Condo in Bangkok - To buy or not to buy?

[trogers]

9 minutes ago, Peterw42 said:

 

There is always the option to get on the condo commitee and raise hell, find other owners and make things happen. I have seen a block in pattaya were a couple of westeners are on the commitee and have turned the block around. Things are getting repaired, utilities cut off for non payment of fees etc. 

 

It's a big gamble, which one of limited funds cannot afford to take.

 

I bought into a 30+ year old building in 2007 and got into the committee for the third term now. But it's pool was functioning and clean...and all owners are paying though some may be a few months late.

Edited September 27, 2016 by trogers

[newnative]

If you read some of the posts on threads dealing with condos you might be left with the impression that as condos age in Thailand they lose their value at a steady rate with each passing year until you are finally left with something worthless.  I don't think that's the case--especially if you make a wise purchase.  Here's one example: View Talay 2 in Pattaya, which I don't own or live at.  On first glance, it doesn't appear to have much going for it.  Plain architecture (and that's being kind). Somewhat inadequate number of elevators.  No garage parking. I don't think it has a sky lounge or on-site gym.  Not much of a lobby to speak of.  Views that aren't truly great even from the higher floors.  More parking lot than green spaces.  Dated, long narrow box,  room design.  (I know there are larger units, I am writing about the studios.)  Swimming pool its main amenity.  Getting a little bit up there in years and you would think the condo values would be dropping like a stone.  Well, surprise, the prices seem to be holding nicely.  A quick look at a couple of websites found studios ranging in price from around 1.5MB to around 2MB, give or take.  For a condo built in 2002, that's pretty good in my book.  Why is it holding it's value?  Location. Location. Location.  Easy walk to the bus station, the beach, Jomtien Complex, grocery store, Immigration, lots of bars and restaurants, banks, etc., and it's on the baht bus line.  The other plus, it seems like it is being maintained fairly well.  For lots of people, VT2 fits their needs and it remains a desirable, popular condo.  Now, it might be that these condos have reached their maximum value and may not increase much, at least short-term; they are, after all, studios.  But, they are an example of condos that can hold their value and probably will continue to.

[trogers]

1 hour ago, newnative said:

If you read some of the posts on threads dealing with condos you might be left with the impression that as condos age in Thailand they lose their value at a steady rate with each passing year until you are finally left with something worthless.  I don't think that's the case--especially if you make a wise purchase.  Here's one example: View Talay 2 in Pattaya, which I don't own or live at.  On first glance, it doesn't appear to have much going for it.  Plain architecture (and that's being kind). Somewhat inadequate number of elevators.  No garage parking. I don't think it has a sky lounge or on-site gym.  Not much of a lobby to speak of.  Views that aren't truly great even from the higher floors.  More parking lot than green spaces.  Dated, long narrow box,  room design.  (I know there are larger units, I am writing about the studios.)  Swimming pool its main amenity.  Getting a little bit up there in years and you would think the condo values would be dropping like a stone.  Well, surprise, the prices seem to be holding nicely.  A quick look at a couple of websites found studios ranging in price from around 1.5MB to around 2MB, give or take.  For a condo built in 2002, that's pretty good in my book.  Why is it holding it's value?  Location. Location. Location.  Easy walk to the bus station, the beach, Jomtien Complex, grocery store, Immigration, lots of bars and restaurants, banks, etc., and it's on the baht bus line.  The other plus, it seems like it is being maintained fairly well.  For lots of people, VT2 fits their needs and it remains a desirable, popular condo.  Now, it might be that these condos have reached their maximum value and may not increase much, at least short-term; they are, after all, studios.  But, they are an example of condos that can hold their value and probably will continue to.

 

My experience is an old condo building can be revitalized, but the majority of the owners must be convinced.

 

When I first bought my first 2-bedroom unit, the neighbouring 2-bedroom was renting out for only Bt25,000.

 

I refurbished my unit and rented it out for Bt45,000. My example spurred their other owners to upgrade.

 

In the past 5 years, we had replaced the elevators, repainted the building, change windows and lights of the main stairway. And this year, we have got approval from the AGM to change the false ceiling and lights at corridors and lift lobbies.

 

An old condo building seated on a great location has potential for gains in value and rental income. The only obstacle is the type and thinking of majority of the owners.

[blackcab]

2 hours ago, Familyonthemove said:

Can a 'failing' condo building ever recover?

 

It's in Soi Ruamrudee - so very central and traditionally a high cost buying and rental area.  The condo interior needs work - new kitchen, bathroom and ceiling, (and I guess about 500k THB for this), but it's a very low price for the area.  But the rest of the building has issues.

 

Structure looks sound (as far as I can tell) but roof has leaked, exterior needs painting and the pool is knackered (see photo).  Maintenance is low at 40 THB per sq. m and half the owners do not pay.  They claim the Society is in credit and there's a plan to increase maintenance to 50 THB and force owners to pay.  There's also a plan to fix the roof and paint the exterior, but not to fix the pool.

 

I'm guessing the plans by the Juristic Person are ambitious and the building will slowly fall apart - so even if I fix up the condo, the value will continue to fall because of the state of the building?

 

But the price and location is right.  Could it be an option? What's the thoughts of the panel?

 

 

That looks like something out of Aleppo.

[wpcoe]

If you can find a building where you can involve and motivate the co-owners to maintain, and even update, the building you've got a winner.  And, IMHO, you've found a very RARE gem.

 

From my experience with several condos (both in Thailand and the USA), and from reading online, most condo owners like to be "hands off" and let the "experts" (which they consider their building's owner's association/committee to be) handle everything.  All too often, that power concentrated into the few hands of the committee/association is too tempting for some power hungry and/or corrupt folks to take over.

 

For those cynical reasons, I would only consider buying into an older building that appears to be well-maintained:  exterior clean and painted, lobby and hallways clean and well maintained, modern elevators in smooth working order, well landscaped and trimmed grounds, etc.  That seems to indicated things are running well with the building management.

 

For kicks, the next time you are out looking at potential condo buildings in which to buy, ask at the front desk if you can see a copy of the committee and/or AGM meeting minutes.  Enjoy the looks on the faces of the office staff.  

 

I've been on a condo owners association (in the USA) and was stunned at the lack of feedback from other owners.  If it weren't for proxy forms returned to the management company, there would never have been a quorum for a meeting of any type.

[newnative]

I like to swim so that bargain condo wouldn't appeal to me.  I'd be looking for a good buy in a newer building in an appealing area.  Something like Supalai Premier at Asoke.

[mike324]

14 hours ago, trogers said:

 

"...and half the owners do not pay..."

 

Don't touch it. Tenants would prefer a better building even if the location is less central.

 

Would you rent it as a tenant?

 

I agree, if half don't even pay. Better to move on, the ship is already sunk on that one.

[Familyonthemove]

5 hours ago, wpcoe said:

If you can find a building where you can involve and motivate the co-owners to maintain, and even update, the building you've got a winner.  And, IMHO, you've found a very RARE gem.

 

From my experience with several condos (both in Thailand and the USA), and from reading online, most condo owners like to be "hands off" and let the "experts" (which they consider their building's owner's association/committee to be) handle everything.  All too often, that power concentrated into the few hands of the committee/association is too tempting for some power hungry and/or corrupt folks to take over.

 

For those cynical reasons, I would only consider buying into an older building that appears to be well-maintained:  exterior clean and painted, lobby and hallways clean and well maintained, modern elevators in smooth working order, well landscaped and trimmed grounds, etc.  That seems to indicated things are running well with the building management.

 

For kicks, the next time you are out looking at potential condo buildings in which to buy, ask at the front desk if you can see a copy of the committee and/or AGM meeting minutes.  Enjoy the looks on the faces of the office staff.  

 

I've been on a condo owners association (in the USA) and was stunned at the lack of feedback from other owners.  If it weren't for proxy forms returned to the management company, there would never have been a quorum for a meeting of any type.

 

Yes - I think this could be a potential opportunity - but it's a long shot.  The building would fail all of the tests you mention - exterior needs painting, common parts looking rough and there's no sign that the committee has met recently.  But I think the location and the price makes it worth looking into further to see if there's a real plan to improve the building.

 

I noticed there were some nice cars in the car park - (Porsche etc) and asked if they were owners.  The agent said they were owners staying in the building - so I thought there may be some potential ....... but after thinking about it further I suspect the posh cars were owned by visitors who've put up their 'Gigs' in a cheap condo.

 

Also - I don't enough about what happens to a failing condo - but could some of the owners have an interest in it failing so they can knock it down and build a high rise? If I'm the only farang owner on the committee, I may be the last to know what's really going on.

 

[KittenKong]

42 minutes ago, mike324 said:

I agree, if half don't even pay. Better to move on, the ship is already sunk on that one.

 

Actually non-payment of common fees is about the only thing that the condo act gives the JPM some teeth to bite with. If co-owners dont pay then a fairly high official interest rate is charged every month and this legally increases after a while. Also co-owners who dont pay can be denied access to common areas and common services. Also any co-owner in arrears will not get his debt-free letter if he wants to sell.

 

The main problem with unpaid common fees is not the lack of penalties and legal recourse, it's the lack of effort/desire on the part of JPMs/management companies and committees. They just need to pull their fingers out.

[mike324]

6 minutes ago, KittenKong said:

 

Actually non-payment of common fees is about the only thing that the condo act gives the JPM some teeth to bite with. If co-owners dont pay then a fairly high official interest rate is charged every month and this legally increases after a while. Also co-owners who dont pay can be denied access to common areas and common services. Also any co-owner in arrears will not get his debt-free letter if he wants to sell.

 

The main problem with unpaid common fees is not the lack of penalties and legal recourse, it's the lack of effort/desire on the part of JPMs/management companies and committees. They just need to pull their fingers out.

 

I agree what you said is standard procedure nowadays. If half don't pay at the condo OP is looking at, I bet those sitting on the JPM are probably the ones not paying as well. It would be hard to kick them off the board to implement changes. This is especially true for old condos. I have yet to hear about half not paying their common fees, that is bad very bad.

 

 

[blackcab]

11 hours ago, Familyonthemove said:

 

Yes - I think this could be a potential opportunity - but it's a long shot.  The building would fail all of the tests you mention - exterior needs painting, common parts looking rough and there's no sign that the committee has met recently.  But I think the location and the price makes it worth looking into further to see if there's a real plan to improve the building.

 

I noticed there were some nice cars in the car park - (Porsche etc) and asked if they were owners.  The agent said they were owners staying in the building - so I thought there may be some potential ....... but after thinking about it further I suspect the posh cars were owned by visitors who've put up their 'Gigs' in a cheap condo.

 

Also - I don't enough about what happens to a failing condo - but could some of the owners have an interest in it failing so they can knock it down and build a high rise? If I'm the only farang owner on the committee, I may be the last to know what's really going on.

 

 

If you like that sort of potential opportunity then let me know because I can find as many manky old units for you to buy as you want. Believe me, you will run out of cash before I run out of opportunities to earn commission.

 

Don't buy this one, seriously. Just for fun, go back in a year or two and have a look what it is like. The same old garbage will be recycled for you... imminent improvements, etc etc.

 

It takes 100% of owners to agree to deregister a Condominium at the land office. It's almost unheard of, especially with larger condos.

[mike324]

23 hours ago, Familyonthemove said:

 

Yes - I think this could be a potential opportunity - but it's a long shot.  The building would fail all of the tests you mention - exterior needs painting, common parts looking rough and there's no sign that the committee has met recently.  But I think the location and the price makes it worth looking into further to see if there's a real plan to improve the building.

 

I noticed there were some nice cars in the car park - (Porsche etc) and asked if they were owners.  The agent said they were owners staying in the building - so I thought there may be some potential ....... but after thinking about it further I suspect the posh cars were owned by visitors who've put up their 'Gigs' in a cheap condo.

 

Also - I don't enough about what happens to a failing condo - but could some of the owners have an interest in it failing so they can knock it down and build a high rise? If I'm the only farang owner on the committee, I may be the last to know what's really going on.

 

 

nice cars are sometimes indication of some hiso attitude that they are above all, and nobody can force them to pay the common fee. Don't read it as a positive thing. I've been here for close to 30 years, have a handful of condos, as well as run my own 70+ room apartment, I have my fair share of experience. Avoid at all cost buddy!

 

Several years ago there was a handful of non paying houses, until a well known businessmen was elected on the board - the mooban started suing everyone that did not pay / that businessmen also went to talk to them personally. That businessmen was real nice though, he fixed up a lot of the stuff in the mooban at his own cost. Our mooban even have its own Line group telling dog walkers to clean up their own sh!t. At the moment, there is only 1 non paying house out of 200+ houses, pretty good record I would say.

[Familyonthemove]

Good, solid advice - thanks Blackcab and Mike.  But you know that urge you get when you stumble on a dusty, knackered classic car under a tattered tarpaulin in some old guys barn .......

Edited September 29, 2016 by Familyonthemove

[blackcab]

44 minutes ago, Familyonthemove said:

Good, solid advice - thanks Blackcab and Mike.  But you know that urge you get when you stumble on a dusty, knackered classic car under a tattered tarpaulin in some old guys barn .......

 

OK. Go for it. Start a new thread with your experiences.  Add pictures. It will be an extremely good read.

[bamukloy]

The whole issue reads like a train wreck.

why would anyone buy?

 

You can rent further out the BTS line for 10k a month. Against 4mill, thats over 30 years rent! An extra 15 mins on the BTS wont kill you.

 

also note: you buy at 4 mill but eventually sell at 3....that 1 million loss would have given you 8 years rent

 

[blackcab]

1 minute ago, bamukloy said:

The whole issue reads like a train wreck.

why would anyone buy?

 

You can rent further out the BTS line for 10k a month. Against 4mill, thats over 30 years rent! An extra 15 mins on the BTS wont kill you.

 

also note: you buy at 4 mill but eventually sell at 3....that 1 million loss would have given you 8 years rent

 

 

Assuming rental prices stay the same for 30 years.

[newnative]

If you buy wisely at 4MB you won't be selling down the road for 3MB. 

[Familyonthemove]

22 minutes ago, bamukloy said:

The whole issue reads like a train wreck.

why would anyone buy?

 

You can rent further out the BTS line for 10k a month. Against 4mill, thats over 30 years rent! An extra 15 mins on the BTS wont kill you.

 

also note: you buy at 4 mill but eventually sell at 3....that 1 million loss would have given you 8 years rent

 

 

All very true - but there's also the 'difficult to price' issue of quality of life.  If we only ever look at cost - then nobody would ever buy anything but the lowest spec, manual gearbox Nissan Almera.

 

I work long hours and there's a value from being able to walk back to my current apartment in just 15 minutes.  I also like to run and cycle (outdoors) - and so being close to a Park adds more value.  Yes I can get on the BTS every day to work and to go to the park - but there's a value to me in not having to do that.

 

But I've also been looking at Phra Khanong to On Nut too, and I'm trying to decide if the cost savings are worth the extra travel - and in the places with the 10k per month rent there's also good condos to buy at around 2.5 million THB - so there's still an option to buy rather then rent.  But focusing on condos closer to the office/parks - in these area the rent/buy equation gives a buying budget of 4-5 million.  I've seen 4 decent places in this range - one new, two older and one leasehold.  All have some issues (hence the price).  The new one is small, the older ones need work and the leasehold one has limited years left.

 

What attracted me to the (possibly failing) condo is that I could live in it for 5-6 years and the cash saved in not paying rent would largely off-set the buying cost.  Then if (a big if, I know) the exterior improvements actually happen, then the value may rise, and I could get my money back when selling.  But if it falls apart in 6 years, then nothing lost compared to renting.

 

There's also the point mentioned earlier in this thread - in rented property you have to get permission to hang a picture, but in my own condo I could fit it out the way I want.  I'm getting tired of other people's furniture and other people's idea of style. 

 

[Cinderella Man]

But you are comparing apples to oranges

 

Buying 4 million condo doesn't equal the same quality of life like renting 8 million condo...

Edited September 29, 2016 by Cinderella Man

[blackcab]

1 hour ago, Familyonthemove said:

...when selling.

 

Those are the key words right there. Understand that it might be incredibly difficult to sell unless you discount it.

 

If you don't need to sell it and can rent it out, then that's a very different story.

 

Send a Thai person back and ask how long the property has been for sale.

[Familyonthemove]

7 minutes ago, blackcab said:

 

Those are the key words right there. Understand that it might be incredibly difficult to sell unless you discount it.

 

If you don't need to sell it and can rent it out, then that's a very different story.

 

Send a Thai person back and ask how long the property has been for sale.

 

Yes - our Thai office manager is going there to chat to the Juristic Person and the Security Guard to see what she can find out. 

 

I could just rent it out when I no longer need it for work - but with so much rental property on the market - it really needs to look less like Aleppo to be able to rent it out.  So I'm after some reassurance that improvement works are going to happen

[Familyonthemove]

56 minutes ago, Cinderella Man said:

But you are comparing apples to oranges

 

Buying 4 million condo doesn't equal the same quality of life like renting 8 million condo...

 

Yes - I keep coming back to this whenever I get the calculator out.  I currently rent an apartment near Chidlom - and if it was possible to buy it, I guess it would be over 10 million THB.  But the Condo needing the work is in the same area - and that's part of the quality of life formula.

 

If the agent's info about the planned improvements checks out - I'm going to put a low offer on the 'fixer-upper' and see what the owner says.

[newnative]

I'd rather live in a 4MB condo that I own rather than rent an 8MB condo that I don't own.  I love knowing that the condo is mine and I can make whatever changes I want to it and have my own furniture, artwork and so on.  But, different strokes--I know some prefer renting and that's fine for them.

[blackcab]

46 minutes ago, Familyonthemove said:

 

Yes - I keep coming back to this whenever I get the calculator out.  I currently rent an apartment near Chidlom - and if it was possible to buy it, I guess it would be over 10 million THB.  But the Condo needing the work is in the same area - and that's part of the quality of life formula.

 

If the agent's info about the planned improvements checks out - I'm going to put a low offer on the 'fixer-upper' and see what the owner says.

 

Before you do that, make sure you have all your documents ready. You need the cash in hand, and you need a FET form (if you're not a Permanent Resident).

 

I would also suggest you get a copy of the unit's chanote and a print out from the land office to see if there are any encumbrances on the property before you make the offer.

 

I say this because from experience, if they accept your offer (or close to it) then they will want your cash fast.

 

If you are ready to deal immediately this can be a huge motivator for the seller. To do this however, you need to fully understand the seller's position. So do your homework first.

[Familyonthemove]

2 minutes ago, blackcab said:

 

Before you do that, make sure you have all your documents ready. You need the cash in hand, and you need a FET form (if you're not a Permanent Resident).

 

I would also suggest you get a copy of the unit's chanote and a print out from the land office to see if there are any encumbrances on the property before you make the offer.

 

I say this because from experience, if they accept your offer (or close to it) then they will want your cash fast.

 

If you are ready to deal immediately this can be a huge motivator for the seller. To do this however, you need to fully understand the seller's position. So do your homework first.

 

Thank you.  I have a Work permit but I'm not a PR. I was going to transfer funds from abroad rather than use local funds (as I think using local funds is challenging?) - so I think this is where the FET will come in?

[blackcab]

11 minutes ago, Familyonthemove said:

 

Thank you.  I have a Work permit but I'm not a PR. I was going to transfer funds from abroad rather than use local funds (as I think using local funds is challenging?) - so I think this is where the FET will come in?

 

Exactly. Once the funds arrive and have been exchanged, your bank will issue you the Foreign Exchange Transfer form. 

[newnative]

Make sure when you wire funds from abroad you put on the form "For condo purchase".  The bank will want to see this on the wire form and then they will issue a  Tor Tor 3 paper that you show at the Land Office.  The seller should show you a Debt Free Letter issued by the condominium that shows the condo is free of debt--the seller has paid all his condo maintenance fees, water bills, etc., and doesn't have any other outstanding debts with the condo.  This should be a current letter and it's valid for a week.

[wpcoe]

2 hours ago, newnative said:

Make sure when you wire funds from abroad you put on the form "For condo purchase".  The bank will want to see this on the wire form and then they will issue a  Tor Tor 3 paper that you show at the Land Office.  The seller should show you a Debt Free Letter issued by the condominium that shows the condo is free of debt--the seller has paid all his condo maintenance fees, water bills, etc., and doesn't have any other outstanding debts with the condo.  This should be a current letter and it's valid for a week.

 

I've often heard of the need to specify the reason for the inbound money transfer, but I've had one TT3 (many years ago) from SCB and two FETs (recently) from Bangkok Bank and none of the inbound transfers had a reason specified.  In fact, using the Bangkok Bank method to transfer funds from a US bank using the US interbank (ACH) transfer system there is no place to enter a reason.

[newnative]

I suppose there are always exceptions to the rule but my bank has always required the wire form to have the condo buy specification on it for the times I have bought condos--they are real sticklers for every i dotted and t crossed.   Probably the OP should check with his bank before the wire transfer to be on the safe side--nice if they are loosening up and dropping some silly things like this.

[blackcab]

There is no requirement from the Land Office to have the reason for transfer stated on the FET form.

 

If you specify General Funds or specify nothing at all they will accept the FET form.

 

All the Land Office care about is that there is a FET form in existence. 

 

That said, there is no harm at all in stating the reason as Condo Purchase.