Where Are Those Condo Projects Now?

[toptuan]

What's your point, wise guy???? Are you interested in buying them or are you just out to fish for info?....The problem is that the OP has no initiative, and expects to be spoonfed..."what are his intentions".

BackFlip & Naturalpoints, your type of responses are a wet blanket to the free-flow and friendly exchange of ideas on a forum such as this. So what if the OP wants the "Cliff Notes" version of the current status of condo projects? Let him ask! Maybe even someone will give him the summary (as some have done). Whats it to you?

A forum like this is as much about efficient and quick turn around of information as it is fun give-and-take and in a FRIENDLY WAY pointing people to some good sources of info. (as opposed to trying to shame them into it).

Stop attacking the messenger along with the message; live and let live.

Good grief, lighten up, guys!

Edited August 28, 2006 by toptuan

[number6]

Good grief, lighten up, guys!

Not only lighten up whats wrong with these xxxxxxxxxxxxx a guy asks a sensible question and

get bohunded derided etc for xxxxxxxx sake whats wrong with some people on TV - do they get pleasure from being rude agresive unhelpful or morel ikely their just stupid and should not be

responded to

I have 2 condos 2 houses so im not just fishing or whatever cras srubbish some of people here are saying but im interested in answer - just over 2 years ago i wanted to buy off plan in what i really liked - my thai lawyer advised against on basis of crash before and more importantly a lot of projects try it on and c who will bite before taking any real commitment - so you pay your deposit - sure u nearly always get that back but in meantime your not looking elsewhere - 1-2 years down line not enough takers it folds -

I went to revisit site of one i really was keen on and sales office had gone asking locals oh it went bankrupt - sure i would have had my deposit back it was a very well known and successful developer used by a lot of thias in know - i asked some i knew later and they said if it took off forang will double our money if not we get our deposit back says it all

So its a good question and in this hyped market doesnot happen so much

but people u grow up please

[thaigene2]

Thanks to all for the support. I think some people in the property game are getting a bit nervous - thus the snarky responses.

As for the info provided by thedude and teej - thank you so much for this. Especially the info on the Grade A versus Grade B. One of my main concerns is buying a place that ten years from now won't look like it's twice that old. Not sure how to really tell - short of watching the guy mix the cement! I also agree with number6 that buying near completion is much better than buying off plan (esp now), but evidently that means picking thru the leftovers...

Does anyone know about these two new developments called Harmony Living? One is on Suk Soi 15 and the other on Pahonyothin Soi 11 (only breaking ground now). The company marketing them is called The Professionals (www.professionals.co.th). Any reviews/advice?

[backflip]

thedude,

As a real estate professional, I'm surprised that you can't see that the OP is not going to buy. Don't real estate professionals refer to this type of non-buyer as a "lookie-loo"? He has brushed aside comments that everything he asked about is not available, and has asked yet another question...this time about a project that probably won't be finished in another 3 years. Doesn't that give you the slightest hint what's going on? The OP has no initiative, and you've just volunteered to be at his beck and call. Have fun!

Abusive comments deleted.

Astral

Edited August 30, 2006 by astral

[toptuan]

...the OP has no initiative, and you've just volunteered to be at his beck and call. Now that you've chimed in that you're here to do evetything possible to spend your time supporting the OP

I ask again: So? What's it to you? What's your problem?

Let him ask, and let others answer if they want. A forum is about a free exchange of information whether you are edified by it or not, or no matter what you think a person's motives are.

What's YOUR problem with it?

This kind of racial slur is what I would expect of a person who's used to alienating any one who doesn't see eye-to-eye with him.

By the way, forum rules: "3) Religious or racial slurs...will not be tolerated.

Dang it, where's a moderator when you need one?

Thanks

The comments have been deleted

Astral

Edited August 30, 2006 by astral

[think_too_mut]

No property in BKK is worth more than 400US sqm up to 600US$ in premium locations.

And there is no secondary market. Buy it and u are stuck lifetime with the worthless property.

Just check what some of this board (and other boards) members are paddling - their problems for sale, with river views, nobody wants to see, let alone buy.

Where are all those real estate "consultants" that plaqued this board before?

They might have changed their handles, but they are having no success.

The secondary market (farangs) has grown more concious.

[astral]

This is supposed to be a sensible discussion.

Lets keep it that way please.

Astral

Moderator

[thedude]

No property in BKK is worth more than 400US sqm up to 600US$ in premium locations.

And there is no secondary market. Buy it and u are stuck lifetime with the worthless property.

Just check what some of this board (and other boards) members are paddling - their problems for sale, with river views, nobody wants to see, let alone buy.

Where are all those real estate "consultants" that plaqued this board before?

They might have changed their handles, but they are having no success.

The secondary market (farangs) has grown more concious.

ttm your valuation is untenable. 600 usd psm only equates to less than baht 23,000 psm. grade A and B high rise construction cost alone in bangkok is in the range of 18,000 to 30,000 psm on a gross basis, depending on design and specs.

regarding secondary market, you are mostly correct, although a secondary market exists, it is not very active. however many of the newer wave of developments are now using professional managers like JLL, and improving buyer sophistication means we'd expect the general upkeep and value of good class condos to improve with time. the condition of the secondary market is not so much a problem with developers as it is with eventual condo owners who form the juristic body, it is in their vested interest to manage the property professionally and contribute to funds required to maintain and enhance the property's value.

there are also some well-located and well-managed developments that have appreciated with time, good examples being the freehold condos around the ploenchit area like Somkid Gardens, Lang Suan Ville, Grand Lang Suan, which were selling in the 60,000 to 70,000 psm range in the early 2000's and are now selling at around 95,000 to 110,000 in the secondary market.

the key issue here is scarcity, as with any growing city, once the available land for condo development runs out in the inner city, occupancy demand and competition will automatically adjust standards and develop a stronger secondary market. this will happen with time and i am already seeing changes.

wrt the farang market, i'd hate to burst your bubble, but the condo market here is much bigger than the 'farang' market. many more foreigners from asian countries like hong kong (china), japan, singapore, taiwan, korea make up the foreign buyer profile than westerners do. while westerners tend to buy around Pattaya, the Bangkok market is mostly a rental market for them because of the kind of skepticism commonly expressed in forums like this. we find asian buyers have a different intuition and approach to seeing the bangkok property market, and many are long term investors who believe in this neighbouring asian city's longer term potential.

just to clarify, i am not a property marketeer. i represent development investors and so i have nothing to sell and no need to talk up the market. a bad market call hits me the same way as it does individual buyers.

Edited August 30, 2006 by thedude

[Papa_Lazarou]

And there is no secondary market. Buy it and u are stuck lifetime with the worthless property.

Just check what some of this board (and other boards) members are paddling - their problems for sale, with river views, nobody wants to see, let alone buy.

He has a point. Just because some seller says something is worth THB 20 million - doesn't mean it is.

Its only worth what someone will pay, and no more.

[teej]

No property in BKK is worth more than 400US sqm up to 600US$ in premium locations.

And there is no secondary market. Buy it and u are stuck lifetime with the worthless property.

Absolutely false.

[pkrv]

I'm glad this forum thread finally got onto track. The Dude as always excellent responses.

I can say the Lakes and Legend were finished ages ago and seemed fine. The Dude has hit the subject on the head. Looking at figures is not actually particularly useful it would be a bit like comparing a prime city's (London, NY, Tokyo etc), prime location with a secondary cities run down area.

Bangkok is simply too diverse but is growing up very, very fast. In my opinion there is no point in considering the investment opportunities over the next few years, it is the long term prospects for Bangkok that matter most, full stop.

If you do not believe that Bangkok is going anywhere, well that’s certainly an opinion and a reason for being cautious.

If you believe that Bangkok is a fast growing and rapidly maturing city, perhaps through observation of what is happening in terms of expanded infrastructure, development of a CBD etc, then that too is an opinion.

I would suggest that you have found yourself priced out of the CBD and other core areas? That is possibly because you need to think way ahead. When things take off, much like Hong Kong, Singapore etc, they take off and you are forever locked out.

Its a tricky one, I'm still a new investor and have yet to see the long term consequences of what I have done, but I have faith, because I know that the UK financial markets (my sector) are taking Thailand very much more seriously.

Perhaps considering buying on the periphery of the CBD or the entertainment area would help? These should expand over time.

[Papa_Lazarou]

PKRV you're in Park Chidlom, correct?

[pkrv]

Correct, we took the risk back in April 2005, The Park was about 2 stories high at the time.

I will have to disagree with The Dude, he does have an interest in Bangkok, as indeed do I, and I believe justifiably.

But as they say the proof is in the pudding....

[cclub75]

I would suggest that you have found yourself priced out of the CBD and other core areas? That is possibly because you need to think way ahead. When things take off, much like Hong Kong, Singapore etc, they take off and you are forever locked out.

I agree with you with the CBD concept. But, watch out as for the comparisons with Hong Kong for instance. There the problem of scarcity is real (no land !).

Same with Singapore, where the "central business district" is.... very central indeed.

In Bangkok, I would say that we have... several CBD, if I may say.

It's the same with density issue.

If you set asides Sukhumvit... well the sky horizon in Bangkok is pretty flat ! Many houses or townhouses can be destroyed.

This is why, and once again a part Sukumvit, Silom etc... the real estate market in Bangkok can be so confusing, as for the fair value, compare to market in westerns cities.

Today you buy a condo, in a new tower, in a clear area with only houses around. Scarcity = high value.

But tomorrow, someone can start to build another tower next to yours....

[pkrv]

cclub75, a very thoughtful reply, thanks you. If I may counter

London - now artificially constrained by a green belt...

The past

Original concentration of financial market resources within the 'city'... (originally 'bank' business was done in coffee houses)

Outlying institutions withered on the vine unless very strong indeed.

Today

Buildings constrained by architectural considerations and or need to assert religious dominance (take your pick) limiting the size of structures near St Pauls.

Result migration of the CBD to Docklands.

I would agree with you in the past Bangkok has had several CBD's however this is being corrected big time, in the Ploenchit/langsuan/chidlom/wireless/ruam Rudi Areas.

Four major ultra high-end developments now in progress, virtually sold out some nearing completion. Multiple, smaller, ultra high-end developments in progress.

Major overhaul of the most prestigious shopping centers in Bangkok. Development of the skywalk, terminus point (currently) of the new airport express.

People of any nationality are not stupid; sometimes a concentration of resources is very necessary indeed in order to simply conduct business.

On choice of a particular building you are absolutely correct that is a mine field, I'm just trusting the British Embassy and its gardens are not sold off in the near future and the area is mostly already established.

Anyway back to the thread, yes if you are in a non concentrated market e.g. home ownership (by what ever mechanism), or have bought an apartment in a non core area you are very much more subject to the whims of the market through other constructions, and the area's 'vogue factor'. Hence the secondary market issues.

[Papa_Lazarou]

I'm not sure I want to spend $500,000 on a flat in Bangkok, though I know several people who have.

No disrespect to the place but its still 3rd world, and will be for our lifetimes.

I'm still thinking about where that kind of money can be invested to best effect in the Thai property market.

Even in Soi Chidlom next to PKRVs posh new gaff, there's invariably lots of detritus left around. I recall a pile of smashed neon tubes left in a huge heap there for about 6 months. Not nice.

[thaigene2]

Good grief, lighten up, guys!

- just over 2 years ago i wanted to buy off plan in what i really liked - my thai lawyer advised against on basis of crash before and more importantly a lot of projects try it on and c who will bite before taking any real commitment - so you pay your deposit - sure u nearly always get that back but in meantime your not looking elsewhere - 1-2 years down line not enough takers it folds -

This is what worries me and is one of my original concerns thus the OP.

I want to buy..but the Off-Plan places scare the sh*t out of me. Maybe unduly though. The places I've been to lately, Harmony Living and the Vogue (both in the Phaya Thai and Pahonyothin corridors) had the same off-plan scheme.

You pay a few hundred thousand up front then around 50,000 - 70,000 per month for a year and a half etc. as construction proceeds - pretty well too in the case of the Vogue. It works out to around 20-25 % of the purchase price. You don't pay the remainder til the unit is finished and you're ready to move in. So it's sounds not so bad..right?

BUT - like number6 says - if the majority of buyers 'off-plan' NEVER intended to move in, but hoped to flip it to others and thus only commit a smaller amount, what would happen if the buyers (for resale from the speculators) don't materialize? As it approaches completion the developer wants that 75%...but what happens if most speculators refuse to pay - or simply can't pay and were gambling (they love pyramid schemes here)? Does the project collapse 80% unfinished - because the developer has no funds to pay the bank?

Did that happen in 1997? And is that why even today some of the newer ones seem to be never quite get finished - and just get stuck a few months from the finish line? Does anyone know?

[pkrv]

I am always interested in what happens in Bangkok

Harmony Living and the Vogue (both in the Phaya Thai and Pahonyothin corridors)

I can look up the web sites via google searches and have done so already but please could you publish the web links, where is and what is the Phaya Thai and Pahonyothin corridor? I'm interested in knowing, not via the web sites.

[teej]

thaigene,

what you are not factoring in is quality of project and project location. You cannot simply take the general stance that buying off-plan is so risky that it's not even worth it (if so, then as risk-averse as you are, you should stick to completed projects to eliminate that risk)...

There's a lot to comment on re: your post but at the moment I'm a bit tired. My main point is that a quality project is a quality project. This is a general rule of real estate. If you bought off-plan at the Athenee then you will have saved a lot of money vs. if you buy upon completion... but that is the risk that the off-plan buyers were willing to take, thus the discount. Risk has a dollar value assigned to it. If you do not want risk, then you will have to pay full price.

Yes there will always be crappy projects in crappy neighborhoods, aka The Trendy, and upon completion (if it ever happens) it will probably be empty. But that is where research and diligence comes into play. Athenee and The Trendy are very different places and a discerning buyer will know which to buy.

As another poster mentioned, the property market in Bangkok is maturing, so the chances of another 97 happening as it did are rather slim, and if did occur, would occur under very different circumstances--good properties will always be good properties. Park Avenue in NYC will always be Park Avenue... Location, Location, Location.

As a side note, any of the Vogue projects are not on my list of good investments...

You seem very risk-averse, and maybe that's a good approach for some people who have worked hard for their money and don't want to part or all of it.... This is the main reason I recommend you searching for a completed project that you're happy with and saving yourself sleepless nights. But you will be paying a high premium for that sleep... To each his own.

Sorry if my post doesn't make sense, I'm just tired and maybe somebody else can make my point more eloquent, but I hope you get the picture.

[backflip]

"Did that happen in 1997?"

Different situation...Asia (especially Malaysia, Indonesia, and Thailand) suffered a financial meltdown as thier respective currencies depreciated quickly - I was in Taiwan, when I saw a TV ad "Indonesia, everything is on sale"...it wasn't a joke. The depreciation hit so quickly that developers left sites with tarps and cranes still in place. The Lakes was one of the many steel skeletons that littered the skyline. A new developer redefined the building from "office" to "condo", and a year later owners took possession of their units.

[thaigene2]

thaigene,

what you are not factoring in is quality of project and project location. You cannot simply take the general stance that buying off-plan is so risky that it's not even worth it (if so, then as risk-averse as you are, you should stick to completed projects to eliminate that risk)...

There's a lot to comment on re: your post but at the moment I'm a bit tired. My main point is that a quality project is a quality project. This is a general rule of real estate. If you bought off-plan at the Athenee then you will have saved a lot of money vs. if you buy upon completion... but that is the risk that the off-plan buyers were willing to take, thus the discount. Risk has a dollar value assigned to it. If you do not want risk, then you will have to pay full price.

Yes there will always be crappy projects in crappy neighborhoods, aka The Trendy, and upon completion (if it ever happens) it will probably be empty. But that is where research and diligence comes into play. Athenee and The Trendy are very different places and a discerning buyer will know which to buy.

As another poster mentioned, the property market in Bangkok is maturing, so the chances of another 97 happening as it did are rather slim, and if did occur, would occur under very different circumstances--good properties will always be good properties. Park Avenue in NYC will always be Park Avenue... Location, Location, Location.

As a side note, any of the Vogue projects are not on my list of good investments...

You seem very risk-averse, and maybe that's a good approach for some people who have worked hard for their money and don't want to part or all of it.... This is the main reason I recommend you searching for a completed project that you're happy with and saving yourself sleepless nights. But you will be paying a high premium for that sleep... To each his own.

Sorry if my post doesn't make sense, I'm just tired and maybe somebody else can make my point more eloquent, but I hope you get the picture.

Teej

Yes I understand your points. Actually I felt that Vogue and the Harmony Living project looked about the same quality - so apples and apples I think there. And yes again - I would like to buy already built - but hard to find ones that are good quality and available.

My main question was more about speculators. Are most of these people who buy (you see the signs 'Sold Out') - are they mostly speculators? Or are they people actually planning to live there? If the former, then they may not actually complete??

[thaigene2]

I am always interested in what happens in Bangkok

Harmony Living and the Vogue (both in the Phaya Thai and Pahonyothin corridors)

I can look up the web sites via google searches and have done so already but please could you publish the web links, where is and what is the Phaya Thai and Pahonyothin corridor? I'm interested in knowing, not via the web sites.

PKRV -

Here are the Websites:

Harmony Living is www.professionals.co.th (slow to load but has English - nothing on the Suk project only the Pahonyothin)

The Vogue is built by A.P and this is their site: http://www.ap-thai.com/product_main.htm (homepage in English but info on various projects including Vogue seems just in Thai)

-Thaigene2

[Papa_Lazarou]

Fortunately, Lehman Brothers are there to underpin the Thai property market by buying all the cruddy developments (eg the Trendy- via its Grand Asset deal) at twice their market price.

Lehman books Thai seaside hotel

1 September 2006

Surf's up: distressed developer Natural Park makes a quick profit as Lehman throws a lifeline.

It was announced on thursday in Bangkok that Natural Park, a Thai property company, has sold its Novotel Panwa Beach Resort Hotel to Lehman Brothers for $15 million. Natural Park bought the hotel in 2004 for $8 million.

Natural Park has been in a beleagured condition for several years as it strived to repay its external loans, and its survival seemed in question for a period.

Company executives said in a statement filed with the Thai stock market that the selling price of the asset is higher than the book value, which hopefully presages stronger financial stability.

Natural Park expects to alleviate its debt burden further when it hopes to make about $50 million from selling shares in subway operator Bangkok Metro, in the anticipated IPO (see related story). Natural Park holds a total stake of 14.5% in that subway company.

Two months ago, Lehman snapped up major Thai hotelier Grande Asset for about $160 million. This was a remarkable achievement for the seller as the company’s market capitalisation was just a third of that level only six months before.

It has just been revealed that the investment banker marshalling that deal was none other than the heavyweight Bangkok financier, Bob McMillen, a redoubtable Big Mango veteran, whom, in his Seamico days, masterminded victories in FinanceAsia’s award for Thai broker of the year three years running. His new corporate finance company McMillen Advantage Capital is the flagship of his newly established MAC Group and he is understood to be headquartered currently in Dubai.

Fancy a holiday chez Lehman? The Phuket hotel rooms are going for about $60 per night. However, the hotel is located quite a long way from the nightlife of Patong.

Copyright www.FinanceAsia.com Ltd

Edited September 1, 2006 by Papa_Lazarou

[Misty]

Yes I understand your points. Actually I felt that Vogue and the Harmony Living project looked about the same quality - so apples and apples I think there. And yes again - I would like to buy already built - but hard to find ones that are good quality and available.

My main question was more about speculators. Are most of these people who buy (you see the signs 'Sold Out') - are they mostly speculators? Or are they people actually planning to live there? If the former, then they may not actually complete??

In the last property cycle, speculation was undeniably a major factor. I don't track the market as closely now, but I can make two observations on projects I've checked out:

1) Upon my inquiry 6 mos ago, I was told a condo project by a well known property developer was "sold out." If I was really interested, however, they might be able to find me a unit that an existing buyer would be willing to part with--albeit at a higher price. (I actually wasn't interested, just trying to get a read on the market.) The building site was cleared about 3 mos ago. For the past month, however, all work has ceased--and now there are big signs on the outside of the project offering units for sale again with the developer's phone number.

2) A new high profile project is now being launched on Sukhumvit. Ads have been mailed out & there's a big floor display at high end shopping mall. Upon inquiry yesterday, am told that all the cheapest units are "sold out."

Please note the rest is in IMHO only -- I fully realize others may not agree: The units sold out in #2 are little more than shoe boxes, and densely packed like rabbit hutches. IMHO, not very desirable as living quarters. Also I believe definitely not desirable as a long term investment--i.e. an analysis of realistic rental yields & long term cost of owning doesn't appear to come close to justifying the sales price & realistic expected unit appreciation. Sadly with the various risks to the buyer in this town, you might even experience unit depreciation.

Bigger, more useable units in the same project are naturally much more expensive. Given that I could rent something decent in Bangkok the size of the bigger units at a fraction of the opportunity cost of owning one, buying-to-own seems a poor financial decision. The only game financially could be to try to buy and flip, i.e. speculate. But with so many others apparently trying to do the same thing (all the cheap shoebox units "sold out"), plus the transaction costs involved, is that likely to be a winning game? Yes, for the developer....but for the buyer?

Of course, people still buy housing for other reasons than as an investment....don't they? I.e., if if just feel better owning your own place, that's another story. For me, though, I may very well be a perennial Bangkok renter--better quality of life, IMHO, at a lower price. I'll invest my money somewhere else....

Edited September 3, 2006 by Misty

[thaigene2]

... an analysis of realistic rental yields & long term cost of owning doesn't appear to come close to justifying the sales price & realistic expected unit appreciation. Sadly with the various risks to the buyer in this town, you might even experience unit depreciation.

Yes I think that pretty much sums it up. The only reason we would buy a condo here is because we plan to be here quite a while - and cannot buy freehold house/land which would be the 1st option. So the condo would probably never be re-sold. Down the road if the govt changes the rules about farang land/house ownership, we could use the equity in the condo to secure a mortgage for a house (provided the BOT also changes its rules too on mortgage lending to foreigners - but a lot of 'if's' there to be sure).

And thanks for shedding some light on what is really behind all these 'Sold Out' signs. That's what I suspected - though like Teej and others pointed out it depends on the building, location, etc..If you're 'speculating' - read: gambling that you'll be able to flip the property before the time comes to cough up the final 80% - at what point do these guys bail out if no flip-buyer comes along? As the months tick by, the speculators have to keep paying out 1,500 - 2,000 - so their loss would become greater if they had no intention of paying the final 80% - maybe they never had it to begin with? Does that actually create an opportunity for buyers if the market softens? A distressed speculator needs to off-load the unit as the deadline approaches for the cash-call?

[pkrv]

Some very interesting responses covering all aspects of Bankok property.

If I may add just one or two corrections and expand on a few points.

Papa_Lazarou - Given I know something of you, you are going back a long way with the dumped neon tube issue. Given that you have no more recent horror stories I take that as a positive sign Bangkok is improving The Trendy does have its admirers also...

thaigene2 - Buying off the plan is always scary. But don't forget that initial deposits are small, and usually the 1/3 down payment is due at quite a late stage in construction (foundation plus several floors). That said things could still go wrong it’s very tricky.

backflip - The Lakes was completed in 2005 and was being moved into (slowly!). What annoyed me most about the Lakes was that the brochure did not show the equal height '97 crash skeleton building right next door (which you might be confusing with The Lakes?). Any such 'discrepancy' instantly puts me off buying into a development.

The Lakes - 62 Langsuan Road

http://www.thelakesbangkok.com/

[backflip]

pkry,

I'm not sure what part of my post that you're questioning. The Lakes WAS going to be an office building. It took one year for the developer to turn the skeleton into condos...and then the owners moved in. I'm not confusing the Lakes with the skelton next to it.

[pkrv]

Backflip - my mistake - I misread - PKRV

[CDB]

Reading these posts, there is permanent downbeat feel overall that buying a condo is a bad idea for farangs. It seems that as long as there have been forums here they have been filled with naysayers. Strangely, the experience of real people (not professional investors) has been much better.

For example, I'll give you my case. I was renting in Narathiwat soi 24 (off Sathorn) in what is the oldest shabbiest building -- Fortune Condotown 2. Eventually the building was sold off and renters were offered units. So I bought a 2 bed place (98 square meters) place on a high floor overlooking the pool and Bangkok Garden, for 31,000 per square meter. Some of my considerations were:

* It was already ten years old so the price was not going to drop as second hand after I had lived in it

* The condos were 95-100% full, mixed Thai/Chinese/Indian/Korean/Farang but not totally dependent on expats.

* The condition/maintenance of the building and common areas had actually improved over time

* The unit I chose was in a location that had an okay view, high floor, and more importantly there was no room to build anything in front of it.

* Narathiwat road is a new road and is gradually becoming more developed

* At that time there were no significant transfer fees, the sinking fund was fully paid up, common fees were low (and the first year was free)

* Price included free furniture (fridge, aircons, sofas)

Four years later, I have gradually replaced the aircons, floors, furnishing and generally improved the liveability. This is what I see

* Judging by the units around me, I can sell for 35%+ more than what I bought for. Units do not stay on the market for long.

* Rentals for similar units are 25-33,000 THB per month depending on condition and furniture. Thrown in some nice furniture and it will easily rent for 30 K. That's a 12% return per annum on what I paid and 9% on current value. Compare that to the silly 5-6% rental return on fancy grade A stuff

* The building is currently being repainted from top to bottom and they are putting in a Gym. Starbucks opened downstairs and the common areas have more greenery than before. It's still an old building but it's not deteriorating. Due the 100% occupancy, there is always money to upgrade without exorbitant common fees.

* The BRT will connect the transit system to the condo shortly.

So I didn't pay Sukhumvit premium pricing; I didn't buy a flashy grade A condo. Like many normal families I just bought a second hand Grade B in a building I knew was managed okay and in an area I liked. I didn't pay any lawyers or real estate professionals either, just checked everything myself.

In four years, I have saved 1.3+ million in rent and the apartment has appreciated by 1 million+. That's nearly what I paid for it. At the same time, Bangkok Bank loaned me 2 million against the title deed at SME rates. I don't use the overdraft now, but it's nice to have that line of credit as I need it. (This illutrates the importance of having a Freehold place in your own name -- you wouldn't get that credit without a title deed).

And since the baht has appreciated against major currencies, I have already recouped my investment in dollar terms. The thing is, there are many other people like me who buy an average unit in an average location. At the end of the day it doesn't even matter what the resale value is. I am here for the long term and I don't have to pay the rising rents and that alone covers the cost of the purchase. After being kicked around by former landlords, I not only have peace of mind, I don't have the costs and nuisance of moving every time the rents are raised.

What's the worst case scenario: I suppose that all hel_l breaks out in Thailand. So in that case, I can simply grab my overdraft in full and leave the country and let them repossess.

This is the experience of many people who are buying to live, not make a quick buck. Given that the equity markets are so unpredictable and that interest rates are low on savings accounts it's not such a bad choice, is it?

If I were buying primarily to invest, the key factor I would look at is sustainable rental returns. In that sense, it's easier to "tart up" a grade B unit, than keep a grade A unit up to standard.

But of course actions like this will not make any money for real estate professionals....