Stop buying condos.

[Nomyai]

unless you are willing to die in one.

!. build property-value to you when finished- ZERO!

2. Buy condo- day after purchase value goes down 30-40%, juts like car depreciation.

[TheCruncher]

[KittenKong]

One of my New Year resolutions will definitely be to not buy any more condos here.

I will have no trouble keeping to that one at all.

[cyberfarang]

You don`t buy a condo, you rent a period on the lease.

[kannot]

bought 3 in the last year very cheap , sold four in the last two years mad e good profit your'e talking tripe also rented those four for 7 years getting 10% rental over purchase price........good day

[cyberfarang]

bought 3 in the last year very cheap , sold four in the last two years mad e good profit your'e talking tripe also rented those four for 7 years getting 10% rental over purchase price........good day

Like all properties in Thailand I would guess investment levels depends on the locations. A property speculator like yourself would know his business and buy in the most developed and desirable areas. For the average Joe buying a condo at a minimum price for the purposes of living accommodation would probably lose out on the deal later on.

[KittenKong]

You don`t buy a condo, you rent a period on the lease.

? I have a chanote in my name. No leases involved. And my building owns the land it's built on so no leases there either.

I would never touch 30-year leases anywhere, and certainly not in Thailand.

[trogers]

"Buy condo- day after purchase value goes down 30-40%, juts like car depreciation"

You must be referring to those newly completed condo building with the huge signboards offering Resale units...? and in most instances, you are correct because they are way overpriced, first by the developer during launch, and then by flippers.

That's why the resale units come about.

But you can find bargains in the secondary market...

[jay1980]

I bought a condo 6 years ago for 1.4 million baht. I bought in the farang allocation for the building and the chanote in my name, not a lease or company name.

I spent the next 5 years renting it out while living outsideThailand and because I was not greedy with what I was asking rent wise I had 95% occupancy. After management and agent fee's I made back a net 500,000 baht over those 5 years.

The begining of 2015 I moved into my condo and have lived in it myself for a year now saving about 140,000 baht from if I rented a similar unit in my building, so my condo current owes me only 760,000 baht. I could sell now way under the market for condo's in my building and still be in the black.

If rents in my building stay the same for the next 5.5 years and I live in it for this period of time I will effectivally be living for free.

I did not buy a condo in Thailand to make a massive profit on the capital purchase price like you can in the west, I bought because it made sense over a longer period to own and I had a spare 1.4 million baht from a business deal that went well in my home country.

Just to put it into perspective my business partner at the time back in my home country got an equal windfall from that deal and he spent it the equivalent of 1.4 million baht on a nearly new Porsche Cayenne that is now worth about 300,000 baht thanks to depreciation.

Another reason I like my own condo here over renting is I can make changes and upgrades to suit my requirements, I have recently changed my kitchen to accommodate a western style front loading washing machine and fitted new worktops and a new hob and added additional power outlets for example. I have also upgraded the furniture with a quality bed and sofa that is much more comfortable than what is typically provided in rental's, all things I could not do if I was just renting.

Overall I am happy to have bought my condo and I will be even more happy in a few years when I will have reached the point where it really owes me nothing :-)

Edited January 5, 2016 by jay1980

[KittenKong]

Everyone's individual calculations will be different (and once you start factoring in perceived benefit from living in a place it all becomes irrelevant anyway) but if you had invested that 1.4MB in a standard US index tracker 6 years ago it would today be worth about double that. And you would have received some regular dividends too, all without spending anything at all on upkeep or improvements. And you would be able to sell those shares today for their full value, without paying more than a few USD in fees, and get the money tomorrow. One cant say any of that about a Thai condo.

I imagine that your partner got satisfaction from his car so he should also be happy, though like you it's certainly not the sort of thing that I would spend my money on.

[trogers]

Everyone's individual calculations will be different (and once you start factoring in perceived benefit from living in a place it all becomes irrelevant anyway) but if you had invested that 1.4MB in a standard US index tracker 6 years ago it would today be worth about double that. And you would have received some regular dividends too, all without spending anything at all on upkeep or improvements. And you would be able to sell those shares today for their full value, without paying more than a few USD in fees, and get the money tomorrow. One cant say any of that about a Thai condo.

I imagine that your partner got satisfaction from his car so he should also be happy, though like you it's certainly not the sort of thing that I would spend my money on.

I believe the US Index is preparing to fall, starting 2016...?

[jay1980]

Everyone's individual calculations will be different (and once you start factoring in perceived benefit from living in a place it all becomes irrelevant anyway) but if you had invested that 1.4MB in a standard US index tracker 6 years ago it would today be worth about double that. And you would have received some regular dividends too, all without spending anything at all on upkeep or improvements. And you would be able to sell those shares today for their full value, without paying more than a few USD in fees, and get the money tomorrow. One cant say any of that about a Thai condo.

I imagine that your partner got satisfaction from his car so he should also be happy, though like you it's certainly not the sort of thing that I would spend my money on.

I would have also paid 40% tax on the profits from those dividends and capital gains tax on any profits. I already do have money invested in the UK stock market (not the US) as well as UK property that does show a far superior gain on the net profit then I would get if I sold out at the current market value to my Thai condo so I understand your point but I think it is wise to spread risk when it comes to purchases and investments.

At the time my accountant did suggest 'buying something nice' rather than reinvesting and taking my UK assets to a higher level that might have put me on the radar of the UK tax office (everything was being done by the book but I might have had spent time and money proving it), moving some money to Thailand to buy a condo avoided the issue (just like buying an expensive car, boat of something like that would have)

I have some shares in an oil company that seemed like a sure thing a few years ago but are horrible now, showing a paper loss way down on what I would lose on my Thai condo if I walked away tomorrow. I could have made better investments with that 1.4 million but I could have made way worse investments too, however I never really look at my Thai place as an investment, I bought it because I wanted a place of my own in this region and a base in SE Asia and I like being able to personalise my place here.

I am not saying buying a condo here is the right thing of everyone to do and it scares me when people tell me they are using all of their net worth to buy Thai property but for me and many others buying does make sense and the OP's opening statment does suggest 'one size fits all' and anyone who buy's in LOS is a mug who will lose all their money and be miserable and IMO this is not the case.

I several friends who own condo's here at all levels, from a friend who bought a small unit for 800K in an older building a few years ago and lives in it half of the year though to a friend who has a 15 million baht 160 m/sq high end unit in bangkok and they are all happy with their purchases.

All the best with your investments and living arrangements whatever thay many be.

Edited January 5, 2016 by jay1980

[KittenKong]

I fully understand that individuals may have some exposure to taxes that may alter the way they view their investments, though in most cases exposure to income and capital gains tax should be minimal on such a small sum over such a long time. And not forgetting that your returns in Thailand should be declared also and tax paid on them.

But I was just trying to point out that a basic comparison over the period specified using two currencies that dont vary too much against each other shows a significantly higher return for stocks than for your Thai condo. And in fact I think that this is generally the case over any extended period (with obvious exceptions for periods of unusual world-wide economic upheaval).

On the other hand a house I bought in Europe increased in value 5-fold in 20 years, and one in the UK increased by 17-fold in 35 years. One of those also provided a decent income over that time and the other provided my own accommodation plus a good income over that time. Compared to that, for me Thai property is not a very attractive investment. That said I do own my own condo here, but not because I expect it ever show any sort of profit.

[mcfish]

Location!!.. My place is 3 minutes walk from Nana bts and never stays unrented. I m getting well over 10% and would buy 5 more if I could!

Sent from my SC-01D using Tapatalk

[Paul944]

Stop buying condo's, don't drive too fast, never wear pink shirts. Thanks for the advice but let it be advice only and not the law.

[KittenKong]

Stop buying condo's, don't drive too fast, never wear pink shirts.

Good on all three counts already.

Do I get a prize?

[questionsreplies]

What about trying to know something before saying itb?

You don`t buy a condo, you rent a period on the lease.

[passedout]

Location!!.. My place is 3 minutes walk from Nana bts and never stays unrented. I m getting well over 10% and would buy 5 more if I could!

Sent from my SC-01D using Tapatalk

That’s a pretty good return!

What kind of value would that place have roughly to get such a return?

Less than 5 M b

Between 5M b and 10M b

More than 10M b

[trogers]

Location!!.. My place is 3 minutes walk from Nana bts and never stays unrented. I m getting well over 10% and would buy 5 more if I could!

Sent from my SC-01D using Tapatalk

Thats a pretty good return!

What kind of value would that place have roughly to get such a return?

Less than 5 M b

Between 5M b and 10M b

More than 10M b

Location is Nana. Demand would likely be from bachelors with their lifestyles, and not family. Build on these premises... Edited January 6, 2016 by trogers

[guzzi850m2]

Especially the decorating part is nice to be able to do when you own your own condo/house, making improvements and so on.

Yes everybody's situation are different, I know an expat in the Sonkla area (deep south) and him and the wife build a couple of apartments blocks with cheap rental units, boy they are earning money man, every month.

[mcfish]

Location!!.. My place is 3 minutes walk from Nana bts and never stays unrented. I m getting well over 10% and would buy 5 more if I could!

Sent from my SC-01D using Tapatalk

That’s a pretty good return!

What kind of value would that place have roughly to get such a return?

Less than 5 M b

Between 5M b and 10M b

More than 10M b

Bought 10 years ago sub 5 mill 74sqm . I also invested in the stock market for diversity and did my dough. I regret doing that and buying high risk stock but, live n learn.

Sent from my SC-01D using Tapatalk

Edited January 6, 2016 by mcfish

[mcfish]

Location!!.. My place is 3 minutes walk from Nana bts and never stays unrented. I m getting well over 10% and would buy 5 more if I could!

Sent from my SC-01D using Tapatalk

Thats a pretty good return!

What kind of value would that place have roughly to get such a return?

Less than 5 M b

Between 5M b and 10M b

More than 10M b

Location is Nana. Demand would likely be from bachelors with their lifestyles, and not family. Build on these premises...

Bang on! Average age is 50 middle class

Sent from my SC-01D using Tapatalk

[passedout]

Location!!.. My place is 3 minutes walk from Nana bts and never stays unrented. I m getting well over 10% and would buy 5 more if I could!

Sent from my SC-01D using Tapatalk

That’s a pretty good return!

What kind of value would that place have roughly to get such a return?

Less than 5 M b

Between 5M b and 10M b

More than 10M b

Bought 10 years ago sub 5 mill 74sqm . I also invested in the stock market for diversity and did my dough. I regret doing that and buying high risk stock but, live n learn.

Sent from my SC-01D using Tapatalk

Is the 10% return based on what you paid for the apt 10 years ago or on today's value? That will make a big difference on calcs...

[trogers]

Location!!.. My place is 3 minutes walk from Nana bts and never stays unrented. I m getting well over 10% and would buy 5 more if I could!

Sent from my SC-01D using Tapatalk

Thats a pretty good return!

What kind of value would that place have roughly to get such a return?

Less than 5 M b

Between 5M b and 10M b

More than 10M b

Bought 10 years ago sub 5 mill 74sqm . I also invested in the stock market for diversity and did my dough. I regret doing that and buying high risk stock but, live n learn.

Sent from my SC-01D using Tapatalk

Is the 10% return based on what you paid for the apt 10 years ago or on today's value? That will make a big difference on calcs...

I do not see how the quantum of return would change.

Total return = rental yield + capital gain

Should rental yield fall due to an increase in capital value, this increase is captured in capital gain.

[passedout]

Not sure whether mcfish included the capital gain in his calculations people normally don’t. I’ll rephrase my question.

If for argument sake this property in Nana right now is worth 8M b, or at least there are very similar ones for sale in the same location around that price, is the achieved rent 800K b a year?

Cheers

[mcfish]

Not sure whether mcfish included the capital gain in his calculations people normally don’t. I’ll rephrase my question.

If for argument sake this property in Nana right now is worth 8M b, or at least there are very similar ones for sale in the same location around that price, is the achieved rent 800K b a year?

Cheers

No capital gains, I'm using the figure I paid 10 years back

Sent from my SC-01D using Tapatalk

[KittenKong]

Bought 10 years ago sub 5 mill 74sqm . I also invested in the stock market for diversity and did my dough. I regret doing that and buying high risk stock but, live n learn.

Is the 10% return based on what you paid for the apt 10 years ago or on today's value? That will make a big difference on calcs...

I do not see how the quantum of return would change.

Total return = rental yield + capital gain

Should rental yield fall due to an increase in capital value, this increase is captured in capital gain.

Yes, but the capital gain wont be known until the unit is sold.

Also one should compare with what could have been earned elsewhere from other investments.

[passedout]

Bought 10 years ago sub 5 mill 74sqm . I also invested in the stock market for diversity and did my dough. I regret doing that and buying high risk stock but, live n learn.

Is the 10% return based on what you paid for the apt 10 years ago or on today's value? That will make a big difference on calcs...

I do not see how the quantum of return would change.

Total return = rental yield + capital gain

Should rental yield fall due to an increase in capital value, this increase is captured in capital gain.

Yes, but the capital gain wont be known until the unit is sold.

Also one should compare with what could have been earned elsewhere from other investments.

I believe you could have a fairly good idea on your gains by checking out the price of other similar properties for sale in the area and maybe asking some nearby agent about some sales that went through recently if you’re friendly enough with any of them.

More importantly my point was should I buy that apt tomorrow would I get 10% return on my money not including capital gains? By the sound of it is a no. Most likely it will be around 5 – 6.5% gross and after all the yearly cost, agent commissions and possibly tax will be down to 3 – 4.5%.

Just surmising from reading other threads and I would be more than happy to be corrected.

Edited January 6, 2016 by passedout

[trogers]

Bought 10 years ago sub 5 mill 74sqm . I also invested in the stock market for diversity and did my dough. I regret doing that and buying high risk stock but, live n learn.

Is the 10% return based on what you paid for the apt 10 years ago or on today's value? That will make a big difference on calcs...

I do not see how the quantum of return would change.

Total return = rental yield + capital gain

Should rental yield fall due to an increase in capital value, this increase is captured in capital gain.

Yes, but the capital gain wont be known until the unit is sold.

Also one should compare with what could have been earned elsewhere from other investments.

If you are to assume your property has a today's market value to adjust the rental yield downwards (assuming rent remains unchanged), you can use the same market value to derive the capital gain.

[KittenKong]

If you are to assume your property has a today's market value to adjust the rental yield downwards (assuming rent remains unchanged), you can use the same market value to derive the capital gain.

Indeed, but I would not assume that. Advertised prices in Thailand are not realistic.