Buying a House in Thailand.

[jamiejoel]

Just a quick question, not sure if anyone can help or not.

My partner (Thai male) and I (European male) wish to buy a house in Thailand. It is fine if in his name as we have been married 10 years and he has a good job. We have a civil partnership from Europe but obviously this is not recognised here.

We have maybe 20% of the value of the house we would like to buy. What I need to know has any single or gay foreigners managed to get their names onto a property mortgage. I know we can not buy land but we would need any bank to take both our salaries into account.

Also has anyone had experience with applying for mortgages or loans and which banks should we try.

Many thanks for any advice.

JJ

[MaeJoMTB]

SCB is the easiest.

BKB like a 50% deposit when a foreigner is involved.

No chance of your name on any document with a home loan involved.

Very hard if his job isn't in Thailand.

Edited October 11, 2015 by MaeJoMTB

[Soutpeel]

Typically it will be the Thai national only whose name is on the mortage and the foreigner can sign as gurantor on the loan for the thai national, i have done this and my salary was considered for the loan although it is in my Mrs name, i needed a WP, letter from my company in Thailand stating my position is permanent and 12 months pay slips....took 6 weeks from start to finish with SCB

[Pinot]

I always advise people to never buy property in Thailand for way too many reasons to list. Do a little research here, you'll find one disaster story after another.

There is so much to rent why create a headache for yourself? It's always a bad investment. Even if it makes you money, there is too much risk. I live here in Phuket and everyone I know has sold or wants to sell and can't.

Is it the nesting urge?

[circusman]

I always advise people to never buy property in Thailand for way too many reasons to list. Do a little research here, you'll find one disaster story after another.

There is so much to rent why create a headache for yourself? It's always a bad investment. Even if it makes you money, there is too much risk. I live here in Phuket and everyone I know has sold or wants to sell and can't.

Is it the nesting urge?

Yes, I agree, renting is best. I have done both the buying and renting. Rent my friend. Save the hassle.

[slipperylobster]

Good advice here.

Read recent threads about how the thai partner can get power of attorney and remove your name off any document they wish....for a paltry price of 500 baht. So easy to make a corporation...with you the majority holder...but easier for any partner to get power of attorney to sign your name off that.

I think there was a BBC special aired recently. You can find if you search these forums.

My idea is for everyone to cease and desist on the overinflated house buying race. Relax...rent a beauty of a house. You can lease by paying six months advance...and probably arrange no deposit. Trick is to find an owner in trouble (most are) and keep the bank from getting it (or the loan sharks). Banks often accept as low as 5000 a month for three rai (I know this is true in Udon)...to keep it from being forclosed. You can pay 60 to 120 thousand for a year (in advance) and help out the owner. House stays in owners name...but you lease it for the length of time you want.

Posts advocating that it is safe and easy to own a home (for a farang) are in the broker business....or are owners trying to get out of a bad deal. Exceptions are those of us who have been married quite a while and have a healthy, trusting relationship....based on years of knowing each other.

Condos are a different story.

Edited October 12, 2015 by slipperylobster

[jalansanitwong]

Rent, dont buy not the least being you can pack up and leave whenever you want. Thailand's not for everyone. Living here is vastly different from holidaying.

No farang can legally put his name on a deed here. If you're new in Thailand dont trust any thai or foreigner regarding property.

There is always a huge supply of rental condos and houses in Thailand. Renters market for sure . very cheap. US$ 200/monthly +

If you both go into a bank asking for a loan that will certainly raise a few eyebrows!

I'd be interested to know what the banks reaction was. keep us posted. lol

Edited October 12, 2015 by jalansanitwong

[louse1953]

Good advice here.

Read recent threads about how the thai partner can get power of attorney and remove your name off any document they wish....for a paltry price of 500 baht. So easy to make a corporation...with you the majority holder...but easier for any partner to get power of attorney to sign your name off that.

I think there was a BBC special aired recently. You can find if you search these forums.

My idea is for everyone to cease and desist on the overinflated house buying race. Relax...rent a beauty of a house. You can lease by paying six months advance...and probably arrange no deposit. Trick is to find an owner in trouble (most are) and keep the bank from getting it (or the loan sharks). Banks often accept as low as 5000 a month for three rai (I know this is true in Udon)...to keep it from being forclosed. You can pay 60 to 120 thousand for a year (in advance) and help out the owner. House stays in owners name...but you lease it for the length of time you want.

Posts advocating that it is safe and easy to own a home (for a farang) are in the broker business....or are owners trying to get out of a bad deal. Exceptions are those of us who have been married quite a while and have a healthy, trusting relationship....based on years of knowing each other.

Condos are a different story.

The resort areas or farang ghettos are way overpriced as shown at the head of every TVF newsletter.if you stay away from these places and a bit out of town,bargains are to be had by the truck load.

[GlutinousMaximus]

Very good advice here.

Mortgage rates in Thailand aren't particularly cheap (compared to the UK for example) so let's say you borrowed 2 million baht at 6% interest (and it will probably be more than that), then just servicing the interest could cost around 120K a year (obviously that goes down over time) - you could get a really nice rental pad for that.

It's not like the UK where you have a reasonable expectation of properties going up in value over time and where you can dispose of it easily at market value. Your Thai property may or may not appreciate and if it doesn't you're in negative equity. Add to that the fact that

Thai property can be an extremely illiquid asset unless you own something on a busy road for example (and let's not get into whether you're still going to be with your partner x years down the road).

If you're really set on owning property, think about getting a cheap parcel of land first (may not be possible if you're in BKK though), then building something like the locals do for maybe 500K on a piecemeal basis as time allows. You could do it over time - get the shell up, then tile it when you have a bit more money etc. I've seen tidy little bungalows and such-like up here in Issan built for that sort of money and I could think of worse places to live.

[slipperylobster]

Very good advice here.

Mortgage rates in Thailand aren't particularly cheap (compared to the UK for example) so let's say you borrowed 2 million baht at 6% interest (and it will probably be more than that), then just servicing the interest could cost around 120K a year (obviously that goes down over time) - you could get a really nice rental pad for that.

It's not like the UK where you have a reasonable expectation of properties going up in value over time and where you can dispose of it easily at market value. Your Thai property may or may not appreciate and if it doesn't you're in negative equity. Add to that the fact that

Thai property can be an extremely illiquid asset unless you own something on a busy road for example (and let's not get into whether you're still going to be with your partner x years down the road).

If you're really set on owning property, think about getting a cheap parcel of land first (may not be possible if you're in BKK though), then building something like the locals do for maybe 500K on a piecemeal basis as time allows. You could do it over time - get the shell up, then tile it when you have a bit more money etc. I've seen tidy little bungalows and such-like up here in Issan built for that sort of money and I could think of worse places to live.

You would have to lease the land...definitely.

The house (materials and such)...I would agree. Build slowly. I am looking at knockdown homes...and I would be willing to put one up on troubled land. (Have an agreement with the owner for a prolonged length of time..for leasing a chunk). Money would have to go directly to the bank. I do not see this as cheaper than just renting. Building...plus leasing land...is going to cost more than just renting and existing home.

[GlutinousMaximus]

Very good advice here.

Mortgage rates in Thailand aren't particularly cheap (compared to the UK for example) so let's say you borrowed 2 million baht at 6% interest (and it will probably be more than that), then just servicing the interest could cost around 120K a year (obviously that goes down over time) - you could get a really nice rental pad for that.

It's not like the UK where you have a reasonable expectation of properties going up in value over time and where you can dispose of it easily at market value. Your Thai property may or may not appreciate and if it doesn't you're in negative equity. Add to that the fact that

Thai property can be an extremely illiquid asset unless you own something on a busy road for example (and let's not get into whether you're still going to be with your partner x years down the road).

If you're really set on owning property, think about getting a cheap parcel of land first (may not be possible if you're in BKK though), then building something like the locals do for maybe 500K on a piecemeal basis as time allows. You could do it over time - get the shell up, then tile it when you have a bit more money etc. I've seen tidy little bungalows and such-like up here in Issan built for that sort of money and I could think of worse places to live.

You would have to lease the land...definitely.

The house (materials and such)...I would agree. Build slowly. I am looking at knockdown homes...and I would be willing to put one up on troubled land. (Have an agreement with the owner for a prolonged length of time..for leasing a chunk). Money would have to go directly to the bank. I do not see this as cheaper than just renting. Building...plus leasing land...is going to cost more than just renting and existing home.

Buy vs lease depends very much on location - you could get 1 rai freehold land up in Issan (nothing special but OK) for maybe 200-300K a rai, and you could get away with a 400sq metre plot (1/4 rai) to build a house on, so let's say 100K for that.

From the OP's post, I believe his Thai partner will own the property & he's cool with that (so no restrictions on freehold ownership).

It probably isn't cheaper than just renting, however you do have an asset, and if you could get it built in say a 2-3 year time-frame, then after that you could live rent and mortgage free.

If I ever invested in property in Thailand again, that's the route I would take where I'd spend max one million on land + house, and if I had to walk away from it, it's no great loss.

Edited October 12, 2015 by GlutinousMaximus

[David in the north]

In your position, I would suggest that you rent.
No doubt lots will disagree with me, But I don't think, as a foreigner - it is a good idea to take out a large loan here.

[chiang mai]

I on the other hand recommend you buy in order to save on wasted rental payments, if you think you need some protection, take out an usufruct.

Sadly you will only ever hear from nervous and overly cautious expats on this subject or from the ones that can't afford to buy, the satisfied farang/Thai owners are content to get on with their lives without needing to constantly bleat on about how unsafe the country for foreigners and how dangerous it is to invest here. Big yawn!

Edited October 12, 2015 by chiang mai

[bazza40]

Bear in mind the literal translation of mortgage from the French is "death pledge". With only a 20% deposit, your money could be wiped out in a property recession.

The bank that loans money to you for a 20 year term ( or what ever the two parties settle on ) is in no way obliged to honour that 20 year term in the loan contract. If the bank decides to call in the loan, EVEN IF you are keeping up the payments, you have two options - repay it in full, or default and watch the bank take possession of the house. It will sell the house at whatever price it can get, then continue pursuing you for any outstanding balance.

I'm not saying this will happen, no-one can predict the future. However, I feel there are a lot of people out there who don't understand the full ramifications and risks of mortgages, particularly with low deposit levels. Better to rent until you have a decent equity.

[GlutinousMaximus]

I on the other hand recommend you buy in order to save on wasted rental payments, if you think you need some protection, take out an usufruct.

Sadly you will only ever hear from nervous and overly cautious expats on this subject or from the ones that can't afford to buy, the satisfied farang/Thai owners are content to get on with their lives without needing to constantly bleat on about how unsafe the country for foreigners and how dangerous it is to invest here. Big yawn!

It's not those factors that concern me - it's the illiquidity of Thai property.

Usurfucts also don't strike me as 100% cast-iron (just Google this forum for caveats about them).

Even if you only spend 1 million on building a house, well up in Issan, I can rent a decent house + garden for 6k a month. Do the math as the Americans say - 6k a month = 70K a year, so 1 million buys you approx 14 years of rental living - not bad at all (try doing that in the West)......plus if DJ Somchai moves in next door with his 2000 Watt sound system, you just up sticks and go somewhere else.

[chiang mai]

It can take a long time to sell a house in Thailand, that said, location and choice of house and its pricing is key at the outset. It's also true to say that many many condo's take a long time to sell also!

I've been round the usufruct tree on this forum several times and with respected lawyers, my verdict is that if they are done properly and honestly, without an attempt to evade ownership laws or taxes, they are very safe for foreigners.

And yes, the payback period on home ownership here can take a long time, when compared to rental costs. But that's not really an apples and apples comparison and as someone who spent ten years in condo's here and the past twelve months in a house that I own, I confirm this is very true. Owning our own house gives us the opportunity to personalize it, maximize the efficiency and cost effectiveness of water and electricity supplies, insulate to a high standard of quality, renovate, build, add to, change and decorate, all to suit our personal tastes, without any restrictions or oversight being placed on us.

There is of course no correct blanket answer, the correct answer is different for everyone, age, personal circumstances, longer term objectives, stability of relationship and finances all play a role in arriving at the answer that's right for the individual.

[bazza40]

I on the other hand recommend you buy in order to save on wasted rental payments, if you think you need some protection, take out an usufruct.

Sadly you will only ever hear from nervous and overly cautious expats on this subject or from the ones that can't afford to buy, the satisfied farang/Thai owners are content to get on with their lives without needing to constantly bleat on about how unsafe the country for foreigners and how dangerous it is to invest here. Big yawn!

On the other hand, the OP may also hear from reckless and overly optimistic expats who have so far got away with buying and investing here. We really should have a poll of you guys, plus the embittered ones who have lost everything here. Some of them had usufructs which turned out to be worthless in the Thai legal system.

My condo rental is $4000 Australian a year. If it's wasted, I'm not wasting much in the scheme of things. I can well afford to buy a condo in CM; however, I just can't see any sense in it. A lot of construction here is basically toad shit and ceiling wax. As an owner, you are stuck with any problems.

[chiang mai]

So THB 9k a month in rent for a studio or shoe box size condo, I'll pass in favour of having a life and some space.

[GlutinousMaximus]

It can take a long time to sell a house in Thailand, that said, location and choice of house and its pricing is key at the outset. It's also true to say that many many condo's take a long time to sell also!

I've been round the usufruct tree on this forum several times and with respected lawyers, my verdict is that if they are done properly and honestly, without an attempt to evade ownership laws or taxes, they are very safe for foreigners.

And yes, the payback period on home ownership here can take a long time, when compared to rental costs. But that's not really an apples and apples comparison and as someone who spent ten years in condo's here and the past twelve months in a house that I own, I confirm this is very true. Owning our own house gives us the opportunity to personalize it, maximize the efficiency and cost effectiveness of water and electricity supplies, insulate to a high standard of quality, renovate, build, add to, change and decorate, all to suit our personal tastes, without any restrictions or oversight being placed on us.

There is of course no correct blanket answer, the correct answer is different for everyone, age, personal circumstances, longer term objectives, stability of relationship and finances all play a role in arriving at the answer that's right for the individual.

Yes - good post.

I would also add to the OP, take your time. If you've only been here a short time, wait at least 1-2 years before jumping into anything and in that time take a look around, see what you can get for the money, see what banks are offering re-possesed properties for etc., see where you like, maybe where you could run a small business etc.

The OP said his partner is Thai, and also that "I know we can not buy land" - not sure what that's about, since if his partner is a Thai national, then no problem.

I'd add to my previous posts that another disadvantage of property ownership is that it ties you to one location. I'm planning to go back to the UK for the foreseeable future, but if I do I reside in Thailand again (which is quite likely) I'd rent and sample lots of different regions for maybe 6 months at a time - Phuket, Chiang Rai, Koh Samui, Ayudhya - wherever takes my fancy. It's so easy to score a place to live, then eat cheap out on the street, it's really no problem (although potential Visa hassles being 'of no fixed abode' would be a factor I guess).

[NewInPatts]

Buying a house is actually pretty easy, especially on a new development which they are obviously trying to sell out as quickly as possible. We were in a situation looking for brand new house from a well known developer. The village was around 80% finished.

My thai wife not having worked for a few years didn't have any salary slips and my income from abroad wasn't even questioned.

He told us, we just pay 10% down, he will put everything in her name and provide the 'paperwork' for the bank to get the loan approved. We went along and 3 days later we could have signed the papers and would have had the keys for the house.

Luckily we backed out.

[slipperylobster]

So THB 9k a month in rent for a studio or shoe box size condo, I'll pass in favour of having a life and some space.

Yep. I am in chiang mai and rent 4 bedroom 4 bath for 5000 a month.

Never would pay more for a shoebox

[losworld]

Rent. Rent. Rent. Falling real estate values now too. You would be a fool to buy now.

[bazza40]

So THB 9k a month in rent for a studio or shoe box size condo, I'll pass in favour of having a life and some space.

My landlord would be most offended. 46 sqm studio, fully furnished, good location, river view, swimming pool. I do have a life. I choose to spend my money on different things to you. Perhaps you just need the space for your ego.

[slipperylobster]

I owned three large homes....won't brag..but lets just say I thought I was a high rolling, real estate tycoon. Got a divorce, prices fell through (california 1995) and bought overseas. Triple wammy that wiped me out.

One thing about a home owner...they refuse to be called out on their decision. Let these guys be, as they are happy. However, if history has any say in this, prices will go down, interest will go up (no buyers) marriages go bad, and you may find that you want to leave Thailand and build elsewhere.

There are good relationships...I am in one. That does not mean I want to invest all my savings/future income and put down a large payment. Interest could be as high as a rental...and they you have all the upkeep. Remember...first thing you will sign here is an affidavit that your money is not involved. You are betting on your wife and her family to look out for your butt. This is not what I call CYA. Add to that the political future (???) of thailand. My guess is as good as any, but I think signs of default on easily gained credit mirrors what happened back in the USA, a while back. Not to mention the legalities....inheritance rights, boundaries, property titles...liens.....OMG.

renting a large home is way more suitable for myself. especially at the prices I can get.

[jacksam]

Such sound advice from posters recommending RENT.

OP you mentioned you have 20% of value. Unless your talking about a very expensive house then that deposit is very small. You are not buying a house. You are buying less than 20%

Been together 10 years and saved how much?

[jpb1963]

as I have low tolerance threshold I looked around for a couple of days for a place and found a really nice joint in a complex called Silk Road just out of Jomtien.

they have agreed 37k thb a month (its 3 bed, 2 dunny, fully furnished, double garage, big communal park in middle, flash communal pool area, gym, games blah blah, 24 hr monitored and gated security)

based on the common theme through this thread I feel like I am paying 30kthb more than what anyone here is prepared to pay.

Have I rushed in and are there these mega cheap properties that I have missed somehow....

[GlutinousMaximus]

Such sound advice from posters recommending RENT.

OP you mentioned you have 20% of value. Unless your talking about a very expensive house then that deposit is very small. You are not buying a house. You are buying less than 20%

Been together 10 years and saved how much?

No feedback from the OP yet on all these pearls of wisdom...is this one of those topics where you just wind it up, and watch it run (and run) ?

I notice there's a similar thread about buy vs rent in this sub-forum - it's currently at 5 pages.

[chiang mai]

So THB 9k a month in rent for a studio or shoe box size condo, I'll pass in favour of having a life and some space.

My landlord would be most offended. 46 sqm studio, fully furnished, good location, river view, swimming pool. I do have a life. I choose to spend my money on different things to you. Perhaps you just need the space for your ego.

It's not about ego it's about the practicalities of life. My condo rent in Muang (Floral) was 22k a month for 150 sq metre, 2 bed/2 bath, centrally located. A year ago I bought a great house, seven years old, 180 sq metres on one rai with the most beautiful gardens you could wish for, the cost was 3 mill. When I die my wife gets the house, that gives us both peace of mind, if I continued to rent she would just get cash. More importantly, the house and garden gives us both huge satisfaction and provides for a series of projects that keep me fit and busy - the cost of our electricity consumption has fallen from an average 1,900 a month to just over 1,000 and our water from 600 a month to 200, similar savings have presented themselves as a result of not living in Muang. I have never been more fit and healthy and we have never been as happy.

[losworld]

So THB 9k a month in rent for a studio or shoe box size condo, I'll pass in favour of having a life and some space.

My landlord would be most offended. 46 sqm studio, fully furnished, good location, river view, swimming pool. I do have a life. I choose to spend my money on different things to you. Perhaps you just need the space for your ego.

It's not about ego it's about the practicalities of life. My condo rent in Muang (Floral) was 22k a month for 150 sq metre, 2 bed/2 bath, centrally located. A year ago I bought a great house, seven years old, 180 sq metres on one rai with the most beautiful gardens you could wish for, the cost was 3 mill. When I die my wife gets the house, that gives us both peace of mind, if I continued to rent she would just get cash. More importantly, the house and garden gives us both huge satisfaction and provides for a series of projects that keep me fit and busy - the cost of our electricity consumption has fallen from an average 1,900 a month to just over 1,000 and our water from 600 a month to 200, similar savings have presented themselves as a result of not living in Muang. I have never been more fit and healthy and we have never been as happy.

Nothing wrong if the owner can afford it and sees it as a retirment scheme or in lieu of rent but those who argue it is a better INVESTMENT than renting at current conditions are mistaken and those that feel they are building EQUITY may be sadly mistaken if things go rocky and the home is not in their name.

[williamgeorgeallen]

well lots of people have said it already. rent rent rent. cheap rent, expensive mortgages, little capital gain, risk of loosing it. so many reasons not to buy. hope you listen to everyone here. i have had 2 houses and some condos and although i did make a bit on one i lost on another. take it from me it was not worth all the hassle. why dont you buy 2 condos next to each other and know through?. i have 2 i can do you a deal on that i need to sell.