30 Year Lease to build home and rental units

[Konini]

I'm just at the bright idea stage of things, and need someone to either encourage me or burst my balloon.

I have long thought of securing a 30 year lease on a very basic house or land and renovating or building - I have project managed builds previously and am a bit of a whiz at DIY for finishing which takes most of the money (I am not a man, by the way).

My latest idea is to combine investment and living accommodation - build or renovate to have some low cost (Thai renters) units on part of the property and our living accommodation on another, or perhaps a 2 storey building with our living quarters upstairs.

We have no children to leave a legacy to, and if we last 30 more years I'll be surprised as well as content to have had my money's worth. We have rental properties in central Melbourne and a house in England. I have thought through the financial implications and having some cheaply built cheaply rented units would perhaps pay the monthly lease on the land. I haven't gone through the figures with a fine toothcomb at this stage, it would be easier to find out if it is possible for us to do this before doing due dillegence.

So my question is quite simple. We have now thankfully reached the age where we have secured a retirement visa. Owning 4 or 5 rental units on a leased block of land will probably change our residency status. No problem if we have to pay income tax, taxes are a part of life. I know we can secure a solid 30 year lease. I need to know if by renting out units we build on this land would mean that we would need an investment or business visa. We wouldn't collect the rent personally, we would offer a lower rent to one of the tenants to collect rent and maintain the common grounds (if this is allowed, otherwise we would have to have tenants found by real estate agents with monthly rentals paid by direct payment into our bank, not sure if this would be considered as 'working'.

We are not thinking of spending a huge amount of money here, simple cheap build - we have friends who have had great success with shipping container builds, and they are a lot more practical than most people think, but that's idea's for the future once we know once it is established whether or not we can do this. I believe investment visa's will involve very large amounts of money and we are not prepared to risk more than we can afford to lose.

If anyone can advise - not on the concept, we are successful investors and have thought this 30 year lease and upfront costs through - whether it is possible for us to build not only accommodation for ourselves but for others to subtlet, most importantly our visa status, I would be very grateful.

[Konini]

On reflection I may not have made myself totally clear.

We are in our early 50's. Whether we build a home for ourselves or build an investment to pay the annual lease fees, by the time we are in our early 80's we will probably be either dead or back home in care homes with sufficient funds to make us OK. If we can get 30 years - or even 20 years - of living in a house we build ourselves, with me laying the electricity wires and water pipes, just employing a 'professionals' to hook us up to the mains, so that I know it's all done properly and we're safe, we'll be happy.

Any rental part of the deal will just be a bonus, a risk of $20 -30,000 extra would just be a sideline and not really important. I just need to know the visa regulations should we decide to go this way. Not a hotel or guesthouse, rental units. No Thai friend, wife or girlfriend involvement, we are a farang couple. Leasing land we could put our own home on would be enough, building rental units would be a project for me. Perhaps a challenging one, but I had a very high pressure job and retirement is leaving me rather bored.

Repeat - we have no children to leave money to, just a lot of nieces and nephews who will probably fight over whatever is left, and good luck to them. Our intentions are to die penniless.

[fosseway]

Sorry to burst your bubble, but pipe and dream are the first two words that spring to mind.

Your first problem would be securing a work permit, and from what you describe, there would be no way you would qualify for one, without this, you would run the risk of immigration problems.

[blackcab]

I don't see a problem with the work permit. The problem would arise with having Thai tenants living right on your doorstep.

Listen to me when I say this. I work for a company that owns lots and lots and lots of cheap rooms that are 99% occupied by Thai people. In the last 12 months we have had the police raid our buildings for drugs (they found them). We have had a group of guys turn up with guns intending to shoot one of our tenants (they didn't find him). We have had anti social behaviour like you wouldn't believe (food and rubbish thrown off balconies; loud music; one couple having sex with their door wide open). We have had one guy drink toilet cleaner then drive his car through a neighbours fence. Non payment. Runners. One woman jamming God knows what down a drain until we were at a loss about how to unblock it. Last night one guy got so drunk he didn't know which room he lived in (lots of choice) so he banged on all the doors. One single female living alone got scared and climbed over her 3rd floor balcony to escape and fell off. I don't know how but she's mostly ok and didn't die.

Trust me when I say this: You do not want tenants living in cheap accommodation on the same land as you. Believe me, it would be the worst mistake you made for quite a while.

(I will add that we have many very decent and good tenants, but they don't stick in your mind as much).

[moojar]

Yeah, "pipe" and "dream" seem to fit unfortunately.

We're not in central Melborne now, Toto! In your shoes I'd be concerned about the owner of the land having a fierce desire to end the 30 year lease early, or simply a government official having a bad day.

Not sure if it applies, but my (Thai) wife and I considered similar, as an income stream in retirement. There was a bit of a boom in an area and rents were high. But more accommodation than was needed was soon built, and rents went back down to "bugger all". We decided it was a bad idea to add more to the mix. (Have you ever noticed in Thailand you may see several similar businesses nearby to each other? It's because one business was successful, and along came the copycats.)

[Konini]

Thank you all for the responses - my husband immediately said it would be a bad idea and it turns out that he was right. I had been thinking of somewhere close to a big police station or immigration office and only renting to junior officers, who would almost have an obligation to pay on time and be well behaved, particularly if a more senior officer could be contracted to collect the rents, but he said the less we have to do with the authorities the better, although I like to think that there are more good people than bad here (or anywhere else). I know we hear lots of terrible stories, I'm sure that there are hundreds of thousands of expats living very nice happy lives here with no problems - but as Black Cab said, they aren't the ones that stick in your mind.

So, just something for ourselves. Again, not wanting to get into a debate about what will happen in 30 years when we have to walk away from whatever we've renovated or built, and as we never want to be worth more dead than alive the lease would have to be somehow structured, perhaps by use of a trust fund or equivalent owning the lease (I don't know the laws on trust funds here, but I'm sure they exist) so that should we die before the 30 years were up the land owners would have to deal with our estate to honour the 30 year term, although they could offer to buy it out rather than having it sublet. All details, we wouldn't do anything without very solid legal advise from a reputable company not Somchai the solicitor down the road. Also, no more money than we could afford to walk away from, our Superannuation fund can take a hit of $30k without it leaving us on bread and water.

If we are able to find the perfect piece of land, with or without a basic house on it, I am assuming that there would be no problem with me doing work to my own property. Of course, I'm not a machine and I can't do heavy stuff, so I'd have to bring people in to do some work, but apart from that, on a retirement visa, doing a bit of DIY on my own property wouldn't be an issue would it? And bringing someone in, say getting a quote from Bob the Builder to put a new roof on, that would be acceptable within immigration rules wouldn't it? I wouldn't be 'project managing' as it is thought of back home, I'd be doing most things myself and getting in people to do what I am not capable of doing myself.

Thanks again, very informative and helpful replies - I was kind of dreading a tsunami of misogynist condescending posts and you have very pleasantly surprised me.

[moojar]

^

My brother in law is a policeman and his wife a senior public servant, and they think it's a huge joke every time I tell me wife I cannot help out / do chores etc. as I don't have a work permit. Well, they thought it was funny the first five or six times they heard it.

I don't know for certain so don't take my word for it, but I believe technically you are not allowed to do anything, even DIY. But common sense does exist, even in Thailand! So unless you upset someone (the landowner who'd like to terminate the lease say?), you'd have no problems. We are preparing a plot of land for our retirement, and I work side by side with my BIL the police sergeant all the time.

[Don Mega]

Send a PM to simon43

Long term lease and building on the land is the sorta thing he is into.

[Konini]

Send a PM to simon43

Long term lease and building on the land is the sorta thing he is into.

Great suggestion, thank you. I noticed a few of his older posts here late last night and had forgotten about it.

If DIY is out, I take it there'd be nothing wrong with me hiring day labourers? Legally, of course. I know that the Burmese day labourers up here in Chiang Mai have some very skilled people amongst their ranks, but not sure if hiring them would be legal and it would have to be a Thai, which for me would be last resort. It would just be like taking someone on for the day to help you cut the big trees down from your garden or something wouldn't it?

I really like the idea of shipping container conversions - to any doubters, please google what lovely living spaces can be made out of them - and the first job would be to place the containers and secure them so I'd be totally out of sight - my husband goes along with most of my crazy idea's (mainly because they almost always work out), but he'd draw the line at me doing any roofing, which would be the only work the public would be able to see. I don't want to be rural, and would hope to get a block of land that I could put a 20 or better still 40 foot container straight across the street boundary, fronted by a nicely done bamboo fence or sandstone fake entry wall ensuring total privacy.

Thanks again

EDIT: Here's a link to some of those conversions

[blackcab]

You seem very keen to get into building renovations. I understand you want something to do, however mamy people in Thailand (including Thai people) find this a very frustrating experience. There are numerous threads on this forum about building horror stories, some of which I have experienced myself.

On the other hand people like simon43 seem to enjoy it.

Some members have built their own houses, but almost all of these members have Thai wives who own the land and who often supervised the build.

If you are looking for a comfortable retirement, just rent somewhere nice on a yearly basis. You can move easily, so if someone opens up a factory or a migrant worker camp next door you can easily move (there are no zoning laws here and scenarios like that do happen).

There are also no trust funds as that concept does not exist in Thai law (section 1686 of the Civil and Commercial Code).

[mike324]

low cost thai renters are some of the most problematic tenants 5000 baht and lower, unless you are renting to students which would be a bit better. Suggest you change your investing plan. Unless you don't mind having police coming to apartments, hearing arguements, having drunks around, and constant fixing stuff on almost weekly basis. Again depends how many room you plan on having - problems I listed are normaly for apartment units 40 rooms and up. If 10-20 rooms it won't be hard to manage, especially if its very basic no AC rooms.

Here is a link for container residence close to Bangkok area, looks like container residience will cost more than simple brick and concrete structures.

https://www.facebook.com/theboxresidence/

[Don Mega]

Here is a link for container residence close to Bangkok area, looks like container residience will cost more than simple brick and concrete structures.

https://www.facebook.com/theboxresidence/

The price with shipping containers is your at 4,000 m2 before you do anything with it.

How much per m2 is a bricks and mortar thai style build ?

[ozyjon]

Don't listen to these inexperienced people

i'm like you, buy them old, fix them up, rent

them, i'm very rich now, so start building.

[ozyjon]

I don't see a problem with the work permit. The problem would arise with having Thai tenants living right on your doorstep.

Listen to me when I say this. I work for a company that owns lots and lots and lots of cheap rooms that are 99% occupied by Thai people. In the last 12 months we have had the police raid our buildings for drugs (they found them). We have had a group of guys turn up with guns intending to shoot one of our tenants (they didn't find him). We have had anti social behaviour like you wouldn't believe (food and rubbish thrown off balconies; loud music; one couple having sex with their door wide open). We have had one guy drink toilet cleaner then drive his car through a neighbours fence. Non payment. Runners. One woman jamming God knows what down a drain until we were at a loss about how to unblock it. Last night one guy got so drunk he didn't know which room he lived in (lots of choice) so he banged on all the doors. One single female living alone got scared and climbed over her 3rd floor balcony to escape and fell off. I don't know how but she's mostly ok and didn't die.

Trust me when I say this: You do not want tenants living in cheap accommodation on the same land as you. Believe me, it would be the worst mistake you made for quite a while.

(I will add that we have many very decent and good tenants, but they don't stick in your mind as much).

For heavens sake, do you have to be so frank and honest, couldn't you add some sugar and

flowery language, you balloon popper you.

Ps, i know the apartments you are referring to,, they exist in every city in the world.

[Pawy]

Hey Hi... I can't help noticing your post.. Pawy is my name.. I am a Singaporean and my wife is Thai.. both of us are in our Mid50s, no children. Recently my wife have brought a piece of land... about 1 and 1/2 hours drive away from the busy city of Bangkok.. We intend to turn this piece of land into an Agrotourism Farm which also offer Vacation Farm Stay. I am familiarise in the transformation of land into Agrotourism Farm and running it but lack the knowledge on the building constructing sector for the Farm Stay.. We did thought of using Containers, so coming across your posting about container homes sure do attract me. I don't mind working with someone like you (that is if you are interested). I can be reached via this email... [email protected]... for further discussion.

[TJR4ASR]

I would be interested in your contact for shipping continent's. Want for our land.

[Konini]

Hey Hi... I can't help noticing your post.. Pawy is my name.. I am a Singaporean and my wife is Thai.. both of us are in our Mid50s, no children. Recently my wife have brought a piece of land... about 1 and 1/2 hours drive away from the busy city of Bangkok.. We intend to turn this piece of land into an Agrotourism Farm which also offer Vacation Farm Stay. I am familiarise in the transformation of land into Agrotourism Farm and running it but lack the knowledge on the building constructing sector for the Farm Stay.. We did thought of using Containers, so coming across your posting about container homes sure do attract me. I don't mind working with someone like you (that is if you are interested). I can be reached via this email... [email protected]... for further discussion.

I really like your plans for agrotourism, this should be very popular with backpackers and flashpackers so I would suggest going for a low to mid range fit out so your nightly rates would be in the low to mid price range.

I think the investment thing for us is a definite non-starter, it was just an idea to offset the monthly lease payments for the land. We're not really looking for investments in Thailand, as I said it was just an idea to have half a dozen or so small units to offset the land lease costs. We are not rich but have sufficient income to live comfortably for the next 30 years or so - we currently live in a (ridiculously large but very, very nice) condo in Chiang Mai paying 31,000/month rent. Buying 2 or 3 containers and converting them to a nice living space would be a good project for me, I'm a very keen and willing DIYer, can do wonders with a router and some fancy bits for it, and the majority of the cost would be the finishing, most of which I could do myself. The whole project would pay for itself in around 3 years based on paying 8,000 - 10,000 baht per month in lease costs. After that, we would be ahead more than 20,000 baht/month better off based on where we currently live.

Not looking for a job, but there are numerous video's on YouTube showing people's progress from preparing the foundations to cutting the windows and doors (this changes the structural integrity of the containers so extra strengthening has to be done) to covering up the outside so it doesn't look like a container to the interior fit out. Many of these video's are extremely boring as they go into very intimate detail about what they are doing, but it's good because you see the mistakes they make (so you don't make the same ones), and there are plenty mistakes you can make, so watching as many as you can bear to will be very good before you start.

Good luck with it, I would be very pleased to see how you progress - please send me private messages as you start building and converting, and we might even come and stay for a couple of nights when you're all finished.

[Konini]

I would be interested in your contact for shipping continent's. Want for our land.

Unfortunately I don't have a contact here in Thailand, the people I know who have converted them are back home. If you do a search on the DIY forum for shipping container, you will find several posts on the subject. From the top of my head I can't remember the prices of the different sizes.

[fosseway]

Police as tenants living in shipping containers, and collecting the rent, you with no work permits, are you serious, or is this a wind up. One thing I can tell you for sure, the Thai 30 year lease "Dies" with you, that is to say it is not transferable.

[Konini]

The price with shipping containers is your at 4,000 m2 before you do anything with it.

How much per m2 is a bricks and mortar thai style build ?

I honestly don't think I could go with Thai style build, they just don't seem competent enough for me. A couple of years ago 40 foot containers were about 80,000 delivered and placed, you could have a big living space if you placed 2 of them in an L shape with a nice garden setting/pergola covered outdoor living area and outdoor bathrooms in the space in between the L - and maybe a 20 foot container man cave at the back of the block to make it perfect and keep he who would like to be obeyed from being under my feet all day long.

The containers won't have any problems with being absolutely square, some cheap ply-board or MDF on the walls, no finishing needed because I would wallpaper it - being sure to bring my paste from back home as the paste here (or at least the paste they used in our condo) is dark brown, and left all over the place on lemon, cream and pinkish wallpapers in different rooms. It took me ages to get around all of them, all it needed was a very wet cloth and not too vigorous but very patient rubbing to remove it. And it was just left there, on what is a very nice and very expensive condo.

After a couple of years of placement, some readjustment might have to be made as they settle into the ground, solved with a big jack to lift a corner and simply blocks of wood to level it out again.

It just seems much easier than having to micromanage Thai builders doing things the way they want not the way I want.

[fosseway]

The price with shipping containers is your at 4,000 m2 before you do anything with it.

How much per m2 is a bricks and mortar thai style build ?

I honestly don't think I could go with Thai style build, they just don't seem competent enough for me. A couple of years ago 40 foot containers were about 80,000 delivered and placed, you could have a big living space if you placed 2 of them in an L shape with a nice garden setting/pergola covered outdoor living area and outdoor bathrooms in the space in between the L - and maybe a 20 foot container man cave at the back of the block to make it perfect and keep he who would like to be obeyed from being under my feet all day long.

The containers won't have any problems with being absolutely square, some cheap ply-board or MDF on the walls, no finishing needed because I would wallpaper it - being sure to bring my paste from back home as the paste here (or at least the paste they used in our condo) is dark brown, and left all over the place on lemon, cream and pinkish wallpapers in different rooms. It took me ages to get around all of them, all it needed was a very wet cloth and not too vigorous but very patient rubbing to remove it. And it was just left there, on what is a very nice and very expensive condo.

After a couple of years of placement, some readjustment might have to be made as they settle into the ground, solved with a big jack to lift a corner and simply blocks of wood to level it out again.

It just seems much easier than having to micromanage Thai builders doing things the way they want not the way I want.

The MDF, plus the wallpaper would really keep the metal box very cool. Plus the low build cost, by just placing it on the soil with no foundations.

I am sure the tenants will be queuing to be vetted by the police rent collectors.

[RedQualia]

Re: 30 year leases and renting homes -- I do it. It works. But my approach is quite different from OP's. New houses only, all equipped as required to make them attractive to foreigners. Three bedrooms, two baths, western kitchen, air conditioners in most but not all rooms, about 100-120 sq meters, fully furnished, all clean and well maintained (decorate and rent houses to the wives... If someone's wife falls in love with it, hubby's got no choice in the matter). Depending on what you might build, you could expect to rent such for anywhere from maybe 13,000 - 20,000 Baht per month. More for great big fancy houses, of course, but I prefer to keep it simple and affordable. Rents in that range will generally appeal mostly to foreigners, though some upscale Thai people might be interested in renting such as well. My houses have been in service for approximately ten years now, with my wife taking care of most of the business aspects of things. I have recovered the cost of building the houses, plus a good bit more, and still have them to sell should I choose to do so (no reason to sell at all, but then, do you want to buy?). Never a mortgage on a house here... I don't want to owe money in one country when most of my income comes from another country. Fluctuations in exchange rates could be really great! Or cause for concern... Or downright terrifying...

Good luck!

[torpedo1970]

you are not allowed to do anything, even DIY. But common sense does exist, even in Thailand! So unless you upset someone (the landowner who'd like to terminate the lease say?),

This is very true, and there is "snitchers" everywhere.

A friend of a friend was taken down to the immigration police and shaken down for 50K because he was working..... Cutting the grass on his own property. (or technically his Thai wife's property)

We never got the full story of how it happened, but it sounded like he had upset one of the people close by. interfered their nap in the hammock by noisy grass cutter. the worst thing is that the rumor says it was another farrang that did the reporting..

so the common sense is always relative, after all this is Thailand

Good luck

[CousinEddie]

^

My brother in law is a policeman and his wife a senior public servant, and they think it's a huge joke every time I tell me wife I cannot help out / do chores etc. as I don't have a work permit. Well, they thought it was funny the first five or six times they heard it.

I don't know for certain so don't take my word for it, but I believe technically you are not allowed to do anything, even DIY. But common sense does exist, even in Thailand! So unless you upset someone (the landowner who'd like to terminate the lease say?), you'd have no problems. We are preparing a plot of land for our retirement, and I work side by side with my BIL the police sergeant all the time.

Your policeman, brother in law thinks it's a joke...until he decides to hate you....and he will.

Edited April 22, 2016 by CousinEddie

[CousinEddie]

I don't see a problem with the work permit. The problem would arise with having Thai tenants living right on your doorstep.

Listen to me when I say this. I work for a company that owns lots and lots and lots of cheap rooms that are 99% occupied by Thai people. In the last 12 months we have had the police raid our buildings for drugs (they found them). We have had a group of guys turn up with guns intending to shoot one of our tenants (they didn't find him). We have had anti social behaviour like you wouldn't believe (food and rubbish thrown off balconies; loud music; one couple having sex with their door wide open). We have had one guy drink toilet cleaner then drive his car through a neighbours fence. Non payment. Runners. One woman jamming God knows what down a drain until we were at a loss about how to unblock it. Last night one guy got so drunk he didn't know which room he lived in (lots of choice) so he banged on all the doors. One single female living alone got scared and climbed over her 3rd floor balcony to escape and fell off. I don't know how but she's mostly ok and didn't die.

Trust me when I say this: You do not want tenants living in cheap accommodation on the same land as you. Believe me, it would be the worst mistake you made for quite a while.

(I will add that we have many very decent and good tenants, but they don't stick in your mind as much).

For heavens sake, do you have to be so frank and honest, couldn't you add some sugar and

flowery language, you balloon popper you.

Ps, i know the apartments you are referring to,, they exist in every city in the world.

He did sugar coat it.

Edited April 22, 2016 by CousinEddie

[CousinEddie]

Thank you all for the responses - my husband immediately said it would be a bad idea and it turns out that he was right. I had been thinking of somewhere close to a big police station or immigration office and only renting to junior officers, who would almost have an obligation to pay on time and be well behaved, particularly if a more senior officer could be contracted to collect the rents, but he said the less we have to do with the authorities the better, although I like to think that there are more good people than bad here (or anywhere else). I know we hear lots of terrible stories, I'm sure that there are hundreds of thousands of expats living very nice happy lives here with no problems - but as Black Cab said, they aren't the ones that stick in your mind.

So, just something for ourselves. Again, not wanting to get into a debate about what will happen in 30 years when we have to walk away from whatever we've renovated or built, and as we never want to be worth more dead than alive the lease would have to be somehow structured, perhaps by use of a trust fund or equivalent owning the lease (I don't know the laws on trust funds here, but I'm sure they exist) so that should we die before the 30 years were up the land owners would have to deal with our estate to honour the 30 year term, although they could offer to buy it out rather than having it sublet. All details, we wouldn't do anything without very solid legal advise from a reputable company not Somchai the solicitor down the road. Also, no more money than we could afford to walk away from, our Superannuation fund can take a hit of $30k without it leaving us on bread and water.

If we are able to find the perfect piece of land, with or without a basic house on it, I am assuming that there would be no problem with me doing work to my own property. Of course, I'm not a machine and I can't do heavy stuff, so I'd have to bring people in to do some work, but apart from that, on a retirement visa, doing a bit of DIY on my own property wouldn't be an issue would it? And bringing someone in, say getting a quote from Bob the Builder to put a new roof on, that would be acceptable within immigration rules wouldn't it? I wouldn't be 'project managing' as it is thought of back home, I'd be doing most things myself and getting in people to do what I am not capable of doing myself.

Thanks again, very informative and helpful replies - I was kind of dreading a tsunami of misogynist condescending posts and you have very pleasantly surprised me.

"I'm sure that there are hundreds of thousands of expats living very nice happy lives here with no problems"

Yes, there are and they don't have a business plan to 'work' with illiterate day laborers and do business with Thai police.

You want to enjoy retirement, be a tourist & mind your own business..... otherwise, you are gonna see a side of Thailand that you wish you hadn't.

[BritManToo]

I know two people that have done this.

One has a small resort in Mae Rim, the other in Doi Saket.

Occupancy is generally ZERO.

Too far out of town to attract any customers. I understand they are both for sale.

Essentially the problem was, for them to afford the land to do this, they had to go too far out of town to attract customers.

Now if you are thinking of renting to Thais, you do know the room rates are around 1,500-2,000bht/month

Please don't throw away your money.

Edited April 22, 2016 by BritManToo

[CousinEddie]

My brother in law built a nice resort. Very popular... until... some politician built a competing resort across the road...then had the road department put barriers on the highway that blocked the turn into my families business.

This Is Thailand.

[Konini]

The MDF, plus the wallpaper would really keep the metal box very cool. Plus the low build cost, by just placing it on the soil with no foundations.

I am sure the tenants will be queuing to be vetted by the police rent collectors.

Some people have placed them directly on soil, but I would want at least railway sleepers, raise it a little to alleviate flooding concerns. I saw something that most likely isn't available here, but it is a spray, just like a paint, which insulates from extreme heat and cold. Looked amazing, although other kinds of insulation can be used and since living in Melbourne where the roofspace would sometimes get up to 70 degrees Celsius, i am a great fan of whirly birds in the roof and discreet extractor fans in the ceilings in as many rooms as you can get them. You wouldn't believe how much difference the extractor fans make, they take the hot air straight to the roofspace.

[rhodie]

You may want to contact BM Simon43. I am sure he will be able to help with 30 year leases as he has built a hotel on land that he can't own. Good Luck!