% Markup Properties compared to development costs

[Millenial]

Something that has always had me question the honesty in developers in Thailand,

Today we visited a architect cum developer in Trang whilst out doing our shopping just out of intrigue.

Anyway they showed us their designs etc, all really nice but the properties were 6/7 bedrooms and to say the least huge. (property boom here at the moment).

Anyway, we three a property at them to see whether they were trying to pull one as the property development costs were completely of the chart compared to properties we have already built, own or live in.

I went to google and checked Pattaya and came across this one,

Modern style 2 bedroom villa

Mountain Village 2 - is a modern cottage settlement situated in the southern part of Pattaya, in the prestigious area of Silver Lake.
The location is one of the main advantages of the village. You can stroll through the scenic vineyards, beautiful lake and a Mountain of the Golden Buddha. The place is ideal for a comfortable and family life at the highest level, away from the city bustle.
Another important advantage is the proximity with the world famous Nong Nooch Tropical gardens.
Mountain Village consists of 17 houses (Luxury Villas), made according to unique architectural projects in a contemporary style and includes 4 types of villas:

Modern style 2 bedroom villa

Code BAH19559 Area Baan Amphur Status For Sale. Type House Bedroom 2 Bathroom 2 Furnished Unfurnished Int size 116 sqm. Land size 331 sqm. Registered Company name Sale price

3,950,000 Bht

Anyway to cut to the short of it, we asked how much it would be for them to plan, develop and so on

Quote 3,700,000 Baht, Now bare in mind the above is priced at 3,950,000 Baht and is in Pattaya in a sought after area, with a beautiful lake view, where as ours is in Kantang on our own land and with our own Lake View.

#NO we did not show them the price in the information.

So aside from they were likely talking out of their arse, and most definitely trying to pull a fast one, it does beg the question on the the developers markups as previously (we have only built much bigger and hired burmese staff directly and paid 500baht per day and organised the materials ourselves). so it is not something we can calculate down.

But i would be interested to hear of other dealings in a similar fashion also the avg markup for developers etc.

[KittenKong]

Something that has always had me question the honesty in developers in Thailand.

There's no question about it: anyone involved in property sales in Thailand is probably as bent as a nine-bob note (or a three-dollar bill or whatever is not a real banknote in your home country).

Once you have understood that everything they say is lies, smoke and mirrors then you can move forward and start negotiating.

[beachproperty]

Am building presently.

Builder (and 6 cambodian workers) must be working for wages only as the cost is less than 10,000 baht/sq meter.....and this is with double walls, 12mm double pane windows, insulation and built in kitchens. You've indicated you've built before, so you must be aware of the costs and the pitfalls of dubious builders/developers etc.

Their markup is whatever they think they can get ....and if a Farang is involved, the amount of the markup probably goes up

[AnotherOneAmerican]

That would cost 500-600k to build yourself, say 1M if built for you by a company.

(not inc pool, as I don't know anything about pools)

I had one built for me last year by a developer in CM, just over 1.1M for 3 bed, 3 shower, 145M2.

Land was 700K.

Edited January 21, 2015 by AnotherOneAmerican

[Noi657]

Been round a few estates in Hua hin, saleswoman saying how wonderful the properties are built etc. After I've listened to all the dribble I slip in the "I'm a builder from the UK" then all of a sudden the quality talk starts to come down a peg or two! On an estate where I live, they seem to gain your trust, get your money and then couldn't give a toss! All this one year warranty is BS. Guy I know had some guttering installed from the developer, a few months later the joints started leaking/rusting he asked them to sort it out... They said that the company they used has gone bankrupt! Who gives a shit! He went through you! This is ongoing.

Another guy wanted to put a small 3x3 extension on the side of his house, he couldn't go independently because it would make "warranty" invalid, they charged him 300,000 baht plus roof!

Only advise I would give is listen to all the BS they give and then go home and take it all in.

I rent on this estate, i like the community around me, for me this is the only reason to ever want to buy.

We've spoken to a few Thais that live in the area and they are dumbfounded why anyone would spend 3/4/5+ million on a property with a small plot of land when you can buy a large plot and build a bigger house yourself.

[AnotherOneAmerican]

We've spoken to a few Thais that live in the area and they are dumbfounded why anyone would spend 3/4/5+ million on a property with a small plot of land when you can buy a large plot and build a bigger house yourself.

Less chance for people to steal from you.

(That includes your wife/gf/agent/builder/landowner, especially if you are a foreigner)

[Noi657]

We've spoken to a few Thais that live in the area and they are dumbfounded why anyone would spend 3/4/5+ million on a property with a small plot of land when you can buy a large plot and build a bigger house yourself.

Less chance for people to steal from you.

(That includes your wife/gf/agent/builder/landowner, especially if you are a foreigner)

Eviction Looms Over Expat Residents - Phuket Wan

phuketwan.com/property/eviction-looms-expat-residents-ritzy-phuket-estat...

26 Nov 2014 - Latest Residents of a classy housing estate on Phuket may lose their dream homes as negotiations stall between a developer now living in ...

[IMHO]

Am building presently.

Builder (and 6 cambodian workers) must be working for wages only as the cost is less than 10,000 baht/sq meter.....and this is with double walls, 12mm double pane windows, insulation and built in kitchens. You've indicated you've built before, so you must be aware of the costs and the pitfalls of dubious builders/developers etc.

Their markup is whatever they think they can get ....and if a Farang is involved, the amount of the markup probably goes up

I'm guessing you don't have too much glass then? double glazed 12mm windows cost about 10,000 baht per sqm on their own

[beachproperty]

Am building presently.

Builder (and 6 cambodian workers) must be working for wages only as the cost is less than 10,000 baht/sq meter.....and this is with double walls, 12mm double pane windows, insulation and built in kitchens. You've indicated you've built before, so you must be aware of the costs and the pitfalls of dubious builders/developers etc.

Their markup is whatever they think they can get ....and if a Farang is involved, the amount of the markup probably goes up

I'm guessing you don't have too much glass then? double glazed 12mm windows cost about 10,000 baht per sqm on their own

Your close ....but my cost is less than that for a 2 sqm panel of double glazed window.

[Millenial]

We've spoken to a few Thais that live in the area and they are dumbfounded why anyone would spend 3/4/5+ million on a property with a small plot of land when you can buy a large plot and build a bigger house yourself.

Less chance for people to steal from you.

(That includes your wife/gf/agent/builder/landowner, especially if you are a foreigner)

Eviction Looms Over Expat Residents - Phuket Wan

phuketwan.com/property/eviction-looms-expat-residents-ritzy-phuket-estat...

26 Nov 2014 - Latest Residents of a classy housing estate on Phuket may lose their dream homes as negotiations stall between a developer now living in ...

????

[KittenKong]

I'm guessing you don't have too much glass then? double glazed 12mm windows cost about 10,000 baht per sqm on their own

When I last checked the thickness of the glass made little difference to the cost. The big difference to the cost of windows/doors came from the quality and provenance of the frames (fancy imported ones being many times more expensive than local ones).

[PattayaPhom]

Been round a few estates in Hua hin, saleswoman saying how wonderful the properties are built etc. After I've listened to all the dribble I slip in the "I'm a builder from the UK" then all of a sudden the quality talk starts to come down a peg or two! On an estate where I live, they seem to gain your trust, get your money and then couldn't give a toss! All this one year warranty is BS. Guy I know had some guttering installed from the developer, a few months later the joints started leaking/rusting he asked them to sort it out... They said that the company they used has gone bankrupt! Who gives a shit! He went through you! This is ongoing.

Another guy wanted to put a small 3x3 extension on the side of his house, he couldn't go independently because it would make "warranty" invalid, they charged him 300,000 baht plus roof!

Only advise I would give is listen to all the BS they give and then go home and take it all in.

I rent on this estate, i like the community around me, for me this is the only reason to ever want to buy.

We've spoken to a few Thais that live in the area and they are dumbfounded why anyone would spend 3/4/5+ million on a property with a small plot of land when you can buy a large plot and build a bigger house yourself.

Because if you have ever overseen a project in Thailand you may understand why people will pay a "premium" for a completed unit.

[Noi657]

Been round a few estates in Hua hin, saleswoman saying how wonderful the properties are built etc. After I've listened to all the dribble I slip in the "I'm a builder from the UK" then all of a sudden the quality talk starts to come down a peg or two! On an estate where I live, they seem to gain your trust, get your money and then couldn't give a toss! All this one year warranty is BS. Guy I know had some guttering installed from the developer, a few months later the joints started leaking/rusting he asked them to sort it out... They said that the company they used has gone bankrupt! Who gives a shit! He went through you! This is ongoing.

Another guy wanted to put a small 3x3 extension on the side of his house, he couldn't go independently because it would make "warranty" invalid, they charged him 300,000 baht plus roof!

Only advise I would give is listen to all the BS they give and then go home and take it all in.

I rent on this estate, i like the community around me, for me this is the only reason to ever want to buy.

We've spoken to a few Thais that live in the area and they are dumbfounded why anyone would spend 3/4/5+ million on a property with a small plot of land when you can buy a large plot and build a bigger house yourself.

Because if you have ever overseen a project in Thailand you may understand why people will pay a "premium" for a completed unit.

Agreed... If you can't source the right builder and the materials yourself then a "premium" build is your only option.

[Millenial]

That would cost 500-600k to build yourself, say 1M if built for you by a company.

(not inc pool, as I don't know anything about pools)

I had one built for me last year by a developer in CM, just over 1.1M for 3 bed, 3 shower, 145M2.

homev08.jpg

Land was 700K.

Apologies, were you stating the above attached could be developed and built and interior fitted for 600k?????<deleted>?

[beachproperty]

That would cost 500-600k to build yourself, say 1M if built for you by a company.

(not inc pool, as I don't know anything about pools)

I had one built for me last year by a developer in CM, just over 1.1M for 3 bed, 3 shower, 145M2.

homev08.jpg

Land was 700K.

Apologies, were you stating the above attached could be developed and built and interior fitted for 600k?????<deleted>?

Well....looking at the pictures of the interior of the home you posted it looks no more than 70 sq. meters...with a 30 square meter porch (10 meters by 10 meters overall). Not sure what AnotherOneAmerican based his estimate on ....but going on what I just wrote ...I'd agree with him that if YOU build it yourself (self contract) you can build it to typical Thai specs. for 500-600k....and if you contract it out to a Thai builder (contractor) you'll pay anywhere from 8,000-10,000 baht a sq meter (or more if he gives you the farang price)...(800,000 to 1,000,000 baht).......

At least ....that's what you should pay at the most.

Edited January 22, 2015 by beachproperty

[AnotherOneAmerican]

That would cost 500-600k to build yourself, say 1M if built for you by a company.

(not inc pool, as I don't know anything about pools)

I had one built for me last year by a developer in CM, just over 1.1M for 3 bed, 3 shower, 145M2.

homev08.jpg

Land was 700K.

Apologies, were you stating the above attached could be developed and built and interior fitted for 600k?????<deleted>?

Well....looking at the pictures of the interior of the home you posted it looks no more than 70 sq. meters...with a 30 square meter porch (10 meters by 10 meters overall). Not sure what AnotherOneAmerican based his estimate on ....but going on what I just wrote ...I'd agree with him that if YOU build it yourself (self contract) you can build it to typical Thai specs. for 500-600k....and if you contract it out to a Thai builder (contractor) you'll pay anywhere from 8,000-10,000 baht a sq meter (or more if he gives you the farang price)...(800,000 to 1,000,000 baht).......

At least ....that's what you should pay at the most.

There are actually signs up all around SanSai/MaeJo 1001 at the moment of a developer selling 3 bed, 2 shower, houses (similar size to the OPs) for 980k including the land (it was 850k earlier this week, that's inflation for you)

There you go, build, land and developer profit (30-40%) for under 1M.(and a 2x more expensive roof than your spec from the photo)

Edited January 22, 2015 by AnotherOneAmerican

[Millenial]

Im not sure we are talking about the same property, so to reiterate.

http://www.towncountryproperty.com/houses/baan_amphur-house-19559.html

Price is 3,9m inc land. So your stating that the same property could be developed for 500k max 1m ?

[beachproperty]

Im not sure we are talking about the same property, so to reiterate.

http://www.towncountryproperty.com/houses/baan_amphur-house-19559.html

Price is 3,9m inc land. So your stating that the same property could be developed for 500k max 1m ?

I'll try to simplify for you.....

COST to build the house ....116 sq meters (which includes terrace area).....500,000-600,000 Baht....(Thai Standard built home)

COST of land....Who knows ...all land is different ...you say Pattaya with lake view, but small estate plot......probably worth no more than 1,000,000 baht

Total for house and land should be ....maybe..maybe...2,000,000-2,500,000 (giving developer a decent profit)

=

Builder is obviously gearing sales towards "farangs" as place is WELL overpriced at 3,700,000.

I was under the impression that you already owned land and was investigating as to what it would cost to build? Are you also Trying to "develop" your property into an estate with multiple homes.....Best thing to do then is just see what local homes go for and what local estates are selling homes for...that's your competition of what you'll be selling against if you decide to "develop a housing estate project".

[AnotherOneAmerican]

To OP,

House you show photo of is cheapest construction possible.

Flat roof = cheap. No way that would cost more than 500k to build.

Doesn't matter where in Thailand, built by unskilled Burmese workers on 150-200bht a day.

The only change in costs is the land, 80 TW in your house case, so 480k for the land (6k/tw) where I am.

Where you are, ask the land office.

Also the building costs depend on your nationality and how stupid you are.

If a white guy (non Thai speaking) trying to build in Thailand with a (thieving?) Thai wife, probably x4 a Thai developer.

Everyone would take a chunk out of you,

Edited January 23, 2015 by AnotherOneAmerican

[Millenial]

Hi apologies - I think the difference here and why I am shocked is your statement "thai standard".

As generally we go on the scale of insulated etc

thai standard generally has just one block width.

Which is where I got lost.

[beachproperty]

Hi apologies - I think the difference here and why I am shocked is your statement "thai standard".

As generally we go on the scale of insulated etc

thai standard generally has just one block width.

Which is where I got lost.

Not sure why the confusion.....I'm sure the home built on the estate in Pattaya is a single block wall, non-insulated.....ie Thai Standard.

Be that as it may...I am currently building and doing double walls with insulation, double pane windows, upgraded tiles and built in kitchen....COST ...9000 baht/sq meter

Hope this helps your confusion

Edited January 23, 2015 by beachproperty

[zierf1]

Expensive. I could probably build a house cheaper than that in the US. In fact, I could build a decent house in my home country for half that price. I'm sure of it.

Do the math. You are getting screwed.

[zierf1]

Probably only costs 1m to build. Developer sells them to foreigner sucker for 2-4x that amount. Chump foreigner thinks he's got a bargain.

[beachproperty]

Expensive. I could probably build a house cheaper than that in the US. In fact, I could build a decent house in my home country for half that price. I'm sure of it.

Do the math. You are getting screwed.

9000 baht a sq meter works out to less than $30/sq foot. If you could build a quality home in the US for that price you would be, but sure you can't do it for less than $100/sq foot, and more likely $200-$300/sq foot..

Maybe you should do the math....

Edited January 23, 2015 by beachproperty

[zierf1]

Expensive. I could probably build a house cheaper than that in the US. In fact, I could build a decent house in my home country for half that price. I'm sure of it.

Do the math. You are getting screwed.

9000 baht a sq meter works out to less than $30/sq foot. If you could build a quality home in the US for that price you would be, but sure you can't do it for less than $100/sq foot, and more likely $200-$300/sq foot..

Maybe you should do the math....

$50/sq foot. Besides, that doesn't look like a quality house to me anyways. Looks like a cardboard box.

[beachproperty]

Expensive. I could probably build a house cheaper than that in the US. In fact, I could build a decent house in my home country for half that price. I'm sure of it.

Do the math. You are getting screwed.

9000 baht a sq meter works out to less than $30/sq foot. If you could build a quality home in the US for that price you would be, but sure you can't do it for less than $100/sq foot, and more likely $200-$300/sq foot..

Maybe you should do the math....

$50/sq foot. Besides, that doesn't look like a quality house to me anyways. Looks like a cardboard box.

You obviously having a problem reading....I quoted 9000 baht /sq meter (less than $30/sq foot) for a custom home (reread my post to see the standard built to) . Having built stick buildings in the US I can tell you the quality of what I'm building in Thailand is much better than the US. Besides who would want to live in any "cardboard box" you could build for $50/ sq foot in the US

Oh well....as they say ones man dump is another man's mansion.

Edited January 23, 2015 by beachproperty

[trogers]

One cannot compare, by cost per sqm, between building a single house and a housing estate. The latter has infra-structure cost and professional fees.

Your one house in the province need only the input of a draftsman, and your own supervision.

[Millenial]

Its interesting as every house we have built, or bought has been significantly more, and to top it off, a smaller dwelling built in the area by a cousin of the wife cost 1.5 million baht

So thats Thai to Thai....

Not sure your figures are adding up, the wife did laugh though, considering she is paying for this dwelling (not the same attached but for an example).

[beachproperty]

Its interesting as every house we have built, or bought has been significantly more, and to top it off, a smaller dwelling built in the area by a cousin of the wife cost 1.5 million baht

So thats Thai to Thai....

Not sure your figures are adding up, the wife did laugh though, considering she is paying for this dwelling (not the same attached but for an example).

First off....buying implies you get the land and the house together......building implies cost to build a home

Glad your wife got a laugh but if you paid more than 10,000 baht/ meter for a Thai standard home to be built ....she should be crying as either she or you got ripped off!

As for the cousin building a smaller than 100 sq meter home for 1.5 million ....well that just goes to show you that Thai's will even rip off another Thai

As for my figures adding up.....what's to add up .....building a 565 sq meter complex with 5 bedrooms, 9 bathrooms and 4 small kitchens ....One building completely done ...the other 80%......Cost so far 3.850 million baht including 4 air conditioners, 8 water heaters, 2 water pumps, two water holding tanks, 2 septic system tanks.

Finished estimated cost .....1 million more baht. Total ....565 sq meters aprox 5 million baht= 8,850 baht/sq meter.

You do the math....and see who's laughing all the way to the bank!

Edited January 23, 2015 by beachproperty

[AnotherOneAmerican]

One cannot compare, by cost per sqm, between building a single house and a housing estate. The latter has infra-structure cost and professional fees.

Your one house in the province need only the input of a draftsman, and your own supervision.

It's usually a lot cheaper for the developer, than the single builder.

500 taps are half the price of 1 tap (per unit)

750 shower rooms are h1/3 the price of 2 shower rooms (per room)

Design costs, same for 1 house as 250 houses (all the same on many moobaans).

Same for all the building supplies, you can buy direct from the factory, not Home Pro.

Similar savings for electricity and water, running utils to 250 homes is way cheaper than running utils to 1 home (per home).

I mean really, what are you on to think 1 is cheaper than 250?

Edited January 23, 2015 by AnotherOneAmerican