Western couple buying a house in thailand

[huawei]

The truth of the matter is that all of us here, including people who fancy themselves as "experienced" or "experts", are merely amateurs giving our subjective opinions. All one can do is to try to make an informed decision, based on what one wants in life. I have owned and lived in several upmarket condos in Chiang Mai, which, despite their status and price, were pretty rubbish in terms of construction. I have also looked at many moo baan houses, again, quite pricey, and found them all to be low quality construction with a gloss of "luxury": built to look good for a while, but unlikely to last.

In the end, I decided to form a company, buy land exactly where I want it and build a beautiful top quality home. After all, who, in their 60s, after 40 years of work and having a reasonable amount of money, wants to rent and live with someone else's OK location and bad taste in terms of house design, furniture and fittings? Not me!

If a Thai lawyer, trained here and in Australia, and her partner accountant, don't know how to construct a legally valid company on the basis of current legislation, then nobody on this website does, that's for sure, though they may claim to be the font of all knowledge.

I repeat: let's acknowledge that we, here, are mere amateurs, not experts in Thai legislation and its applications in practice. For that, we turn to those who are professionally qualified and really do know better....exactly as we would in our countries of origin.

I have lived here all my life. If I was coming here at 60, the last thing I would do is build a house.

In fact as I get closer to 60 I have sold my house ( child's name) and moved to a condo. It is far better for me. Security, repairs, well managed, good access to shops etc..

I have had the opportunity through work over the years to discuss with corporate lawyers of the international company I was working for about the company approach , never was it recommended and we are going back as far as 1994. This was an international law firm, the best of the best .It can be done for sure and there may or may not be consequences.

I am of the opinion that they will at some point seriously review this option. Don't under estimate the Thais.

Each to his own, enjoy your house.

[JDGRUEN]

Whether you 'buy' through one or other of the corporate schemes ... I strongly suggest renting first for six months - 9 months or a year first.. You may find out that you do not even like the city you thought would be so great - not to mention the neighborhood or immediate neighbors.

The Thai Government at any time could decide to outlaw the various schemes by which people get these long term leases to 'buy' the land a house sits on. And they won't necessarily grandfather in those who have already done it ... There is no guarantee.

[LivinLOS]

If a Thai lawyer, trained here and in Australia, and her partner accountant, don't know how to construct a legally valid company on the basis of current legislation, then nobody on this website does, that's for sure, though they may claim to be the font of all knowledge.

You seem to be willfully ignorant of the fact said lawyer is selling you what you want to be true.. they have a motive to present this as being legal when it isnt..

'current legislation' clearly forbids you 'watertight setup' that you think will always be grandfathered in.. multiple government spokespeople have made it clear time and again that nominee ownership and company route are not legit.. How much less watertight do you want it to be ??

[xylophone]

The truth of the matter is that all of us here, including people who fancy themselves as "experienced" or "experts", are merely amateurs giving our subjective opinions. All one can do is to try to make an informed decision, based on what one wants in life. I have owned and lived in several upmarket condos in Chiang Mai, which, despite their status and price, were pretty rubbish in terms of construction. I have also looked at many moo baan houses, again, quite pricey, and found them all to be low quality construction with a gloss of "luxury": built to look good for a while, but unlikely to last.

In the end, I decided to form a company, buy land exactly where I want it and build a beautiful top quality home. After all, who, in their 60s, after 40 years of work and having a reasonable amount of money, wants to rent and live with someone else's OK location and bad taste in terms of house design, furniture and fittings? Not me!

If a Thai lawyer, trained here and in Australia, and her partner accountant, don't know how to construct a legally valid company on the basis of current legislation, then nobody on this website does, that's for sure, though they may claim to be the font of all knowledge.

I repeat: let's acknowledge that we, here, are mere amateurs, not experts in Thai legislation and its applications in practice. For that, we turn to those who are professionally qualified and really do know better....exactly as we would in our countries of origin.

Quote: "In the end, I decided to form a company, buy land exactly where I want it and build a beautiful top quality home".

"If a Thai lawyer, trained here and in Australia, and her partner accountant, don't know how to construct a legally valid company on the basis of current legislation.........."

I particularly liked your last paragraph when you state that we should "turn to those who are professionally qualified and really do know better", simply because it doesn't work like that here and if you wanted proof just go and look at the blocks of apartments and condos in my town that have come to a complete standstill because of corruption/mismanagement in one form or another, all backed by legal firms, offering legal contracts and giving legal advice to purchasers.

As has been posted on this forum time and time again, forming a company for the sole purpose of buying land and building a house and thinking that you own it is a nonsense because it is illegal, yet there are probably many thousands of farangs here who have sought the advice of "reputable lawyers" and who have been directed to the "nominee company" route and this mainly because of monetary gain for the so-called "legal advisers" (proviso here – – perhaps your company was formed as a bone fide company, employing paid staff and paying tax in the first instance, if so then that is a different scenario).

For the record, I know many farangs who have bought like this and still maintain that it is legal (this although you can Google this very thing and look at the section of Thai law pertaining to it to find out that it is illegal) and I also know a couple of lawyers who are still advocating this particular route...........so if you think that a Thai lawyer, trained here and in Australia, knows how to construct a legally valid "purchase" then you are guilty of "assumption" and we know how dangerous that is.

[Pinot]

Lot of opinions here on both sides. I wonder why anyone would be advocating buying here with the state of things. Maybe they're realtors?

Come here, rent and take your time finding a place to buy. Hopefully someone will talk you out of it before you blow your money.

Most of the old hands would agree renting is the way to go but "up to you".

Let me repeat what I said earlier, everyone I know who came here and bought has already sold or is stuck what they bought and can't get out.

When the ruble fell off the table the only people who were buying (the Russians) stopped. The real estate market in Thailand is dead. The inventory of unsold property is enormous and growing daily.

Pride of ownership IMO is overrated. I've made a lot of structural changes in my rental house to get it the way I want it. At 15k baht rent a month, why not? I always owned a home in the US, would never consider it here despite a Thai wife who reminds me everyday how much she wants one.

Sorry darling, I don't knowingly make bad investments.

Edited November 17, 2015 by Pinot

[khunPer]

So the 6.2M example as 10 percent annually over 10-years should be 50k a month, so 40k sounds fair.

No where I have lived has been close..

30 - 35 million baht villa.. 70k a month.. Villa destroyed, total loss for the owner.

12 - 16 mil home on Phuket 45k a month.

12 mil asking (reality perhaps 8 mil) and its 28k a month.

Just moved to a new house.. 7 mil asking price and 30 a month, but for that he spent 300k on furnishings and new fitted kitchen. One of the worst price to rentals I have agreed in 10 year though.

Thanks for your comment, LivinLOS.

If you read my post in full, I wrote:

»Thais seems to count 10 percent annually of house construction price, but often not included the land; however some may have a higher rent, and some a lower, without any kind of (understandable) calculation.«

That is not an asking-for price or presumed selling price, included land. However, calculations and prices may be different in various areas.

A few examples from where I live, Koh Samui:

1 bed + living, small bungalow: construction price 600k, long-term annual rent 60k (excl. electric); monthly 7.5k (owner ask for little more now).

1 bed + living, bungalow: construction price 800k, long-term annually 120k (incl. electric); monthly 12k.

2 bed + living, bungalow: construction price 1.2M, long-term annually 180k (incl. electric); monthly 20k.

2 bed + living + small pool, beachfront prime location villa: construction price 2.4M (the owner told me, but to others he said 4M), monthly 100k (now 125k) including daily cleaning; asking for sales price, 2-flor villa on tiny 170 sq.m land plot w/ 6m beachfront: 25M.

-and right next to it, one in the lower end, and more like your examples; as I said “…some may have a higher rent, and some a lower, without any kind of (understandable) calculation”:

Huge 2 bed + living + pool, beachfront prime location luxury-style villa: construction price more than 15M (that was the original budget, I believe they ended up over 20M), monthly 96k.

The small bf villa is Thai owned; the huge one is foreign owned.

About the 10 percent calculation, several Thai landlords have told me – one even said that a house (not included land) would loose about 10 percent in value each year (which should be a loss of 65 percent over 10 years)...

As I see it, if you can rent well under the 10 percent level compared to realistic sales price, it’s really worth considering renting, rather than buying. If you are close to 10 percent, and other personal options are in favor for buying, then that’s worth considering.

[MaeJoMTB]

so if you think that a Thai lawyer, trained here and in Australia, knows how to construct a legally valid "purchase" then you are guilty of "assumption" and we know how dangerous that is.

I think you mean 'misplaced trust'.

That's how all con artists work, they get the mark to trust them.

[Robert24]

Lot of opinions here on both sides. I wonder why anyone would be advocating buying here with the state of things. Maybe they're realtors?

Come here, rent and take your time finding a place to buy. Hopefully someone will talk you out of it before you blow your money.

Most of the old hands would agree renting is the way to go but "up to you".

Let me repeat what I said earlier, everyone I know who came here and bought has already sold or is stuck what they bought and can't get out.

When the ruble fell off the table the only people who were buying (the Russians) stopped. The real estate market in Thailand is dead. The inventory of unsold property is enormous and growing daily.

Pride of ownership IMO is overrated. I've made a lot of structural changes in my rental house to get it the way I want it. At 15k baht rent a month, why not? I always owned a home in the US, would never consider it here despite a Thai wife who reminds me everyday how much she wants one.

Sorry darling, I don't knowingly make bad investments.

I don't think the Russians have such a big impact on the Thai real estate market as you think....

[Robert24]

some additional thoughts to the Op to consider:

- a 30 year lease is not ownership but actually a lease agreement. So be careful how you evaluate such a lease, in my opinion many of those lease agreements are completely overpriced since you are not the owner.

- buying through a company is possible, but you have some additional costs for the anual tax returns of 12-15k p.a. No issue.

- Thailand has not the same rule of law as Hong Kong where you have been before. Just bear that in mind. If something goes wrong, you cannot just go to court and think you can resolve it in the same way as in Hong Kong. Legal procedures here are lengthy, costly and not always a good way to resolve a problem.

- think about buying maybe a condo instead a house which allows you to have full ownership

- real estate market is not as liquid in Thailand as in Hong Kong, Singapore or the UK where it is very easy to sell a property. It may take more time to sell your property at a decent price.

Now in terms of your concern about paying a lot rent to another owner. That is true and one of the reason why I bought property here. Also think about whether you expect property prices to appreciate over the next years or not. If you plan to buy you should have a view on this.

hope this helps.

[Robert24]

If a Thai lawyer, trained here and in Australia, and her partner accountant, don't know how to construct a legally valid company on the basis of current legislation, then nobody on this website does, that's for sure, though they may claim to be the font of all knowledge.

You seem to be willfully ignorant of the fact said lawyer is selling you what you want to be true.. they have a motive to present this as being legal when it isnt..

'current legislation' clearly forbids you 'watertight setup' that you think will always be grandfathered in.. multiple government spokespeople have made it clear time and again that nominee ownership and company route are not legit.. How much less watertight do you want it to be ??

Well there is a risk indeed that one day someone will determine your company structure as a nominee. Especially if you have no other activities in this company except property ownership. My approach to this is to have a plan B. So if that happens, you will be given 12 months to fix that problem. Then your plan B can be either change ownership structure of the company to make it 100% Thai (say sell your shares to your Thai wife for example) or your Thai wife buys it in her name and you dissolve the company or you sell the property. Right now I think the risk is pretty low for this but recommend you have this plan B.

[trogers]

Lot of opinions here on both sides. I wonder why anyone would be advocating buying here with the state of things. Maybe they're realtors?

Come here, rent and take your time finding a place to buy. Hopefully someone will talk you out of it before you blow your money.

Most of the old hands would agree renting is the way to go but "up to you".

Let me repeat what I said earlier, everyone I know who came here and bought has already sold or is stuck what they bought and can't get out.

When the ruble fell off the table the only people who were buying (the Russians) stopped. The real estate market in Thailand is dead. The inventory of unsold property is enormous and growing daily.

Pride of ownership IMO is overrated. I've made a lot of structural changes in my rental house to get it the way I want it. At 15k baht rent a month, why not? I always owned a home in the US, would never consider it here despite a Thai wife who reminds me everyday how much she wants one.

Sorry darling, I don't knowingly make bad investments.

I don't think the Russians have such a big impact on the Thai real estate market as you think....

They do, when they all flock into a sleepy village by the sea called Pattaya...and then flew away!

[Robert24]

Lot of opinions here on both sides. I wonder why anyone would be advocating buying here with the state of things. Maybe they're realtors?

Come here, rent and take your time finding a place to buy. Hopefully someone will talk you out of it before you blow your money.

Most of the old hands would agree renting is the way to go but "up to you".

Let me repeat what I said earlier, everyone I know who came here and bought has already sold or is stuck what they bought and can't get out.

When the ruble fell off the table the only people who were buying (the Russians) stopped. The real estate market in Thailand is dead. The inventory of unsold property is enormous and growing daily.

Pride of ownership IMO is overrated. I've made a lot of structural changes in my rental house to get it the way I want it. At 15k baht rent a month, why not? I always owned a home in the US, would never consider it here despite a Thai wife who reminds me everyday how much she wants one.

Sorry darling, I don't knowingly make bad investments.

I don't think the Russians have such a big impact on the Thai real estate market as you think....

They do, when they all flock into a sleepy village by the sea called Pattaya...and then flew away!

maybe for Pattaya you are right (I don't know) but for Thailand overall the impact is close to zero in my opinion.

[Robert24]

I wrote about this on my Kamalala blog last year:

There is a strong urge for many expats to own their own home in Thailand, not a good idea. A foreigner cant own the land their property sits on. A non-Thai cannot own land. They can own the building on the land. You have to lease the land back from a Thai. A foreigner can sometimes own apartments or condominiums, under the Thailand Condominium Act. Many expats have purchased property and are happy with their purchase. Lets just say, others arent so happy.

Its simply cheaper and makes financial sense to rent. Lets take the condo I live in, for example. Its a beautiful three bedroom, 2 bath, furnished, luxury condo with 3 pools, just five minutes from the beach. The selling price for one of these units is $160,000. There is a 30 year lease, you never actually own the condo. The monthly ownership fee is $320. This covers management, security, pool service, gardeners and maintenance. If I invest $160,000 at say 6%, it comes out to be $800 a month plus the $320 for the monthly maintenance fee. Thats a total of $1,120 a month. I rent for $800 a month! By buying the unit, I would lose $320 a month and tie up a considerable amount of principal.

What about appreciation? Condos arent like fine wine, prices go down as they age. Construction standards are poor. They age miserably. The prices of condos where I live are going down in price. People dont pay a premium price for second hand units. The more expensive the unit, the smaller the market is and new units are opening every dayand not selling. The building goes on relentlessly and unsold inventory just keeps rising. There is a housing bubble in Bangkok and Phuket.

Condos are often badly managed. The money for the maintenance is squandered, spent on silly things or more likely just pocketed. A strong owners committee has to oversee how fees are being spent or else it disappears. Often the owners of a condo project go bust or fees simply arent paid. Fees collected are barely adequate to pay for costs. With a lack of basic services, building maintenance just doesnt happen and value of all units in the project goes down!

There are the usual problems with living in a condo. Noisy neighbors or noise from outside, you name it. Factors that are easily solved in the West can be a nightmare in Thailand. When you have a problem in Thailand, it is not always easily solved. Trying to solve it often escalates it to another level and youre left with one way to fix itmove!

Everything Ive written about condos goes for houses as well. I have a friend who built a luxury home on spec. Its a gorgeous home, he originally put on sale for $550k. A few years later its still unsold at $390k. Renting a property in Thailand is the way to go. It suits expats to rent because they can come and go as they please and not have money tied up in a country with an unstable government.

I suggest investment elsewhere and use the income from those investments to rent in Thailand. Places do sell, but the market is slow. There are plenty of places to rent. Rents in various parts of the country vary widely. In Phuket 10,000 baht ($300) a month would buy very little for a foreigner; however in Chaing Mai it could mean a very comfortable house or apartment. Rents are always negotiable with the low season is the time to shop. A year-long contract is the way to go, bearing in mind that the owner will want to charge more for the high season. Try and avoid doing business with a Thai landlord by the way. Make sure your lease spells out exactly how a deposit is to be returned.

Bottom line: Save your money, rent in Thailand.

What a load of tosh!!!

Yes SOME condos are badly managed, SOME condos are badly constructed and so on....RESEARCH and you avoid them. BTW Thailand uses a currency called BAHT.

6% ??? I do much better than where I invest.

Forgive me but I won't be taking your advice

it's just one sided/one dimensional in my opinion. There are pros and cons of renting vs owning, it depends on everyone's circumstance and their preference.

Personally I prefer to own property and think it's a great way to invest one's wealth but everyone can decide themselves. I think for the above author it would have been better to outline in what circumstance a purchase of property in Thailand is a good investment and considered successful and what circumstance you are better off renting.

[Paul944]

If you need a mortgage to buy property in Thailand it is not a good investment while in most cases renting the same place can be cheaper as the interest on the loan.

[huawei]

If you have to sell in your home country. You can't afford to buy here..rule 101..

[Robert24]

If you have to sell in your home country. You can't afford to buy here..rule 101..

well maybe. It depends on your circumstances again. I would not generalize and be too stringent following principles. Everyone's situation is different. From my personal experience, most people are very bad at diversifying their assets both by asset class and geographically.

[huawei]

If you have to sell in your home country. You can't afford to buy here..rule 101..

well maybe. It depends on your circumstances again. I would not generalize and be too stringent following principles. Everyone's situation is different. From my personal experience, most people are very bad at diversifying their assets both by asset class and geographically.

If you sell in a place where you are fully protected and then invest most of what you have in a place where you are not..that's just common sense, not to do so.

Agreed. Principles are for "guidance" only. But I am talking here about the majority of your wealth as opposed to discretionary spend.

[Robert24]

If you have to sell in your home country. You can't afford to buy here..rule 101..

well maybe. It depends on your circumstances again. I would not generalize and be too stringent following principles. Everyone's situation is different. From my personal experience, most people are very bad at diversifying their assets both by asset class and geographically.

If you sell in a place where you are fully protected and then invest most of what you have in a place where you are not..that's just common sense, not to do so.

Agreed. Principles are for "guidance" only. But I am talking here about the majority of your wealth as opposed to discretionary spend.

well what is protected and what not can change very quickly as history has shown. So I'm a bit skeptical about people who think their assets are safe because they are in a country they are familiar with. My personal view is to diversify geographically and not keep everything in one country.