Owning vs Renting: the basic economics

[papayasalad]

6%? in your dreams....

70 percent of people lost money in 2015.

and about these people who said my house worth double now... how you know, maybe in your dream. , did you sell it?

try to sell it to a Thai. he will say" why I should pay more for your house when I can build my own house for much cheaper than yours.? "

Not 6% -- I checked this morning and it's 6.6% - but no use if you are in US$ or Euros or some other world-dominating, low-performing currency

do you invest in Lao? I know some can make 10 percent

[jpinx]

6%? in your dreams....

70 percent of people lost money in 2015.

and about these people who said my house worth double now... how you know, maybe in your dream. , did you sell it?

try to sell it to a Thai. he will say" why I should pay more for your house when I can build my own house for much cheaper than yours.? "

Not 6% -- I checked this morning and it's 6.6% - but no use if you are in US$ or Euros or some other world-dominating, low-performing currency

do you invest in Lao? I know some can make 10 percent

I did look at Laos and Cambodia banks (see the threads on those topics) but the bulk I wanted to keep in a western currency with the same rules and safeguards, giving far greater security than a property bubble in a 3rd world asian country where you can not own the land your property stands on.

[trogers]

6%? in your dreams....

70 percent of people lost money in 2015.

and about these people who said my house worth double now... how you know, maybe in your dream. , did you sell it?

try to sell it to a Thai. he will say" why I should pay more for your house when I can build my own house for much cheaper than yours.? "

Not 6% -- I checked this morning and it's 6.6% - but no use if you are in US$ or Euros or some other world-dominating, low-performing currency

do you invest in Lao? I know some can make 10 percent

I did look at Laos and Cambodia banks (see the threads on those topics) but the bulk I wanted to keep in a western currency with the same rules and safeguards, giving far greater security than a property bubble in a 3rd world asian country where you can not own the land your property stands on.

There is a reason for the high interest - risk!

I remember finance companies in Thailand were offering over 12% pa for deposits, months before the crisis and 56 out of 58 of them were subsequently shut down.

[jpinx]

do you invest in Lao? I know some can make 10 percent

I did look at Laos and Cambodia banks (see the threads on those topics) but the bulk I wanted to keep in a western currency with the same rules and safeguards, giving far greater security than a property bubble in a 3rd world asian country where you can not own the land your property stands on.

There is a reason for the high interest - risk!

I remember finance companies in Thailand were offering over 12% pa for deposits, months before the crisis and 56 out of 58 of them were subsequently shut down.

The risk is, as I said, considerably less than a property bubble. Standard and Poor's don't give credit rating easily.

[losworld]

How does an investor of financial instruments in the West insure against money printing by the government? ?

If you're talking about inflation, owning real estate is one of the best hedges against it. The home I bought in 1969 for $US9,900 would cost you $200,000 today. Back then the rental value was about $100 per month and today it would be more like $1,500. What if I had bought ten of them? Wouldn't I then want "money printing" and inflation?

The US doesn't "print money". It borrows it, thus the increase in national debt. It is internally illegal for the US to print money for spending. The only western area I know of that prints money for spending is the Eurozone and it is rotten to the core.

Cheers.

The U.S. would be far better off if it simply printed its own money. Instead it lets the Federal Reserve print it's money for it then charge it interest on top of it. This is called fiat money as it is not even attached to any value such as a gold standard. If people take the time to actually understand what is going on they will quickly see the corrupt process.

[losworld]

How does an investor of financial instruments in the West insure against money printing by the government? ?

If you're talking about inflation, owning real estate is one of the best hedges against it. The home I bought in 1969 for $US9,900 would cost you $200,000 today. Back then the rental value was about $100 per month and today it would be more like $1,500. What if I had bought ten of them? Wouldn't I then want "money printing" and inflation?

The US doesn't "print money". It borrows it, thus the increase in national debt. It is internally illegal for the US to print money for spending. The only western area I know of that prints money for spending is the Eurozone and it is rotten to the core.

Cheers.

The U.S. would be far better off if it simply printed its own money. Instead it lets the Federal Reserve print it's money for it then charge it interest on top of it. This is called fiat money as it is not even attached to any value such as a gold standard. If people take the time to actually understand what is going on they will quickly see the corrupt process.

Quantitative easing is really nothing more than printing money to prop up the stock market and make payments on foreign debt easier.

[MaeJoMTB]

O.K.! O.K.!....You convinced me!

I shouldn't have bought my Bangkok house for 3.5 million Baht (which is now worth 5 million baht)

I shouldn't have invested in a beach front 2 bd townhouse for 2.2 million baht (and later sold it for 4.5 million baht)

I shouldn't have then invested in beach front land and built 6 one bedroom 2 bath units for 9 million (now worth at least 25 million)

Whoa is me ....what am I going to do? ....RENT, RENT, RENT is my manta

I think I'll get a job teaching!

Stuff you did 10 years ago, you can't do now.

PS

It's only worth what you sell it for, not what you think it might sell for at some imaginary future date.

What was the name of that Fat Brit whose wife sold all his property out from under him?

I'm betting he was counting his imaginary profits too.

PPS

Gave my wife the 10% deposit on a house in CM two years ago, the houses were selling fast for 1.8M.

Today the same new build houses are selling for 2M bht ....... two roads of them left and no buyers at all.

Did my misses make 200k profit?

In her mind she did, she doesn't understand you need a buyer before you count your profit.

[beachproperty]

O.K.! O.K.!....You convinced me!

I shouldn't have bought my Bangkok house for 3.5 million Baht (which is now worth 5 million baht)

I shouldn't have invested in a beach front 2 bd townhouse for 2.2 million baht (and later sold it for 4.5 million baht)

I shouldn't have then invested in beach front land and built 6 one bedroom 2 bath units for 9 million (now worth at least 25 million)

Whoa is me ....what am I going to do? ....RENT, RENT, RENT is my manta

I think I'll get a job teaching!

Stuff you did 10 years ago, you can't do now.

PS

It's only worth what you sell it for, not what you think it might sell for at some imaginary future date.

What was the name of that Fat Brit whose wife sold all his property out from under him?

I'm betting he was counting his imaginary profits too.

And in another 10 years you will be saying the same thing...."Stuff you did 10 years ago, you can't do now"

And if my wife of 12 years sell it .....so be it, it was meant for her anyway ...No great loss also, as most of my assets are in the states. Plus the beach units are bringing in 1,200,000 a year so I'm getting something now. And when i die......I won't care, I'm dead

ps ....the house in Bangkok is 400 sq meter 5 bed and 4 bath house...that works out to 12,500 baht a sq meter ....Can't build for that price! so the 5 million is low

[MaeJoMTB]

And in another 10 years you will be saying the same thing...."Stuff you did 10 years ago, you can't do now"

And if my wife of 12 years sell it .....so be it ...No great loss, as most of my assets are in the states. Plus the beach units are bringing in 1,200,000 a year so I'm getting something now. And when i die......I won't care, I'm dead:blink:

ps ....the house in Bangkok is 400 sq meter 5 bed and 4 bath house...that works out to 12,500 baht a sq meter ....Can't build for that price! so the 5 million is low

10 years ago, I would have been happy to risk a bit on land and property here, 70bht to the GBP, land prices 1/20 of today (30k/rai).

Today with only 50bht to the gbp, and land at 600k/rai, not sensible for me.

And you don't even seem to have a firm grasp on build costs.

My wife's house build was around *9,000bht/m2 and the developer was making at least 40% profit from that price.

PS

Now we see you're estimating the profit you are making from a house in your Thai wife's sole name.

The perfect investment!

[beachproperty]

10 years ago, I would have been happy to risk a bit on land and property here, 70bht to the GBP, land prices 1/20 of today (30k/rai).

Today with only 50bht to the gbp, and land at 600k/rai, not sensible for me.

And you don't even seem to have a firm grasp on build costs.

My wife's house build was around *9,000bht/m2 and the developer was making at least 40% profit from that price.

*Thai build cost of course, not build cost quoted to a foreigner.

Ahhhh.....but I do a firm grasp on build costs.

Last year, finished the 600 sq meter beach property (with double walls, 12mm double pane glass, built in kitchens, 12 bathrooms with marble in all, with all the fittings including air, water tanks, pumps, and hot water heaters, etc) for a tad less than 6 million Baht. say 10,000 Baht a sq meter. so I'm not sure what your point is

Not built to the same "crap" standards that a typical estate house is built....single walls, 6 mm window and only a "shell" of a house.

[MaeJoMTB]

so I'm not sure what your point is

My point being, you have made a 100% loss already.

Doesn't matter why, it's gone.

Most of us don't want to throw that much money away.

[beachproperty]

so I'm not sure what your point is

My point being, you have made a 100% loss already.

Doesn't matter why, it's gone.

Most of us don't want to throw that much money away.

Most of you DON'T even have that much money. And besides I want to take care of my wife and family......and you?

[MaeJoMTB]

so I'm not sure what your point is

My point being, you have made a 100% loss already.

Doesn't matter why, it's gone.

Most of us don't want to throw that much money away.

Most of you DON'T have that much money. And besides I want to take care of my wife and family......and you?

I already answered that, gave her the 10% deposit for a house, and if she lives with me another 23 years ..... the repayments as well.

Zero risk to me.

On the other hand, you've bet the house.

(But from your posts I'm guessing you've bet EVERYTHING)

But this thread is about buy Vs rent,

Most of us can't afford to throw millions of baht away, so rent is the best idea (at this current time).

Though harping back to the fat Brit ....... he had that much money, now he doesn't.

And in the interviews he gave, exactly the same as you, he wanted to take care of his wife and family.

Wonder what his wife wanted?

Clearly not him or his children.

[jpinx]

The arrogance is positively insulting

[Naam]

And in another 10 years you will be saying the same thing...."Stuff you did 10 years ago, you can't do now"

And if my wife of 12 years sell it .....so be it ...No great loss, as most of my assets are in the states. Plus the beach units are bringing in 1,200,000 a year so I'm getting something now. And when i die......I won't care, I'm dead:blink:

ps ....the house in Bangkok is 400 sq meter 5 bed and 4 bath house...that works out to 12,500 baht a sq meter ....Can't build for that price! so the 5 million is low

10 years ago, I would have been happy to risk a bit on land and property here, 70bht to the GBP, land prices 1/20 of today (30k/rai).

Today with only 50bht to the gbp, and land at 600k/rai, not sensible for me.

And you don't even seem to have a firm grasp on build costs.

My wife's house build was around *9,000bht/m2 and the developer was making at least 40% profit from that price.

PS

Now we see you're estimating the profit you are making from a house in your Thai wife's sole name.

The perfect investment!

"land at 600k/rai" = dirt cheap! the last lot sold in my moo baan (july 2015) was THB 28,000 / wah², 10 years ago i paid 17,800 / wah².

[MaeJoMTB]

"land at 600k/rai" = dirt cheap! the last lot sold in my moo baan (july 2015) was THB 28,000 / wah², 10 years ago i paid 17,800 / wah².

Poor investment there Naam ........ 50% rise in 10 years.

Should have purchased in Mae Rim ....... 2000% rise in 10 years.

You could have been RICH!

[beachproperty]

The arrogance is positively insulting

Not arrogance ....just the truth....and if the truth hurts ...so be it

[beachproperty]

"land at 600k/rai" = dirt cheap! the last lot sold in my moo baan (july 2015) was THB 28,000 / wah², 10 years ago i paid 17,800 / wah².

Poor investment there Naam ........ 50% rise in 10 years.

Should have purchased in Mae Rim ....... 2000% rise in 10 years.

You could have been RICH!

BUT ....property is a poor investment according to you.....so you now advocate it

[jpinx]

The arrogance is positively insulting

Not arrogance ....just the truth....and if the truth hurts ...so be it

The truth is never arrogant Property bubbles come and go at the whim of who-knows-what. Your situation reminds me of the guys who asked how to make a small fortune in Thailand -- to which the answer is -- start with a large one,,,,,

[beachproperty]

The arrogance is positively insulting

Not arrogance ....just the truth....and if the truth hurts ...so be it

The truth is never arrogant Property bubbles come and go at the whim of who-knows-what. Your situation reminds me of the guys who asked how to make a small fortune in Thailand -- to which the answer is -- start with a large one,,,,,

Since this is about buying vs renting......you getting a little off topic.

BUT since you probably don't have the money to buy ( 50 ish and a teacher) you would know nothing about buying even if you wanted to. That's OK, because your in the same boat as 90% of the other expats in Thailand ....You just trying to justify you position, ....I understand

4

[jpinx]

Since this is about buying vs renting......you getting a little off topic.

BUT since you probably don't have the money to buy ( 50 ish and a teacher) you would know nothing about buying even if you wanted to. That's OK, because your in the same boat as 90% of the other expats in Thailand ....You just trying to justify you position, ....I understand

Attempting to second guess another posters situation is a sure-fire way to make a fool of yourself. The topic is owning vs renting and I have been suggesting methods of financing styles of living that make renting a viable option, even to someone who has enough money to buy. As has been said many times -- it's a highly personal decision -- there's no single solution that will suit everyone, but when making the assessment it is useful to have all the facts to hand.

[Craig krup]

Horses for courses..... someone once said that only a fool gets emotionally attached to his wealth. There is nothing in the equations above to take in the costs of maintaining a building. There's no leaking roofs on a good investment -- currently about 5% available in western markets with an acceptable credit rating.

"Currently about 5% available...." of which TAXES have to paid!

That's NET of taxes

Doubtful ....."Risk ...Reward"

Securities Trust of Scotland, Murray International, Blackrock Income Strategies and Dunedin Income Growth. 5% tax free/tax paid (Osborne just tweaked the system). I'm well down on where I was twelve days ago, and well up on where I was when I started in 1997. In terms of risk and reward I venture to suggest that spreading an investment around every country and region in the world, every currency, and with the whole thing regulated in the UK, US or Europe is a tad less risky than buying one property in a country with a history of military takeovers where you have no legal status.

But then I don't suppose you're too keen on anyone trying to tell you anything.

[LostDemocracy]

And in Thailand, with its flaky politics and basically racist, xenophobic attitude, there may come a day when you have to leave in a hurry and you can't take your house with you.

[LukKrueng]

If you are talking about buying a house and the legality issues around it - you are probably right. If you are talking about a condo unit, or buying with a trusted wife/partner and not talking about the risks of losing the property due to relationship go bad, then I only agree with you to a point. Of course there is opportunity costs. If you have only the said amount you can only do 1 thing OR the other. Putting this point aside, I would say I think it is not easy in Thailand to buy something you can afford now in order to sell and buy bigger / better later. So if you consider only a short to mid term time - go for rental. If you can afford (with or without mortgage) the place you will stay in for life, then buying is better.

As for mortgage - if your interest payment are equal or more than the rent you'd pay for the same type of place - rent!!

I rented a very big unit for a very cheap price for many years. Should I have bought it and paid interest on mortgage, the interest alone would have been nearly double the amount I paid for rent.. I had constant arguments with my wife (who wanted to buy).

However there is a psychological up side for owning - it does give a sense of security and that by itself worth a lot.

[jamie2009]

I like the Ops analysis, it makes a nice change, most posters on previous threads ignore what the money could have been used for elsewhere. A couple of exceptions...

A lot of guys won't have the knowledge or confidence to invest in the stock market, so their alternative choice is cash deposits where the rate is 0.5-2.5%, not a lot really.

Plus investments can go down rather than up as they frequently do as can be seen in the last week with the China drop and the great fall of China last summer.

I like to invest in stock markets but it is gambling, be clear about that.

They always say, the older you are, the less appetite for risk you would have. So, property investment is a class of asset for the aged...?

You can gamble it all away when you are in your 30s and single. You still have a few decades to make it back. But not for those with only a decade or two left...

I couldn't agree more, too repeat when you are younger you have a lifetime to recoup your finances. I am 64 and if I lost every thing there is no way I could recoup my losses, I like to be in control of my finances and if it's in property I have no control over it whatsoever especially in Thailand unless you own a condo.

[trogers]

I like the Ops analysis, it makes a nice change, most posters on previous threads ignore what the money could have been used for elsewhere. A couple of exceptions...

A lot of guys won't have the knowledge or confidence to invest in the stock market, so their alternative choice is cash deposits where the rate is 0.5-2.5%, not a lot really.

Plus investments can go down rather than up as they frequently do as can be seen in the last week with the China drop and the great fall of China last summer.

I like to invest in stock markets but it is gambling, be clear about that.

They always say, the older you are, the less appetite for risk you would have. So, property investment is a class of asset for the aged...?

You can gamble it all away when you are in your 30s and single. You still have a few decades to make it back. But not for those with only a decade or two left...

I couldn't agree more, too repeat when you are younger you have a lifetime to recoup your finances. I am 64 and if I lost every thing there is no way I could recoup my losses, I like to be in control of my finances and if it's in property I have no control over it whatsoever especially in Thailand unless you own a condo.

Yes, a condo, so that my name is on the title deed. Otherwise, there is added risk that we are not even able to quantify.

[Emster23]

Maintenance is factored into rent (although actual maintenance may not take place....) so that is a moot point. Same with dues to condo association. Not all of us want to own a house. I bought my condo 10 years ago for cash back when dollar had better exchange rate. It's been long paid off in terms of rent not paid. I could just walk away from it and still come out ahead.

[LNKDES1]

What a weird analysis.

You only focus on the cost, and even though for most people who rent, there is an owner behind the scenes making money on them, you somehow ended up concluding that the rational choice is to rent.

But regardless of economy, I didn’t buy in Thailand because it is the perceived cheaper long-term choice, but because it was the only way I could get exactly what I wanted, as I can’t make significant changes to rented property.

And if you are allowed & do make changes (at your own expense), I can almost guarantee you the owner/landlord will increase your rent. They feel that the property is worth more now.

[trogers]

What a weird analysis.

You only focus on the cost, and even though for most people who rent, there is an owner behind the scenes making money on them, you somehow ended up concluding that the rational choice is to rent.

But regardless of economy, I didnt buy in Thailand because it is the perceived cheaper long-term choice, but because it was the only way I could get exactly what I wanted, as I cant make significant changes to rented property.

And if you are allowed & do make changes (at your own expense), I can almost guarantee you the owner/landlord will increase your rent. They feel that the property is worth more now.

No. The owner would likely not extend the lease on expiry, and rent it out to another at a higher price...?

[Naam]

"land at 600k/rai" = dirt cheap! the last lot sold in my moo baan (july 2015) was THB 28,000 / wah², 10 years ago i paid 17,800 / wah².

Poor investment there Naam ........ 50% rise in 10 years.

Should have purchased in Mae Rim ....... 2000% rise in 10 years.

You could have been RICH!

i never considered the homes i owned and lived in an investment. in fact i always lost when selling as opposed to my wife who made nice profits with a fistful of condos (not in Thailand). but after my demise she will incur, what some people might consider a huge big loss, selling our present home because she won't stay in the Land of Smile. but she will smile taking that loss what she and i consider peanuts.

and now let's talk about arrogance