Condo a good investment?

[Kenny202]

Hi. At this stage considering living here long term and wud really like to invest in some property. I'm torn between buying something local in my girlfriends name ( with lease and me as the mortgagee) and a condo. Wudnt have even considered a condo as from what I've seen u get around third the actual value u wud just buying a normal inner city isaan property. I do however see in some of the nearby provinces (khonkaen, udon) it is possible to buy an older 1 or even 2br Condo between 750k - 1mill baht. Are Condos showing investment growth here?

(I been around thailand a while, please no bargirl rips off farang advice)

Edited July 7, 2015 by Kenny202

[WorkingTourist]

If you buy a good quality condo (i.e. one that doesn’t look like it needs a total revamp in 10 years) in an attractive area (meaning demand will not decrease) then I would say it’s a low-risk investment with a moderate return, assuming of course you get it at a reasonable price.

I really doubt it’ll ever be a growth investment, depending on what exactly you put in “growth investment”. But it sounds like you’re looking at an average condo in a non-central location.

The main thing is really location because if your location is not prime then in 10 years, your condo is just a 10 year old version of what can be built on a new plot of land, so the price will at best be cost of labour (to build new) and materials with the “10 years of wear and tear” discount. So the price increase will roughly match inflation and salary increase.

[trogers]

You used the word 'Investment'.

So, where and what kind of returns would you be able to forsee over the years?

Start with these questions and you would find your own answers.

Edited July 8, 2015 by trogers

[Kenny202]

Well that's pretty easy. Getting about 3% invested. Do have some money on the stock market but it's managed and I have no clue what I'm doing to go it alone. To go to all the trouble of tying my money up etc wud want to hope the value of the property wud grow at least 7% pa long term (without considering rent return). I guess initially I shied away from a Condo is because there is simply so many of them around and I saw them as really something a farang buys to live in until the last hurah. Have no idea if they are good growth investment or not.

Edited July 8, 2015 by Kenny202

[trogers]

"(without considering rent return)..."

Then you are not investing in real property, but speculating.

The time horizon for investment in real property often exceed a decade, and not practical not to consider rental income.

[Kenny202]

Hmmmm. Ok. Worth doing or not or condos only for if u want somewhere to live. Obviously depends on what I can get for my money. I'll put it this way if at the right price are condos easy enough to sell or the markets flooded or will be flooded

[WorkingTourist]

For your average condo in Thailand, a 7% annual appreciation is unlikely. For that to be sustainable, wages would have to follow, otherwise we’d soon be in a situation where nobody could afford buying a condo.

Only in highly desirable places will you see condo prices grow faster than the overall economy, because location can be a scarce ressource that some are willing to pay extra for.

Also keep in mind that when selling a condo you have to pay taxes, so the net yield is lower than condo price appreciation (ignoring maintenance cost like CAM fees).

I did a spreadsheet model to calculate the taxes here http://www.thaivisa.com/forum/topic/830727-real-estate-annual-yield-spreadsheet-model/

[WorkingTourist]

Hmmmm. Ok. Worth doing or not or condos only for if u want somewhere to live. Obviously depends on what I can get for my money. I'll put it this way if at the right price are condos easy enough to sell or the markets flooded or will be flooded

Location, location, location!

There are condos today in Bangkok being sold at 300k/sqm. and otherwhere in Bangkok you can’t sell your condo at a 10th of that price.

Same in Chiang Mai, the new stuff going up near Chang Klan is 100-200k/sqm. yet further east, you can get a condo for 10-20k/sqm.

[Kenny202]

All good logical and sound advice. Looks like a little duplex has popped up in the middle of the CBD 400k baht. Might put my money on that one.

One thing, and haven't seen it yet but we know the soi and pretty good idea of the home and layout (aunty has similar). Lady says the home (2 bedroom, kitchen, lounge) and land inc room front home for pick up 22 sq metres. Do they measure square metres here different or does she have it wrong? Our place is 8m X 8m and I make that a 64 sq metre home not including land? Am I missing something here?

[WorkingTourist]

A square metre is a metre squared, i.e. the area of a square with both sides being one metre.

Last I checked, a metre is also a metre in Thailand

The lady either has it wrong, or those rooms are tiny (averaging 5.5 sqm. each).

[Kenny202]

Rooms? She told my missus all home and land 22 Sq m haha. I calculated 5m x 5m too. I hope she has it wrong! Two thai ladies talking building measurements? My missus can't even get clear directions to go next door

Edited July 8, 2015 by Kenny202

[Kenny202]

By the by, talking to people about buying homes some say they'll pay for change the title to our name, others say we need to pay for it. I'm guessing tfer fee, stamp duty, taxes, land office etc. Are we talking a lot of dollars here or a percentage of the sale price? What's involved?

Is it normal to put some sort of deposit conditional on say a favorable building / pest inspection within 7 days? Others have told me many sales normally just involves the buyer and the seller and a bag of cash fronting up to the lands office. If the seller has the original chanote and theres no encumbrances written on the actual paper are we good to go? Does the lands office know if there's any possible future detrimental development around the property ie high rise next door, future train line etc? I do intend to use a lawyer to have myself as the mortgagee and a lease placed against the chanote so I'm guessing he will be present handover day. What's the normal procedure? This is city property not village land

Edited July 8, 2015 by Kenny202

[SantiSuk]

Took 3 years for the condo developer at my condo to sell off all the units in OnNut Bangkok - the ones at the recent end were priced 15% less than I paid three years ago. I'm not saying that this is typical, but I am saying you should not assume that Thai property is a good investment.

I remain an equity not property investing enthusiast! Have never been able to see the attraction of wasting assets that are so much trouble to buy/sell/maintain

[KittenKong]

All good logical and sound advice. Looks like a little duplex has popped up in the middle of the CBD 400k baht. Might put my money on that one.

One thing, and haven't seen it yet but we know the soi and pretty good idea of the home and layout (aunty has similar). Lady says the home (2 bedroom, kitchen, lounge) and land inc room front home for pick up 22 sq metres. Do they measure square metres here different or does she have it wrong? Our place is 8m X 8m and I make that a 64 sq metre home not including land? Am I missing something here?

Thais sometimes measure in talang wah which is 4 sq m.

[Kenny202]

Yeah in my case, have a little sht box property in the middle of the CBD. Not big land, home grubby but structurally strong. Awesome location. 400k thb. It can sit there forever. Has to appreciate one day. No brainer. Seemingly CBD property rural Thailand still around the same price as in a smaller Amphur AKA Sydney 40 years ago. One day wen Thailand gets its act together hopefully will increase. If not will always get my money back

[WorkingTourist]

Is CBD short for Central Business District?

If you’re buying something for 400k, I wouldn’t rely on any significant appreciation.

I bet you that if you put 750 baht/month into a savings account (yielding 1.5% p.a.) then you will end up with more on your savings account than the profit made from your condo

[Kenny202]

Long term has to go up Imo. The world is changing. Kids have the internet and mobile phones. They don't want to live and work on farms, they want to live in the middle of the city. I cud be wrong but guess I'll just have to gamble my 1.5% pa :-)

[fang37]

In your original post, you said that you wish to buy a condo in your g/f name.

Why?

Thailand is not your average market ie expats have limited choice in the property market ie condos

I understand that the influx of expats is waning. Chinese are buying but usually acquire studio apartments.

Obviously, you would require a greater return on a rural property.

I would recommend a property investment only as a principal place of residence.

Good luck & move slowly

Edited July 9, 2015 by fang37

[WorkingTourist]

Where are you buying?

You have mentioned rural Thailand and mentioned Udon and Khon Kaen as nearby provinces.

People move to Bangkok, not small towns in rural Thailand. Look at the population of the cities in Thailand here, its a winner takes all: https://en.wikipedia.org/wiki/List_of_cities_in_Thailand

[Kenny202]

Chaiyaphum. No I was looking at buying a condo in my name or a thai property in my girls name with me as the mortgagee. Now doing the latter. I'm not looking at a future farang market but a hopefully more upwardly thai market maybe 10-15 years. I may be wrong. I know the property were buying about 100k under market. Hey, it's $12k US. I won't lose on it. I plan a long term future here so if we don't cash it in the future have something there for my gf. We like living here and hopefully this is where our future is

[Kenny202]

In your original post, you said that you wish to buy a condo in your g/f name.

Why?

Thailand is not your average market ie expats have limited choice in the property market ie condos

I understand that the influx of expats is waning. Chinese are buying but usually acquire studio apartments.

Obviously, you would require a greater return on a rural property.

I would recommend a property investment only as a principal place of residence.

Good luck & move slowly

I've heard the Chinese own a huge chunk of Thailand due to loaning money against property and claiming default. How can they own property here

[WorkingTourist]

So you’re going to live in the place for the next 10-15 years, and your focus is on the potentiel yield for this 400k “property investment”?

If I were you, I wouldn’t care about whether it can be sold for 300k or 900k in 15 years, rather on whether or not it is actually the place for you.

[Kenny202]

I'm not living there. We have a home. We'll use it wen we stay in town. Everyone is different buddy

[blackcab]

Is CBD short for Central Business District?

If youre buying something for 400k, I wouldnt rely on any significant appreciation.

I bet you that if you put 750 baht/month into a savings account (yielding 1.5% p.a.) then you will end up with more on your savings account than the profit made from your condo

Yes. Central Business District.

[blackcab]

In your original post, you said that you wish to buy a condo in your g/f name.

Why?

Thailand is not your average market ie expats have limited choice in the property market ie condos

I understand that the influx of expats is waning. Chinese are buying but usually acquire studio apartments.

Obviously, you would require a greater return on a rural property.

I would recommend a property investment only as a principal place of residence.

Good luck & move slowly

I've heard the Chinese own a huge chunk of Thailand due to loaning money against property and claiming default. How can they own property here

Because they are Chinese whose ancestors moved here about 3 generations ago during the second world war. They or their children aquired citizenship so they are Thai citizens.

Very much the same as the Thai Indians, just a different continent.

[Kenny202]

Anyway. Gone right off the idea. Doesn't take long to get tired or demotivated doing anything here. The lady selling the property finally took us to see it. Small 2 br townhouse...exactly what we wanted. Structurally good but filthy as. Easily sorted cosmetically. Anyway, the 2 bedrooms had locks on the doors do we cudnt look inside. Told the woman of course we would need to see in the bedrooms (50% area of the house) to make sure ok. She then started telling us stories that she doesn't really want to sell she's only going through with it because she promised us. Other stories of everyone else in the street complaining she's selling too cheap and driving the price down. Usual Thai bs. Said she would find it difficult to organize the tenant to unlock the bedroom doors....GOOD BYE. How could anyone do any sort of business here? Would drive u insane.

We went to a print shop the other day to get 3 photocopies and a set of passport photos. I joke u not 1.5 hours! Then the passport photos she took were from the waist up stupid woman. I threw them out the window on the ground as we drove off in front of everyone. Why is everything so bloody hard here

Edited July 11, 2015 by Kenny202