Stop buying condos.

[KittenKong]

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.

You would have to deduct some unknown and debatable percentage from those advertised prices in order to arrive at something realistic.

Like you, I think you would be lucky to get 6% return, and in many cases well under 5% after costs would be more likely. Of course it all boils down to how much you actually buy for and what sort of rental offer you will accept, and the lack of information about this is what makes the entire Thai property purchase/rental market totally opaque.

I've grown very tired of agents saying "you could rent this unit out for x,000B/mth" or "you could sell this off-plan unit for a million Baht more when it's finished". Yes, I could do that. I could also be hit on the head by a meteorite, but how likely is that?

[trogers]

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.

One may also assumed that after 5 years, the price one paid for the condo remains the today's market value. Thus rental yield remains the same while capital gain is zero.

[WorkingTourist]

“day after purchase value goes down 30-40%, juts like car depreciation”

Does that mean we shouldn’t buy cars either?

Most things depreciate in value, so based on your logic, we shouldn’t buy anything at all.

[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.

One may also assumed that after 5 years, the price one paid for the condo remains the today's market value. Thus rental yield remains the same while capital gain is zero.

I would not assume that either.

[KittenKong]

“day after purchase value goes down 30-40%, juts like car depreciation”

Does that mean we shouldn’t buy cars either?

Most things depreciate in value, so based on your logic, we shouldn’t buy anything at all.

No, you can just buy a slightly used car. This will give you the best compromise between having something new and not paying too much for it.

Personally I buy brand new cars because I dont trust people to look after their car or drive it properly. I dont mind paying extra to be the only owner from new.

[trogers]

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.

One may also assumed that after 5 years, the price one paid for the condo remains the today's market value. Thus rental yield remains the same while capital gain is zero.

I would not assume that either.

In the extreme, you can assumed the present market value is only half of what you have paid, causing capital loss and a doubling in rental yield...?

[mcfish]

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.

One may also assumed that after 5 years, the price one paid for the condo remains the today's market value. Thus rental yield remains the same while capital gain is zero.

I would not assume that either.

In the extreme, you can assumed the present market value is only half of what you have paid, causing capital loss and a doubling in rental yield...

There is extreme and there is silly. It's nearly impossible to pay double If you do the most basic research. Of course there is always the guy that wins lotto...

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[trogers]

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.

One may also assumed that after 5 years, the price one paid for the condo remains the today's market value. Thus rental yield remains the same while capital gain is zero.

I would not assume that either.

In the extreme, you can assumed the present market value is only half of what you have paid, causing capital loss and a doubling in rental yield...

There is extreme and there is silly. It's nearly impossible to pay double If you do the most basic research. Of course there is always the guy that wins lotto...

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Not true. The shrewd investor buys distressed properties at deep discounts producing high rental yields...

[mcfish]

@ trogers

Ha ha every one on TV is a shrewd investor, you name it, stock market seems to be a done deal here, 33% gains gaureteed LMAO

Be honest, you really smashing the RE market by 50%? So why not buy 20 high end property and just retire without the hassle of rentals?

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Edited January 9, 2016 by mcfish

[trogers]

@ trogers

Ha ha every one on TV is a shrewd investor, you name it, stock market seems to be a done deal here, 33% gains gaureteed LMAO

Be honest, you really smashing the RE market by 50%? So why not buy 20 high end and property and just retire without the hassle of rentals?

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Strategy is limited to cashflow and timing of property cycles. Buy low, sell high...

[mcfish]

Cash flow should not be a problem

Unless you're new to the game and I'm seeing that you are. Buying low, selling high is hardly shrewd investing advice, better write a book on your technique if you having cash flow problems, it's worked for thousands in the past

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[trogers]

Cash flow should not be a problem

Unless you're new to the game and I'm seeing that you are. Buying low, selling high is hardly shrewd investing advice, better write a book on your technique if you having cash flow problems, it's worked for thousands in the past

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I have seen the same statements on cashflow not being a problem, and timing is immaterial 20 years ago...before Asian Financial Crisis...

And one remarkable individual ended up selling sandwiches... ?

[mcfish]

Hmm Donald trump built a 5 bill empire without cash flow problems... Look I'm just saying there are preachers and there are doers, good luck to you if your a doer but they are a dime a dozen on TV.. Apparently

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[vukovar77]

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

I think that it is almost impossible in Thailand to have some capital gain on resale!!!!

Maybe you are real-estate agent only and try to find new customers only for fee???

Thais do not want to buy used property and foreigners can buy new for almost same price or cheaper!

I am Lawyer (from Europe),but I will never buy condo or house here !

Much better option is to rent or lease!

Maybe build new and control expenses ,but still harsh !

[trogers]

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

I think that it is almost impossible in Thailand to have some capital gain on resale!!!!

Maybe you are real-estate agent only and try to find new customers only for fee???

Thais do not want to buy used property and foreigners can buy new for almost same price or cheaper!

I am Lawyer (from Europe),but I will never buy condo or house here !

Much better option is to rent or lease!

Maybe build new and control expenses ,but still harsh !

Say this thread would convince 80% of people to rent and not to buy. Who would the remaining 60% rent from?

[mcfish]

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

I think that it is almost impossible in Thailand to have some capital gain on resale!!!!

Maybe you are real-estate agent only and try to find new customers only for fee???

Thais do not want to buy used property and foreigners can buy new for almost same price or cheaper!

I am Lawyer (from Europe),but I will never buy condo or house here !

Much better option is to rent or lease!

Maybe build new and control expenses ,but still harsh !

Say this thread would convince 80% of people to rent and not to buy. Who would the remaining 60% rent from?

I dunno but I do know 70%,of the advisors to rent are busted Arse school teacher's renting where hookers live and bragging about how cheap the 2k rent a month is.

Or thailand is loaded with farang millionaires who all rent... Im going with the school teacher theory :-)

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[chrisandsu]

Or a Jonny big balls that never loses his hat . Don't you know no one loses in Thailand !! Hard to believe where all these distressed or unsaleable/overpriced properties come from .

[gk10002000]

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 :-)

A well run approach. the idea is not to try and make millions and not to go broke and at some point have the option of staying in and furnishing your own place.

[Nomyai]

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 :-)

A well run approach. the idea is not to try and make millions and not to go broke and at some point have the option of staying in and furnishing your own place.

All said and done this dude would have been better off renting!

A home shouldnt depreciate to zero live a PoRscHe................lol. Only in Pattaya!