Housing Decisions

[mamborobert]

We built a house years ago and we were very fortunate to have sold it last year. Would not build or buy now in a country run by a military junta and with future events that could potentially be unfavorable to expats. Never has the adage "don't invest anymore in Thailand than you are willing to lose" been more true.

Under that rationale people would have never purchased here....given that we are at number 19 on the coup d'etat count and coming for the 19th constitution/charter. Its not like xenophobia or Thai nationalism is a recent development here.

There has always been a large element of risk for the naïve here just from the inability to put name on title. Whilst we have occurrences of the confused being preyed upon and the resultant "she done me wrong" stories I still would have thought that the more significant financial losses in the past (and to come) have been from the farang brokers and developers and financial advisors promising title ownership through dubious companies (look at the ongoing issues in Phuket as an example)etc. I would have thought you would always be more at risk from some Expats than the military here.

TV is littered with people that have been here for two decades or more, happily married (hopefully), acquiring property (in spouse name), and generally keeping their nose clean and under the radar. Trouble is that does not get enough coverage, there's no news in good news.

I do agree that people are now very fortunate when they sell now and that places stay on the market for a long time or end up being heavily discounted off cost or original price. For me, that has more to do with the adage than anything given the bubble/glut/diminishing national growth figures.

Edited August 5, 2015 by mamborobert

[evenstevens]

statement , cobber having been a beautiful maerimite for 10 yrs plus,if one takes the time and looks around, there are some gems in maerim , not near any up market resort

where the prices are inflated , have a very good cobber who recently snapped up a rai and bit,peice of dirt with a nice free standing house to boot for 3 mil, with a dab here and there a few modifications, a bit of landscaping and bingo in for 3.5 mil,and just approx 2 ks from centre of town

i feel my cobber has made a very astute decision in reallocating from the city to be a beautiful maerimite, for that number

gosh that toggle my poor memory i owe him lunch at the steak of the day maerim plaza

thks for the lunch reminder,and best of luck for your search statement

a beautiful maermite evening to all

Edited August 5, 2015 by evenstevens

[bangmai]

There was a good article in CityLife about the people holding on to their old family homes inside the moat. Short on hard numbers, but still well worth reading. It's something most of us have seen before, whenever there is a new stadium, freeway, or development proposed. Always a few that won't sell at any price. http://www.chiangmaicitylife.com/news/life-inside-the-moat/

[stament]

Most important thing to remember in Thailand is never invest more than one can afford to lose.

Secondarily not to purchase a home to be registered in a woman's name.

Got my Condo in 2008. Almost everyone advised against it, but it has turned out to be one of the best decisions I ever made.

Agree with first but not second because if I apply the first rule then naturally the second doesn't matter if you are inferring that I could lose it all that is.

As I said I'm more than happy to walk with nothing if my wife and I split up. The house is for my boys and my wife's futures and I would want them to be secure. Others might not feel the same as me fair enough.

[stament]

Mamborobert great post, you clearly have the same values and thoughts as me and make some very good comments.

[stament]

Great post above (mamborobert). Nicely written. I agree with every word...

Just got to this after my post, couldn't have said it better myself.

[stament]

We built a house years ago and we were very fortunate to have sold it last year. Would not build or buy now in a country run by a military junta and with future events that could potentially be unfavorable to expats. Never has the adage "don't invest anymore in Thailand than you are willing to lose" been more true.

Under that rationale people would have never purchased here....given that we are at number 19 on the coup d'etat count and coming for the 19th constitution/charter. Its not like xenophobia or Thai nationalism is a recent development here.

There has always been a large element of risk for the naïve here just from the inability to put name on title. Whilst we have occurrences of the confused being preyed upon and the resultant "she done me wrong" stories I still would have thought that the more significant financial losses in the past (and to come) have been from the farang brokers and developers and financial advisors promising title ownership through dubious companies (look at the ongoing issues in Phuket as an example)etc. I would have thought you would always be more at risk from some Expats than the military here.

TV is littered with people that have been here for two decades or more, happily married (hopefully), acquiring property (in spouse name), and generally keeping their nose clean and under the radar. Trouble is that does not get enough coverage, there's no news in good news.

I do agree that people are now very fortunate when they sell now and that places stay on the market for a long time or end up being heavily discounted off cost or original price. For me, that has more to do with the adage than anything given the bubble/glut/diminishing national growth figures.

Do they end up being heavily discounted, if so why? Overpriced to start or supply demand issue?

[fang37]

Determining a reasonable list price is difficult in the Nth. Also, the number of buyers is limited. Therefore, the property market is usually a buyers' market. Add to that the limited knowledge & marketing skills of property agents & it is a tough assignment selling a residential property.

Farangs relocating to LOS has declined lately too.

[MaeJoMTB]

As I said I'm more than happy to walk with nothing if my wife and I split up. The house is for my boys and my wife's futures and I would want them to be secure. Others might not feel the same as me fair enough.

How do you ensure she doesn't sell or gamble, once rid of you?

Very few foreigner hunters hang on to much.

[arunsakda]

Most important thing to remember in Thailand is never invest more than one can afford to lose.

Secondarily not to purchase a home to be registered in a woman's name.

Got my Condo in 2008. Almost everyone advised against it, but it has turned out to be one of the best decisions I ever made.

Agree with first but not second because if I apply the first rule then naturally the second doesn't matter if you are inferring that I could lose it all that is.

As I said I'm more than happy to walk with nothing if my wife and I split up. The house is for my boys and my wife's futures and I would want them to be secure. Others might not feel the same as me fair enough.

It is one thing to walk away from a condo that cost less than a new Honda Crv. Being driven out of town or assassinated so one's perfect Thai angel and her "brother" can live happily ever after in a home you paid for is another.

[huawei]

If you have been married say 10 years and have children, this " more than you can afford to lose" comment is pretty lame. It's lame anyway if you do due diligence and use common sense. I and others I know have made reasonable gains on our investments, both property and shares..trouble is many Marry at the drop of a hat, buy a house within a couple years..not reasonable in any country let alone one with such restrictive ownership laws....what is more worrying is that there is no trust law here in Thailand in protecting the child's assets which could be an issue later. However the family courts here are quite robust in protecting a child's interests, but everything unfortunately can be influenced by money.

[CNXBKKMAN]

My 25 satangs of advice is rent if you think you will be selling in 6-10 years. Buy only if you think you will be staying permanently . If you do decide to buy though don't bother with the areas that flood. Even though the floods don't come every year, six years down the line may coincide with a once in a decade big flood and will scare people off buying.

Whatever you think might be a good house before you buy it think hard about how easy it will be to sell. So if its a house in a modern style moobaan around the edge of the city you need to buy a second hand one with a good price "discounted to sell" type price. This will give you more room to sell at a discount in the future and generate interest in a market with thousands of new homes and half lived in estates in all directions. To get this kind of deal you will have to cruise around every estate and soi in Hangdong/ San Phak Wan checking out the homes for sale. Most want silly money and the house may been for sale for years! But some people have to sell and thats where you need to get lucky and be ready to move. Being a cash buyer gets all the sellers excited. You may be cruising the the sois and estates once or twice a week for months before you come across the discounted home. When the price is right they sell fast. You need a bit of luck.

Bangmai's advice of getting a townhouse right in the city is good option if you can find one. They can make a nice home. Older ones may have a flat rooftop area for plants and a BBQ. Hard to find but easy to sell at the right price. Its a home plus it has the ground floor business option. More potential buyers when you come to sell.

All the effort looking for a house can also be used at the same time for houses to rent. If you find a nice home with a low rent and you want to stay 6 years, rationally this is probably the best and stress free option.

[arunsakda]

Good reason to put the house into the kids name. Relationships can sour, but if you take good care of kids they are unlikely to kick their own father out on his butt. Condos? Say the manager takes a dislike to a Farang, they can easily make life miserable. I have seen a few driven out, one certainly deserved it. Smarter to bail than to push ones luck in a country where you can be snuffed for a small sum. What are you gonna do go to the Police? 555. Dream house in the countryside? All good until a pig farm or Bar opens next door. Then you have opaque governments that rule by decree. So to the rule about not purchasing a home in a woman's name, and not investing more than you can afford to lose there are two more to add

Never get into a physical altercation with a Thai

Do not open a business

[VIPinthailand]

don't do anything in Thailand, keep your cash in farang land and transfer only what you need. spend little and maximise what you can get. Thailand will be never your home...

[stament]

As I said I'm more than happy to walk with nothing if my wife and I split up. The house is for my boys and my wife's futures and I would want them to be secure. Others might not feel the same as me fair enough.

How do you ensure she doesn't sell or gamble, once rid of you?

Very few foreigner hunters hang on to much.

I don't but as I think that is very unlikely and I know her better than you. It's not a worry for me and doesn't answer my original question, you're seriously deviating from the original post.

[stament]

Most important thing to remember in Thailand is never invest more than one can afford to lose.

Secondarily not to purchase a home to be registered in a woman's name.

Got my Condo in 2008. Almost everyone advised against it, but it has turned out to be one of the best decisions I ever made.

Agree with first but not second because if I apply the first rule then naturally the second doesn't matter if you are inferring that I could lose it all that is.

As I said I'm more than happy to walk with nothing if my wife and I split up. The house is for my boys and my wife's futures and I would want them to be secure. Others might not feel the same as me fair enough.

It is one thing to walk away from a condo that cost less than a new Honda Crv. Being driven out of town or assassinated so one's perfect Thai angel and her "brother" can live happily ever after in a home you paid for is another.

Please get back on topic. I do enjoy a bit of banter and playful posts, but these aren't even midly funny or witty.

[arunsakda]

It's not playful banter, it's reality. I knew a guy who retired early. Set himself up in a swank Condo in Manila with a young wife. (Not Thailand but similar ) Of course she was "different". They shared an interest in Karate. He had adult American kids already and was not trying to start a new family. He explained some of the details and I had to tell him "man don't make yourself worth more dead than alive". He was not giving her much spending money but had applied for life insurance and willed her assets. He was a known cheap skate sitting on a mountain of money, a chartered stock trader, and decided he would stop flying to trade full time. He also did part time work as a simulator instructor for a well known Asian airline,as he had experience in that area.

Three years later he was found stabbed to death in the boot of a stolen taxi.

Edited August 6, 2015 by arunsakda

[bangmai]

If you are Russian, Canadian, or OZ/NZ wouldn't you be feeling pretty good right now if you bought a condo a year ago?

[MaeJoMTB]

As I said I'm more than happy to walk with nothing if my wife and I split up. The house is for my boys and my wife's futures and I would want them to be secure. Others might not feel the same as me fair enough.

How do you ensure she doesn't sell or gamble, once rid of you?

Very few foreigner hunters hang on to much.

I don't but as I think that is very unlikely and I know her better than you. It's not a worry for me and doesn't answer my original question, you're seriously deviating from the original post.

Seraphi and Nong Hoi, worst road access into CM, a driving nightmare and prone to flooding.

Hang Dong, too many foreigners and nightmare aircraft noise 24/7. Big road planned through the area dirt and dust for several years.

Don't buy if internet providers aren't already servicing the road.

Avoid areas with a large concentration of foreigners with low class wives .... she will listen to them .... she will gamble or worse with them.

4-6M .... why risk so much, big garden needs a lot of work. 2M tops is enough for a nice house.

I couldn't buy s/h because my wife would have conspired with the seller to up the price and make her a commission.

She was angling for 0.5M in her pocket (from conversations I eavesdropped upon). Very widespread practice.

Had to buy off plan from an established Thai developer who only marked to Thais, price of every house marked clearly in advance, no discounts or commissions for anyone.

I paid 300k, SCB provided her a home loan for 1.5M, new 3 bed, 3 shower, tiny garden.

Very little risk to my money.

Edited August 6, 2015 by MaeJoMTB

[stament]

MaeJoeMTB where did you buy and how long ago?

[mamborobert]

Stament, turning to your response to my post where you queried why properties are discounted so much here...

I think there are a myriad of reasons. I have seen quite a few properties discounted by a third. It makes it worthwhile waiting back (one recently from more than 6 million eventually being advertised and sold in the mid 4 million. What this does do, if you can wait, is open up your range dramatically as properties that you would never have envisaged being affordable will come into your range especially if you are searching some of the real estate web sites by price range. Consistent with the culture property is able to be bartered, but it is a longer process.

The big factor here, as others have alluded to, is that there is a glut of properties available. The difference with buying a Farang verses Thai owned property for me is that Thai's are more willing to sit and wait as land has value to them, there is the face is issue if they sell low, there is an expectancy to sell for a higher price if to a Farang, and they also have no or little mortgage (and if they do they are at exceptionally low rates). Given that your average Thai family can live on the smell of an oily rag.....they can wait.

Farang sellers are different as there is usually a time frame. They have committed somewhere else, need to return quickly to their homeland for family/work/illness/schooling etc. They are generally (if they are departing Thailand) working to a time frame for selling. The other side of this is that family and health issues are generally "unplanned" so there has been little time to come to grips with things.

Turning now to the price issue, what people value their own house as and what people are prepared to pay are always two different things and will depend on the level of pragmatism. Some think they are selling or buying a "dream" or "lifestyle" and value it accordingly, but in the end its a house. The individual makes the dream not the house, despite how much the house may be "perfect" or "stylish" or "customised". Your "dream" house that you price accordingly may not be the same as my "dream". Why would I pay top dollar for your "dream".

A departing Farang values the house generally in terms of what they paid for it...in there own currency and then has a nominal mark up. As currency fluctuates the foreign value may change but the baht value does not. As an example on the current US rates a 3 million baht house costs $85.3k USD. In May 2013, a little over 2 years ago the same house at the 29 baht to the US dollar exchange rate would have cost over $103k USD. So if you bought at $103k USD two years ago would you want to take a nearly $20k USD (17% reduction) haircut now.

A lesser but still prevalent model is to initially price a property at what an individual needs to re-establish themselves in their own country with little relation to the value of the property itself. This valuing method becomes a choice when people have no property in their own country and have retired or realistically assessed that they are going to make no or limited income in their own country, and an assessment of the living costs in their own country. So the fantasy Thai property price is conversely based on a realistic estimate of their financial abilities and ongoing expenses in their home country.. Eventually the reality gap closes and heavy discounting occurs.

There is an abundant supply, often cashed up buyers, and on a regular basis desperate sellers.​

It sounds (or is) predatory but there will always be Farang bargains to be had if you have the cash and can wait , as to put it bluntly, you are capitalising on the misfortune of others. I may not buy your "dream, but I will buy your bargain. While emergencies do spring up, often there is a lack of initial planning (judgement) so this is where the "don't invest in Thailand more than you can walk away from" groupies come in. If you retired here on a state pension, with no wife (but now have a younger one proficient in Thinglish), complain about the price of everything, do not interact and enjoy, drink as recreation, and generally have the social skills of a brick you will invariably fall into this group. Often the "don't invest more....." groupies are envious/jealous as they have not invested as they have nothing to invest (but are excellent advisors if you want to know here the best 20 baht meal is) If you have made good decisions in the past, back yourself now.

.

A house (for me) is primarily a home not an investment, and certainly not an easily convertible investment in Thailand so to me we are talking about two different things (home verses capital return)/ If its your home and you love it then a 17% reduction or 17% increases is immaterial.

By this I mean if you and your family love their home, location, neighbours would you sell simply because it went up 17%?. My house in Oz has gone up 600% and I will not sell. It's my home (apart from my Thai home) where my adult children still live and I stay when I visit.

If you are here for the long haul, do your research, wait, have some trust in your wife, buy, and above all enjoy your home, family, and dream coz your a long time dead.

Edited August 7, 2015 by mamborobert

[stament]

Mamborobert great post again, many thanks for the time taken to respond in such detail. A lot of what you say I already know and agree with, and other bits are insightful so thanks again.

We will be cash buyers and from the sounds of need to invest time looking around and making sure we select the right property for us at the right price for us. We have plenty of time as only 6 weeks into a one year lease. Next time I'm back we will look around areas to get a feel for what parts we like.

Where are you living incidentally?

[MaeJoMTB]

A departing Farang values the house generally in terms of what they paid for it...in there own currency and then has a nominal mark up. As currency fluctuates the foreign value may change but the baht value does not. As an example on the current US rates a 3 million baht house costs $85.3k USD. In May 2013, a little over 2 years ago the same house at the 29 baht to the US dollar exchange rate would have cost over $103k USD. So if you bought at $103k USD two years ago would you want to take a nearly $20k USD (17% reduction) haircut now.

A lesser but still prevalent model is to initially price a property at what an individual needs to re-establish themselves in their own country with little relation to the value of the property itself. This valuing method becomes a choice when people have no property in their own country and have retired or realistically assessed that they are going to make no or limited income in their own country, and an assessment of the living costs in their own country. So the fantasy Thai property price is conversely based on a realistic estimate of their financial abilities and ongoing expenses in their home country.. Eventually the reality gap closes and heavy discounting occurs.

There is an abundant supply, often cashed up buyers, and on a regular basis desperate sellers.​

There is a large flaw in your logic,

Foreigners usually pay 50% -100% more than Thais for the same house, so when they sell at a discount, they still want much more than a Thai seller.

So your fantasy $103k house would have only been worth $75k at best, and the 17% reduction you suggest would still leave it at more than the current market value ($60k).

Unlike MamboRobert, I've never seen anything approaching a 'farang bargain' in Chiang Mai.

@OP, One more thing, and off topic,

Your misses could expect to earn about 8k a month (high school dropout) in CM (with a degree up to 15k). Your 4-5M house is 40 years salary for her.

Would you give a woman in you home country 40 years wages as a cash gift (no matter how well you knew her)?

Edited August 7, 2015 by MaeJoMTB

[stament]

Er no I would have the property in joint names but different countries, different laws. Besides as I have said I have no issue buying a family house for us that will be in my wife's name, so not quite sure why you should have an issue with it as I'm not asking you to buy it!

Anyhow, I know if I asked my wife to put the house in. Y kids name or construct some legal document to cover me she would with no issues. I choose not to, she's very responsible and wouldn't gamble the house away. I struggle to get her to spend money. Today she was complaining that she spends 300 baht every day in Chiang Mai on food for our family. She's not the type who wants the latest phone, etc, she understands the value of money and doesn't like it when I suggest going on holiday as she would prefer us to save the money.

I hope we can close that side issue now and focus on the original post. Where did you buy? What and where would you suggest buying besides a condo in my name? ;-)

[bangmai]

A departing Farang values the house generally in terms of what they paid for it...in there own currency and then has a nominal mark up. As currency fluctuates the foreign value may change but the baht value does not. As an example on the current US rates a 3 million baht house costs $85.3k USD. In May 2013, a little over 2 years ago the same house at the 29 baht to the US dollar exchange rate would have cost over $103k USD. So if you bought at $103k USD two years ago would you want to take a nearly $20k USD (17% reduction) haircut now.

A lesser but still prevalent model is to initially price a property at what an individual needs to re-establish themselves in their own country with little relation to the value of the property itself. This valuing method becomes a choice when people have no property in their own country and have retired or realistically assessed that they are going to make no or limited income in their own country, and an assessment of the living costs in their own country. So the fantasy Thai property price is conversely based on a realistic estimate of their financial abilities and ongoing expenses in their home country.. Eventually the reality gap closes and heavy discounting occurs.

There is an abundant supply, often cashed up buyers, and on a regular basis desperate sellers.​

There is a large flaw in your logic,

Foreigners usually pay 50% -100% more than Thais for the same house, so when they sell at a discount, they still want much more than a Thai seller.

So your fantasy $103k house would have only been worth $75k at best, and the 17% reduction you suggest would still leave it at more than the current market value ($60k).

Unlike MamboRobert, I've never seen anything approaching a 'farang bargain' in Chiang Mai.

@OP, One more thing, and off topic,

Your misses could expect to earn about 8k a month (high school dropout) in CM (with a degree up to 15k). Your 4-5M house is 40 years salary for her.

Would you give a woman in you home country 40 years wages as a cash gift (no matter how well you knew her)?

My Thai sellers were asking 1.1 and I got it for 915,000. They had been transferred to Lopburi. They had been renting it out for 7000 per month to a farang and his Thai wife, who were real trashy people. They kept having plumbing problems, but after removing the wallmount air freshner that had become lodged in the toilet, from it, all the plumbing trouble went away. They thought the back-ups were septic related and that wasn't the case. But they were frustrated out of town landlords, and wanted the money to buy down there. I made about 5000 USD profit (mostly from currency fluctuations) and had a free place to live. Money talks, especially, when it is cash. You can tell pretty quickly, who is willing to let it sit there for five years, and that can include the Bank REOs. If you are looking for a bargain, you need to move on quickly, when that is the case. At the lower end condos (under 1 million), a 100K can mean the difference in a sale in a week or a sale in 18 months. That's not even enough to get an extra 3 feet of length in your garage in the US.

[MaeJoMTB]

Er no I would have the property in joint names but different countries, different laws. Besides as I have said I have no issue buying a family house for us that will be in my wife's name, so not quite sure why you should have an issue with it as I'm not asking you to buy it!

Anyhow, I know if I asked my wife to put the house in. Y kids name or construct some legal document to cover me she would with no issues. I choose not to, she's very responsible and wouldn't gamble the house away. I struggle to get her to spend money. Today she was complaining that she spends 300 baht every day in Chiang Mai on food for our family. She's not the type who wants the latest phone, etc, she understands the value of money and doesn't like it when I suggest going on holiday as she would prefer us to save the money.

I hope we can close that side issue now and focus on the original post. Where did you buy? What and where would you suggest buying besides a condo in my name? ;-)

My wife bought in MaeJo. I provided the deposit (330k) and the monthly repayments (11k).

If you have to buy, let her do it with a bank loan over 30 years.

http://www.kkn.co.th/eng/

are building moobans all over CM, from 1.8M in Hang Dong (beside Baan Wan Taan)

Doesn't suit everyone, not much garden, but safe for me and I hate gardening.

PS

Mine gets 200bht/day for family food, but hides away at least 50bht from that.

Edited August 7, 2015 by MaeJoMTB

[bangmai]

If you're paying 11K for 30 years on 1.5 million...that means 8% interest. Ouch! Is that a fixed rate loan? Was it an EZ Qualify type of loan?

[MaeJoMTB]

If you're paying 11K for 30 years on 1.5 million...that means 8% interest. Ouch! Is that a fixed rate loan? Was it an EZ Qualify type of loan?

6.85%, current variable loan rate for Thai banks.

The home owner needs 6 months of wage slips that show earnings of at least 2x the repayments, along with a 5-10% deposit (SCB).

Other banks have other conditions, but the repayments are the same.

Edited August 7, 2015 by MaeJoMTB

[bangmai]

Fairly lenient. Both allowing 50% of income to go towards mortgage, and only 6 months of pay slips.

[stament]

My wife is a working housewife, she wants to work but I said it's not really woth it looking after two kids and always better for the kids to be with their mother, than hired help. Hence she doesn't have any income of her own. Of course when we were in England she saved us loads of money simply by looking after the kids and not working as child are is expensive in the UK.

I see it as a worthwhile investment that my wife doesn't work from a family perspective. When the boys get older she might work but for now especially with me working abroad the current model works best ;-)