don't be put off by "expensive valuations" because they are very much "finger in the air" stuff.

Finally, and someone else has mentioned this, it seems as if you are not keen on buying, so why do so? As several friends of mine have found out to their disgust, there is not a lot you can do in Thailand when someone decides to build a block of condominiums next to the house you thought was going your hideaway for life, nor can you legislate for noisy neighbours should someone decide to let the house next to you.

Good luck in whatever you decide, and hopefully you will have picked up some useful information from some good posts on this thread.

Good post XP, but I woud pick you up on one thing, this: "making a good profit I may add."

Using today's figures, not historical figures, which would have illustrated my point even more, 4 million baht is approximately $124,000USD.

You said, "I put some good hard work into it and spent money on it" - to be accurate, I would have to know how much money you spent on it, but, being conservative, let's say you spent nothing at all on it.

$124,000USD in a long term bank fixed interest bank account, you could get around 4.2% p.a in today's market.

So, $124,000UD x 4.2% = approximately $5200USD per year.

Let's just say you take that interest as a monthy income, and do not compound it.

$5200 x 4 years that you held the property before selling is $20,800USB

$20,800USD is approximately 672,000 baht.

You sold the property for 5.25 million baht, which is 1.25 million baht more than what you purchased it for.

I would contend that is not what I would call "a good profit" for the risk and expense involved.

My reasons are this, you admit to spending money on it and providing your own "good hard work." The amount of money you spent would further decrease your profit, when compared to a totally no risk, no work, western bank fixed interest term account.

Your property may have required further maintanence within the 4 years you had the property, as we all know how poor the materials and construction techniques used here are.

You may have had to pay real estate agents fees for finding a buyer.

You were selling a property with 4 years less on it's 30 year farang land lease.

During the 4 years you owned it, anything could have been built near your property, possibly devaluing it, as there is no town planning here.

So, if we take into account the points I have mentioned, I don't think the profit to risk ratio is very good at all.

Don't get me wrong, you are one of the lucky ones to turn a profit here, good luck to you. Many did in the 90's, but those days are gone, and many are now left with a property they can not sell, or will have to see for lower than what the property has cost them.

Many properties have been on the market for years now, with the owner believing their property will eventually appeal to a particular foreigner, despite many new properties being built to compete with their property, not to mention more secondhand properties being put up for sale.

Compare that to putting the same captial in a decent fixed term, low risk, western bank account, and you can see trying to sell a property here now, for even a meagre profit, just isn't worth it, and remember, my figures didn't use compound interest, which would have seen your profit margin diminish even further.

Edited September 26, 2014 by NamKangMan

[KarenBravo]

In what currency can you get 4.2% interest per annum?

[iluvbeaches]

In what currency can you get 4.2% interest per annum?

In what country I would ask. Sign me up. Not anywhere in Europe, Us.

[stevehaigh]

that is exactly why (OP) i bought some land and built my own place.

[KarenBravo]

that is exactly why (OP) i bought some land and built my own place.

Ditto........

[NamKangMan]

In what currency can you get 4.2% interest per annum?

I'm with 5 banks, across 3 different continents.

This bank is one of the top four banks in Australia, so, it's in Australian Dollars. The Australian Government guarantees all deposits under $1 million.

http://www.westpac.com.au/personal-banking/bank-accounts/term-deposit/#s3

It's currently paying 4.15% - last I looked, it was higher.

They offer higher rates for deposits over $250,000AUD.

[NamKangMan]

In what currency can you get 4.2% interest per annum?

In what country I would ask. Sign me up. Not anywhere in Europe, Us.

See above post.

Australia.

[xylophone]

Some good points made by posters here, and hopefully I will add a few more from my own personal experience in buying and selling two houses here in Phuket.

As NamKangMan has said, whatever prices are on the other houses if they are not selling, is totally meaningless. As for the valuation by the SCB, then I would very much doubt this is the case as the two properties which I sold for over 5 million baht, originally sold at 3 million when built seven years previously, had hardly increased in value according to the land office and the solicitors handling the sale!!! As someone mentioned, brown envelopes here work wonders.

The first house I bought was about four years old and the asking price for this one and a couple of others in the street was over 5 million baht, however I negotiated a quick deal with the owner and bought it for 4 million baht. You see there is a big difference between the asking price and what someone will settle for after negotiations take place.

Now here's the rub........... I put some good hard work into it and spent money on it, and sold it for 5.25 million baht some 4 years later (making a good profit I may add, although that was not the original intention). This although there were several other houses in the same soi which were for sale at around the same price and some a little dearer.

Now three years later, my old house has been resold for, yes you have guessed it, 4 million baht!!! And yes, the other houses are still for sale at well over 5 million baht and some have been like that for seven years now.

The moral of this story is that the asking price is purely that and everyone will be open to negotiation provided they are carried out in a manner which allows both parties to benefit. Also, there will be different "values/valuations" put on the property by different folk, the seller, the real estate agent, the lawyer and of course the land office and bank, so don't be put off by "expensive valuations" because they are very much "finger in the air" stuff.

Finally, and someone else has mentioned this, it seems as if you are not keen on buying, so why do so? As several friends of mine have found out to their disgust, there is not a lot you can do in Thailand when someone decides to build a block of condominiums next to the house you thought was going your hideaway for life, nor can you legislate for noisy neighbours should someone decide to let the house next to you.

Good luck in whatever you decide, and hopefully you will have picked up some useful information from some good posts on this thread.

Good post XP, but I woud pick you up on one thing, this: "making a good profit I may add."

Using today's figures, not historical figures, which would have illustrated my point even more, 4 million baht is approximately $124,000USD.

You said, "I put some good hard work into it and spent money on it" - to be accurate, I would have to know how much money you spent on it, but, being conservative, let's say you spent nothing at all on it.

$124,000USD in a long term bank fixed interest bank account, you could get around 4.2% p.a in today's market.

So, $124,000UD x 4.2% = approximately $5200USD per year.

Let's just say you take that interest as a monthy income, and do not compound it.

$5200 x 4 years that you held the property before selling is $20,800USB

$20,800USD is approximately 672,000 baht.

You sold the property for 5.25 million baht, which is 1.25 million baht more than what you purchased it for.

I would contend that is not what I would call "a good profit" for the risk and expense involved.

My reasons are this, you admit to spending money on it and providing your own "good hard work." The amount of money you spent would further decrease your profit, when compared to a totally no risk, no work, western bank fixed interest term account.

Your property may have required further maintanence within the 4 years you had the property, as we all know how poor the materials and construction techniques used here are.

You may have had to pay real estate agents fees for finding a buyer.

You were selling a property with 4 years less on it's 30 year farang land lease.

During the 4 years you owned it, anything could have been built near your property, possibly devaluing it, as there is no town planning here.

So, if we take into account the points I have mentioned, I don't think the profit to risk ratio is very good at all.

Don't get me wrong, you are one of the lucky ones to turn a profit here, good luck to you. Many did in the 90's, but those days are gone, and many are now left with a property they can not sell, or will have to see for lower than what the property has cost them.

Many properties have been on the market for years now, with the owner believing their property will eventually appeal to a particular foreigner, despite many new properties being built to compete with their property, not to mention more secondhand properties being put up for sale.

Compare that to putting the same captial in a decent fixed term, low risk, western bank account, and you can see trying to sell a property here now, for even a meagre profit, just isn't worth it, and remember, my figures didn't use compound interest, which would have seen your profit margin diminish even further.

Hi NamKangMan, although you raise some fair assumptions in your post, I think it's important to realise that with investments, for example, some people go into various investments for various reasons. Certainly I didn't go into this house purchase to make a profit, more to give myself something to do in "doing it up" because I was bored, and to have it looking exactly as I wanted it to, because after all I was going to live there. On that point, I really enjoyed that aspect and any other maintenance which was done, which I carried out and thoroughly enjoyed as well, so I put no cost on it, rather it gave me something to look forward to and a hobby if you wish.

There was never any possibility of apartments or likewise going up either side of it because it was in a small Soi of established houses, so that was never a consideration.

And to try and put things into a broader perspective as regards my investments, I already have investments overseas in corporate bonds which are paying 7.75% pa (tax-free), and two others which were paying around 8% per annum tax free, which are about to be reset. Then I have some "emergency" (short term--easy to access) money in a normal bank account returning me about 3% tax-free. So you can see I have a fair spread, and I should do because although I started off my career as an engineer, I converted to other fields later on and ended up starting and running the investment division of a major bank.

You also mention a return of 4.2%, and to get that one would have to pay tax on the gross amount which would take that up to about 5.6% in most countries and in general that is very hard to get, or has been since the GFC.

Back to the house scenario, and in owning the place for four years, I saved myself 1.3 million baht in rent, a few more thousand in paying electricity charges direct to the government rather than a middleman and of course I was able to get it looking just as I wanted it to.

I did not use a real estate agent to sell it, so there were no real estate agent fees (I did the marketing of it myself) and it makes no difference how many years were left on the lease, because I sold it with that in place and the purchaser had no problem with it.

Once it was sold, I repatriated the money back to my home country and made just about 400,000 baht on the currency exchange. So you can see that taking everything into consideration I do believe I did make a "good profit" but having said that, what is a good profit to one person may not be to another, however the whole exercise was a learning experience, and although I did go on to part own another property and do exactly the same with it, making a small profit on this, I have experienced the marketplace and what is going on now, and I certainly wouldn't do it again!

[NamKangMan]

that is exactly why (OP) i bought some land and built my own place.

Happy to hear what part, or parts, of my post you disagree with, steve.

[AJBangkok]

Some good points made by posters here, and hopefully I will add a few more from my own personal experience in buying and selling two houses here in Phuket.

As NamKangMan has said, whatever prices are on the other houses if they are not selling, is totally meaningless. As for the valuation by the SCB, then I would very much doubt this is the case as the two properties which I sold for over 5 million baht, originally sold at 3 million when built seven years previously, had hardly increased in value according to the land office and the solicitors handling the sale!!! As someone mentioned, brown envelopes here work wonders.

The first house I bought was about four years old and the asking price for this one and a couple of others in the street was over 5 million baht, however I negotiated a quick deal with the owner and bought it for 4 million baht. You see there is a big difference between the asking price and what someone will settle for after negotiations take place.

Now here's the rub........... I put some good hard work into it and spent money on it, and sold it for 5.25 million baht some 4 years later (making a good profit I may add, although that was not the original intention). This although there were several other houses in the same soi which were for sale at around the same price and some a little dearer.

Now three years later, my old house has been resold for, yes you have guessed it, 4 million baht!!! And yes, the other houses are still for sale at well over 5 million baht and some have been like that for seven years now.

The moral of this story is that the asking price is purely that and everyone will be open to negotiation provided they are carried out in a manner which allows both parties to benefit. Also, there will be different "values/valuations" put on the property by different folk, the seller, the real estate agent, the lawyer and of course the land office and bank, so don't be put off by "expensive valuations" because they are very much "finger in the air" stuff.

Finally, and someone else has mentioned this, it seems as if you are not keen on buying, so why do so? As several friends of mine have found out to their disgust, there is not a lot you can do in Thailand when someone decides to build a block of condominiums next to the house you thought was going your hideaway for life, nor can you legislate for noisy neighbours should someone decide to let the house next to you.

Good luck in whatever you decide, and hopefully you will have picked up some useful information from some good posts on this thread.

Good post XP, but I woud pick you up on one thing, this: "making a good profit I may add."

Using today's figures, not historical figures, which would have illustrated my point even more, 4 million baht is approximately $124,000USD.

You said, "I put some good hard work into it and spent money on it" - to be accurate, I would have to know how much money you spent on it, but, being conservative, let's say you spent nothing at all on it.

$124,000USD in a long term bank fixed interest bank account, you could get around 4.2% p.a in today's market.

So, $124,000UD x 4.2% = approximately $5200USD per year.

Let's just say you take that interest as a monthy income, and do not compound it.

$5200 x 4 years that you held the property before selling is $20,800USB

$20,800USD is approximately 672,000 baht.

You sold the property for 5.25 million baht, which is 1.25 million baht more than what you purchased it for.

I would contend that is not what I would call "a good profit" for the risk and expense involved.

My reasons are this, you admit to spending money on it and providing your own "good hard work." The amount of money you spent would further decrease your profit, when compared to a totally no risk, no work, western bank fixed interest term account.

Your property may have required further maintanence within the 4 years you had the property, as we all know how poor the materials and construction techniques used here are.

You may have had to pay real estate agents fees for finding a buyer.

You were selling a property with 4 years less on it's 30 year farang land lease.

During the 4 years you owned it, anything could have been built near your property, possibly devaluing it, as there is no town planning here.

So, if we take into account the points I have mentioned, I don't think the profit to risk ratio is very good at all.

Don't get me wrong, you are one of the lucky ones to turn a profit here, good luck to you. Many did in the 90's, but those days are gone, and many are now left with a property they can not sell, or will have to see for lower than what the property has cost them.

Many properties have been on the market for years now, with the owner believing their property will eventually appeal to a particular foreigner, despite many new properties being built to compete with their property, not to mention more secondhand properties being put up for sale.

Compare that to putting the same captial in a decent fixed term, low risk, western bank account, and you can see trying to sell a property here now, for even a meagre profit, just isn't worth it, and remember, my figures didn't use compound interest, which would have seen your profit margin diminish even further.

If you looked at this from a cash flow basis of the owner then it's a different story. You should not forget that the owner lived 4 years rent free which depending on the rent - say B20,000 per month woukd have been worth an additional 960,000 over the period. If you want to be generous then you could say any interest return on the capital $5,200 would be paid out in equivalent rental expense then at the end of 4 years you only end up with your same capital ( not adjusting for inflation) but chances are that rental expense over the same period wouldhave exceeded $5,200 PA resulting in a loss of principal.

[KarenBravo]

In what currency can you get 4.2% interest per annum?

I'm with 5 banks, across 3 different continents.

This bank is one of the top four banks in Australia, so, it's in Australian Dollars. The Australian Government guarantees all deposits under $1 million.

http://www.westpac.com.au/personal-banking/bank-accounts/term-deposit/#s3

It's currently paying 4.15% - last I looked, it was higher.

They offer higher rates for deposits over $250,000AUD.

So, not only do you probably have to change currency and pay commission to the bank, you then take a currency risk (seen what the Aussie dollar is doing lately? Plummeting). Then after possibly losing a lot against the currency you started with, you have to change it back again with more commission payable. You will have lost more than 10% if you held A$ for the last two, or three years. It's gone from 33 Bt to 28 Bt.

Not exactly a "real-world" solution, now, is it?

You would have done better buying assets in Thai Baht.

[NamKangMan]

Some good points made by posters here, and hopefully I will add a few more from my own personal experience in buying and selling two houses here in Phuket.

As NamKangMan has said, whatever prices are on the other houses if they are not selling, is totally meaningless. As for the valuation by the SCB, then I would very much doubt this is the case as the two properties which I sold for over 5 million baht, originally sold at 3 million when built seven years previously, had hardly increased in value according to the land office and the solicitors handling the sale!!! As someone mentioned, brown envelopes here work wonders.

The first house I bought was about four years old and the asking price for this one and a couple of others in the street was over 5 million baht, however I negotiated a quick deal with the owner and bought it for 4 million baht. You see there is a big difference between the asking price and what someone will settle for after negotiations take place.

Now here's the rub........... I put some good hard work into it and spent money on it, and sold it for 5.25 million baht some 4 years later (making a good profit I may add, although that was not the original intention). This although there were several other houses in the same soi which were for sale at around the same price and some a little dearer.

Now three years later, my old house has been resold for, yes you have guessed it, 4 million baht!!! And yes, the other houses are still for sale at well over 5 million baht and some have been like that for seven years now.

The moral of this story is that the asking price is purely that and everyone will be open to negotiation provided they are carried out in a manner which allows both parties to benefit. Also, there will be different "values/valuations" put on the property by different folk, the seller, the real estate agent, the lawyer and of course the land office and bank, so don't be put off by "expensive valuations" because they are very much "finger in the air" stuff.

Finally, and someone else has mentioned this, it seems as if you are not keen on buying, so why do so? As several friends of mine have found out to their disgust, there is not a lot you can do in Thailand when someone decides to build a block of condominiums next to the house you thought was going your hideaway for life, nor can you legislate for noisy neighbours should someone decide to let the house next to you.

Good luck in whatever you decide, and hopefully you will have picked up some useful information from some good posts on this thread.

Good post XP, but I woud pick you up on one thing, this: "making a good profit I may add."

Using today's figures, not historical figures, which would have illustrated my point even more, 4 million baht is approximately $124,000USD.

You said, "I put some good hard work into it and spent money on it" - to be accurate, I would have to know how much money you spent on it, but, being conservative, let's say you spent nothing at all on it.

$124,000USD in a long term bank fixed interest bank account, you could get around 4.2% p.a in today's market.

So, $124,000UD x 4.2% = approximately $5200USD per year.

Let's just say you take that interest as a monthy income, and do not compound it.

$5200 x 4 years that you held the property before selling is $20,800USB

$20,800USD is approximately 672,000 baht.

You sold the property for 5.25 million baht, which is 1.25 million baht more than what you purchased it for.

I would contend that is not what I would call "a good profit" for the risk and expense involved.

My reasons are this, you admit to spending money on it and providing your own "good hard work." The amount of money you spent would further decrease your profit, when compared to a totally no risk, no work, western bank fixed interest term account.

Your property may have required further maintanence within the 4 years you had the property, as we all know how poor the materials and construction techniques used here are.

You may have had to pay real estate agents fees for finding a buyer.

You were selling a property with 4 years less on it's 30 year farang land lease.

During the 4 years you owned it, anything could have been built near your property, possibly devaluing it, as there is no town planning here.

So, if we take into account the points I have mentioned, I don't think the profit to risk ratio is very good at all.

Don't get me wrong, you are one of the lucky ones to turn a profit here, good luck to you. Many did in the 90's, but those days are gone, and many are now left with a property they can not sell, or will have to see for lower than what the property has cost them.

Many properties have been on the market for years now, with the owner believing their property will eventually appeal to a particular foreigner, despite many new properties being built to compete with their property, not to mention more secondhand properties being put up for sale.

Compare that to putting the same captial in a decent fixed term, low risk, western bank account, and you can see trying to sell a property here now, for even a meagre profit, just isn't worth it, and remember, my figures didn't use compound interest, which would have seen your profit margin diminish even further.

Hi NamKangMan, although you raise some fair assumptions in your post, I think it's important to realise that with investments, for example, some people go into various investments for various reasons. Certainly I didn't go into this house purchase to make a profit, more to give myself something to do in "doing it up" because I was bored, and to have it looking exactly as I wanted it to, because after all I was going to live there. On that point, I really enjoyed that aspect and any other maintenance which was done, which I carried out and thoroughly enjoyed as well, so I put no cost on it, rather it gave me something to look forward to and a hobby if you wish.

There was never any possibility of apartments or likewise going up either side of it because it was in a small Soi of established houses, so that was never a consideration.

And to try and put things into a broader perspective as regards my investments, I already have investments overseas in corporate bonds which are paying 7.75% pa (tax-free), and two others which were paying around 8% per annum tax free, which are about to be reset. Then I have some "emergency" (short term--easy to access) money in a normal bank account returning me about 3% tax-free. So you can see I have a fair spread, and I should do because although I started off my career as an engineer, I converted to other fields later on and ended up starting and running the investment division of a major bank.

You also mention a return of 4.2%, and to get that one would have to pay tax on the gross amount which would take that up to about 5.6% in most countries and in general that is very hard to get, or has been since the GFC.

Back to the house scenario, and in owning the place for four years, I saved myself 1.3 million baht in rent, a few more thousand in paying electricity charges direct to the government rather than a middleman and of course I was able to get it looking just as I wanted it to.

I did not use a real estate agent to sell it, so there were no real estate agent fees (I did the marketing of it myself) and it makes no difference how many years were left on the lease, because I sold it with that in place and the purchaser had no problem with it.

Once it was sold, I repatriated the money back to my home country and made just about 400,000 baht on the currency exchange. So you can see that taking everything into consideration I do believe I did make a "good profit" but having said that, what is a good profit to one person may not be to another, however the whole exercise was a learning experience, and although I did go on to part own another property and do exactly the same with it, making a small profit on this, I have experienced the marketplace and what is going on now, and I certainly wouldn't do it again!

A fair post XP.

I'm certainly aware there are higher yielding investments than 4.2% fix term investments, as I have some, but as I said in my post, all my figures were well on the conservative side. To use the higher figures would have further diminished your "profit."

If "doing up" your property was more of a hobby, I understand. However, I don't think many typical retirees settle on Phuket to "do up" a property. I would suggest they would be happy to do nothing, and enjoy not having to work for a change.

II suppose my post was just to confirm your last sentence, "I have experienced the marketplace and what is going on now, and I certainly wouldn't do it again!" As I said, "those days are over."

I was just offering up a totally risk risk, work free, income producing alternative to buying a property on Phuket, just to escape paying rent.

Buying a property here comes with more risks than many people may think, and I list some of them. The main ones, it's poorly constructed, and with poor materials, and will not appreciate in a way they many may think, and in fact, may not even be able to be sold, for years.

[NamKangMan]

In what currency can you get 4.2% interest per annum?

I'm with 5 banks, across 3 different continents.

This bank is one of the top four banks in Australia, so, it's in Australian Dollars. The Australian Government guarantees all deposits under $1 million.

http://www.westpac.com.au/personal-banking/bank-accounts/term-deposit/#s3

It's currently paying 4.15% - last I looked, it was higher.

They offer higher rates for deposits over $250,000AUD.

So, not only do you probably have to change currency and pay commission to the bank, you then take a currency risk (seen what the Aussie dollar is doing lately? Plummeting). Then after possibly losing a lot against the currency you started with, you have to change it back again with more commission payable. You will have lost more than 10% if you held A$ for the last two, or three years. It's gone from 33 Bt to 28 Bt.

Not exactly a "real-world" solution, now, is it?

You would have done better buying assets in Thai Baht.

I moved cash into Australia a long time ago, but I take your point.

How "liquid" is property on Phuket at the moment?

[KarenBravo]

I moved cash into Australia a long time ago, but I take your point.

How "liquid" is property on Phuket at the moment?

That depends on what price you sell the property for. If it's perceived as a bargain, it sells quick.

I have never had to wait longer than three months to sell any property here in Phuket because I have always priced it cheaper than the nearest equivalent.

The quickest was less than a week.

[steelepulse]

NKM, How does earning 4.2% as an expat help when the currency is down over 10% in a year? Sure it's OK if you plan on going back to OZ and never needing the money, but what if you are a pensioner and are losing on exchange rates?

http://www.xe.com/currencycharts/?from=AUD&to=USD&view=1Y

[NamKangMan]

Some good points made by posters here, and hopefully I will add a few more from my own personal experience in buying and selling two houses here in Phuket.

As NamKangMan has said, whatever prices are on the other houses if they are not selling, is totally meaningless. As for the valuation by the SCB, then I would very much doubt this is the case as the two properties which I sold for over 5 million baht, originally sold at 3 million when built seven years previously, had hardly increased in value according to the land office and the solicitors handling the sale!!! As someone mentioned, brown envelopes here work wonders.

The first house I bought was about four years old and the asking price for this one and a couple of others in the street was over 5 million baht, however I negotiated a quick deal with the owner and bought it for 4 million baht. You see there is a big difference between the asking price and what someone will settle for after negotiations take place.

Now here's the rub........... I put some good hard work into it and spent money on it, and sold it for 5.25 million baht some 4 years later (making a good profit I may add, although that was not the original intention). This although there were several other houses in the same soi which were for sale at around the same price and some a little dearer.

Now three years later, my old house has been resold for, yes you have guessed it, 4 million baht!!! And yes, the other houses are still for sale at well over 5 million baht and some have been like that for seven years now.

The moral of this story is that the asking price is purely that and everyone will be open to negotiation provided they are carried out in a manner which allows both parties to benefit. Also, there will be different "values/valuations" put on the property by different folk, the seller, the real estate agent, the lawyer and of course the land office and bank, so don't be put off by "expensive valuations" because they are very much "finger in the air" stuff.

Finally, and someone else has mentioned this, it seems as if you are not keen on buying, so why do so? As several friends of mine have found out to their disgust, there is not a lot you can do in Thailand when someone decides to build a block of condominiums next to the house you thought was going your hideaway for life, nor can you legislate for noisy neighbours should someone decide to let the house next to you.

Good luck in whatever you decide, and hopefully you will have picked up some useful information from some good posts on this thread.

Good post XP, but I woud pick you up on one thing, this: "making a good profit I may add."

Using today's figures, not historical figures, which would have illustrated my point even more, 4 million baht is approximately $124,000USD.

You said, "I put some good hard work into it and spent money on it" - to be accurate, I would have to know how much money you spent on it, but, being conservative, let's say you spent nothing at all on it.

$124,000USD in a long term bank fixed interest bank account, you could get around 4.2% p.a in today's market.

So, $124,000UD x 4.2% = approximately $5200USD per year.

Let's just say you take that interest as a monthy income, and do not compound it.

$5200 x 4 years that you held the property before selling is $20,800USB

$20,800USD is approximately 672,000 baht.

You sold the property for 5.25 million baht, which is 1.25 million baht more than what you purchased it for.

I would contend that is not what I would call "a good profit" for the risk and expense involved.

My reasons are this, you admit to spending money on it and providing your own "good hard work." The amount of money you spent would further decrease your profit, when compared to a totally no risk, no work, western bank fixed interest term account.

Your property may have required further maintanence within the 4 years you had the property, as we all know how poor the materials and construction techniques used here are.

You may have had to pay real estate agents fees for finding a buyer.

You were selling a property with 4 years less on it's 30 year farang land lease.

During the 4 years you owned it, anything could have been built near your property, possibly devaluing it, as there is no town planning here.

So, if we take into account the points I have mentioned, I don't think the profit to risk ratio is very good at all.

Don't get me wrong, you are one of the lucky ones to turn a profit here, good luck to you. Many did in the 90's, but those days are gone, and many are now left with a property they can not sell, or will have to see for lower than what the property has cost them.

Many properties have been on the market for years now, with the owner believing their property will eventually appeal to a particular foreigner, despite many new properties being built to compete with their property, not to mention more secondhand properties being put up for sale.

Compare that to putting the same captial in a decent fixed term, low risk, western bank account, and you can see trying to sell a property here now, for even a meagre profit, just isn't worth it, and remember, my figures didn't use compound interest, which would have seen your profit margin diminish even further.

If you looked at this from a cash flow basis of the owner then it's a different story. You should not forget that the owner lived 4 years rent free which depending on the rent - say B20,000 per month woukd have been worth an additional 960,000 over the period. If you want to be generous then you could say any interest return on the capital $5,200 would be paid out in equivalent rental expense then at the end of 4 years you only end up with your same capital ( not adjusting for inflation) but chances are that rental expense over the same period wouldhave exceeded $5,200 PA resulting in a loss of principal.

A fair point AJB, but $124,000USD isn't a lot of money, by western standards - the idea being, an individual would retire on a lot more capital, therefore, interest returns a lot higher, so no need to start using up the capital.

XP stated he did a lot of the work himself, but has not stated just how much the renovation cost him, then, we would have to take into account that not everyone is capable, or has the knowledge, of performing such a renovtion themselves, so they would have to outsource the work, further diminishing the profit made.

As XP mentioned, he wouldn't do it again, because he probably wouldn't make a profit again, even if he was lucky enough to be able to sell it.

On that basis, I gather XP is living off his cash investments, rather then getting into the Phuket property market, which I suggested in my post is a safer, and viable way to live here, with funds at call, at any time, should a need arise, rather than have your property sit on the market here for years, or, you sell it for less than what you purchased it for.

[KarenBravo]

NKM, How does earning 4.2% as an expat help when the currency is down over 10% in a year? Sure it's OK if you plan on going back to OZ and never needing the money, but what if you are a pensioner and are losing on exchange rates?

http://www.xe.com/currencycharts/?from=AUD&to=USD&view=1Y

Yes, maybe show-casing a way on how he lost money (if you spend Baht) is not such a great way to bring people around to your point-of-view.

Oh, forgot to add a couple of these..

[NamKangMan]

NKM, How does earning 4.2% as an expat help when the currency is down over 10% in a year? Sure it's OK if you plan on going back to OZ and never needing the money, but what if you are a pensioner and are losing on exchange rates?

http://www.xe.com/currencycharts/?from=AUD&to=USD&view=1Y

As I said, I'm with 5 banks over 3 continents, but I also have a property and share portfolio, also in different countries and on different continents.

As you know, if one goes down, in general, another tends to rise to offset the loss, thus, balancing the whole investment portfolio.

Many of these investments are paying more than 4.2% p.a. I used this as a very conservative base line for an example.

[NamKangMan]

NKM, How does earning 4.2% as an expat help when the currency is down over 10% in a year? Sure it's OK if you plan on going back to OZ and never needing the money, but what if you are a pensioner and are losing on exchange rates?

http://www.xe.com/currencycharts/?from=AUD&to=USD&view=1Y

Yes, maybe show-casing a way on how he lost money (if you spend Baht) is not such a great way to bring people around to your point-of-view.

Oh, forgot to add a couple of these..

KB, perhaps you would like to point out how buying a property on Phuket, these days, is a good "investment."

Oh, that's right, "rent is dead money."

So is a property that sits on land you don't own, is falling to bits, and you will never be able to sell, but I would be happy for you to present some figures and calulations.

If your post is good enough, you may be offered a job by The Absolute Group.

Edited September 27, 2014 by NamKangMan

[AJBangkok]

@NKM I don't disagree with you and I would absolutely agree that the current market is certainly not conducive to repeating what XP aheieved.

Right now its a buyers market in phuket. Frankly I'm shocked at the prices you can pick up a resale condo for. But even if you do buy at a distressed price the chances of flipping for a quick profit are virtually nil.

[xylophone]

@NKM I don't disagree with you and I would absolutely agree that the current market is certainly not conducive to repeating what XP aheieved.

Right now its a buyers market in phuket. Frankly I'm shocked at the prices you can pick up a resale condo for. But even if you do buy at a distressed price the chances of flipping for a quick profit are virtually nil.

All very true statements in my opinion. And as I said, I certainly wouldn't be doing it again because the market has changed quite markedly and that shows in the fact that although I sold the property for 5.25 million baht, it has recently resold for 4 million baht, and I know had I approached the owner direct I could have bought it for 3.75 million!!

In addition, as AJB has said, the chances of flipping it for a quick profit again are virtually nil, so why do it.

There was another aspect to my getting out of the property ownership market which I should mention, and that is that I had become slightly disillusioned with what was happening to this place and Thailand in general, especially as regards corruption and the fact that the government can change their minds about anything concerning expats etc, at a whim, thereby possibly disadvantaging expats living here.

I decided that I wanted to be free of any material ownership here, and should anything happen whereby I wanted to leave, I could do so in the space of hours by packing a suitcase and catching a flight out. I would simply give my car and motorbike to the ex g/f and go............no money tied up in property to worry about, and all of it invested in NZ and easily accessible.

As I have said in another thread, there are apartments/condominiums going up in Patong, where I live, at an alarming rate and a few of them seem to have stalled at this moment in time, so god only knows what is going to happen to them, and the investors who have bought off the plan?

There is a glut of apartments/condos waiting to come on the market, if not already here, there are two story/two-bedroom houses like the one I sold which have been on the market for five to seven years, and there are sure signs of a bubble in the property market when the "bigger fool" syndrome comes into play............you have every day working girls buying apartments off the plan because they are told they can on-sell them again, before completion and make a profit, or if you don't manage to do that then you can get 40,000 baht per month rental for a 34 m² box!!!!

I know some girls who have bought these apartments and I feel so sorry for them.

[KarenBravo]

NKM, How does earning 4.2% as an expat help when the currency is down over 10% in a year? Sure it's OK if you plan on going back to OZ and never needing the money, but what if you are a pensioner and are losing on exchange rates?

http://www.xe.com/currencycharts/?from=AUD&to=USD&view=1Y

Yes, maybe show-casing a way on how he lost money (if you spend Baht) is not such a great way to bring people around to your point-of-view.

Oh, forgot to add a couple of these..

KB, perhaps you would like to point out how buying a property on Phuket, these days, is a good "investment."

Oh, that's right, "rent is dead money."

So is a property that sits on land you don't own, is falling to bits, and you will never be able to sell, but I would be happy for you to present some figures and calulations.

If your post is good enough, you may be offered a job by The Absolute Group.

Excuse me, but, where have I stated that "buying a property on Phuket these days, is a good investment"?

I don't think it is a good investment. Better to rent.

The last property I purchased was in 1999, the land that is under the house I had built.

The difference between you and me NKM, is that I don't hold a hard and fast opinion like you. I'm flexible . You, on the other hand, have always been against buying because as you say (ad nauseum) you can't have your name on the land paper. And that's alright. You are a conservative investor.

I, on the other hand, whilst staying legal, didn't let that stop me and consequently, made money. Conditions changed and I changed my viewpoint. You missed the low hanging fruit NKM. The ROI I made would have made all the investments in your portfolio look veritably pedestrian. I, unlike you, was willing to take on more risk and got amply rewarded for it.

Eventually, when circumstances changed, I decided not to invest any more in property here.

I still own a house here. No rent to pay with no intention of ever selling. My reward for taking on more risk.

In the present, I only see one reason to buy a house and that is because you want to live in it, not as an investment.

When you keep on banging your drum about not buying property in Thailand, you are actually saying "Conservative investing is the only true and correct way to invest" and we both know that is wrong.

That's it from me NKM, I have nothing more to say (again) on this subject. Spare us all another chapter, or two of rebuttals.

Edited September 27, 2014 by KarenBravo

[NamKangMan]

NKM, How does earning 4.2% as an expat help when the currency is down over 10% in a year? Sure it's OK if you plan on going back to OZ and never needing the money, but what if you are a pensioner and are losing on exchange rates?

http://www.xe.com/currencycharts/?from=AUD&to=USD&view=1Y

Yes, maybe show-casing a way on how he lost money (if you spend Baht) is not such a great way to bring people around to your point-of-view.

Oh, forgot to add a couple of these..

KB, perhaps you would like to point out how buying a property on Phuket, these days, is a good "investment."

Oh, that's right, "rent is dead money."

So is a property that sits on land you don't own, is falling to bits, and you will never be able to sell, but I would be happy for you to present some figures and calulations.

If your post is good enough, you may be offered a job by The Absolute Group.

Excuse me, but, where have I stated that "buying a property on Phuket these days, is a good investment"?

I don't think it is a good investment. Better to rent.

The last property I purchased was in 1999, the land that is under the house I had built.

The difference between you and me NKM, is that I don't hold a hard and fast opinion like you. I'm flexible . You, on the other hand, have always been against buying because as you say (ad nauseum) you can't have your name on the land paper. And that's alright. You are a conservative investor.

I, on the other hand, whilst staying legal, didn't let that stop me and consequently, made money. Conditions changed and I changed my viewpoint. You missed the low hanging fruit NKM. The ROI I made would have made all the investments in your portfolio look veritably pedestrian. I, unlike you, was willing to take on more risk and got amply rewarded for it.

Eventually, when circumstances changed, I decided not to invest any more in property here.

I still own a house here. No rent to pay with no intention of ever selling. My reward for taking on more risk.

In the present, I only see one reason to buy a house and that is because you want to live in it, not as an investment.

When you keep on banging your drum about not buying property in Thailand, you are actually saying "Conservative investing is the only true and correct way to invest" and we both know that is wrong.

That's it from me NKM, I have nothing more to say (again) on this subject. Spare us all another chapter, or two of rebuttals.

Well, I'm under 50 years of age, retired, and living on Phuket full time.

I guess my "conservative" investments have served me well.

Like XP says, if Thailand goes pear shape, or the area I am living turns bad, I lose nothing. You call it "conservative" - I just call it smart.

No investment in Thailand is a good investment.