Investment opportunity or not?

[seadigital]

Hello ThaiVisa,

 

I'm sitting on a sum of money in my savings account earning squat.  I'm in Chiang Mai and have seen where if I'd invested (during construction) in a condo called Unique it would have cost me 2 Mill, but now that it's built they're selling for 3.7 to 4 Mill?  Well, that sounds like a good deal to me!  However, I'd like the inside scoop which is why I'm asking some of you who've been down this path before.  You also know some of the problems I that I should be aware of. 

I've also noticed we can buy gold at spot price and resell without ever having to pay capital gains tax as no one is the wiser.

Are there any savy investors that can help me with the RE market and beyond? - I've posted under RE as this is my focus, but please don't feel your off topic if you have another nifty idea.

Thank's for your advise in advance.

[blackcab]

Buying off plan carried risks, and sometimes they are substantial risks. If you read through this forum you will see many examples of condo projects that were either not started or which have stalled. Understand that many people have received their units late, or not at all.

 

The second problem you have is that it is not easy to re-sell a condo in Thailand, even if it is brand new and unused. The reason is that many buyers need bank finance, and developers have deals with banks to specifically help people buy their condos. As a private seller you wouldn't have that relationship with a bank, and as such your buyer would need a much greater deposit to convince the bank to lend them the money to buy your unit.

 

So why would a buyer that needs finance (which is many people) choose your unit over an easy to access unit offered direct from the developer (who might throw in a new iPhone in to sweeten the deal)?

 

It is possible to make money, but don't be lured by the thought of doubling your investment for zero work. If it was that easy I would be a dollar multi millionaire from selling untold condos to an incredibly happy client base that would be repeatedly throwing sacks of cash at me 24 hours a day. Which is a nice thought, but unsurprisingly it's not the life I lead in reality.

[Peterw42]

There is a lot of smoke and mirrors with developers selling of the plan and after completion. I think you will find if the condos were 2m off the plan , they will be around that price now (resales etc). Who is asking 4m, the developer or some people trying for a stupid resale. 4m will be asking price not selling price. 

Developers sell a certain amount of condos off the plan, enough to cover construction costs etc, then hold a large inventory of unsold stock, then sell them slowly through agents, they create there own supply and demand.

 

[trogers]

What you are asking is, "Can I speculate and flip condo units?".

 

Read up on the behaviour of business cycles. It would get harder and harder to look for the greater fool when the cycle nears a peak.

 

But flipping is great after the trough of the cycle.

 

Where is the market now on that cycle?

[blackcab]

I should add that it is not unusual for the developer to have unsold units some years after completing the build.

 

This would of course affect your ability to resell. You could do it, but you are going to have to drop the price you accept. 

[seadigital]

13 minutes ago, trogers said:

What you are asking is, "Can I speculate and flip condo units?".

 

Read up on the behaviour of business cycles. It would get harder and harder to look for the greater fool when the cycle nears a peak.

But flipping is great after the trough of the cycle.

 

Where is the market now on that cycle?

These are all great replies. Thanks to all! 

Indeed; where are we in the trough of this cycle?  Anyone have any ideas?

Edited September 24, 2016 by seadigital

[Peterw42]

47 minutes ago, seadigital said:

These are all great replies. Thanks to all! 

Indeed; where are we in the trough of this cycle?  Anyone have any ideas?

 

If a sine wave represents 360 degrees, 90 degrees is the peak, 270 degrees is the trough. I would say around 240 degrees.

still going down, but hasn't reached the bottom yet. IMO

[RBOP]

Short term No. Long term Yes.  But remember, location location location.

[bark]

On 24/9/2559 at 4:14 PM, trogers said:

What you are asking is, "Can I speculate and flip condo units?".

 

Read up on the behaviour of business cycles. It would get harder and harder to look for the greater fool when the cycle nears a peak.

 

But flipping is great after the trough of the cycle.

 

Where is the market now on that cycle?

Agreed. Buy low and sell high, is tough to do.

I also found that Thai people do not like to buy second hand, resales. 

Afraid of ghost and bad luck.

 

[trogers]

6 minutes ago, bark said:

Agreed. Buy low and sell high, is tough to do.

I also found that Thai people do not like to buy second hand, resales. 

Afraid of ghost and bad luck.

 

 

There is a new generation of Thais that are looking to buy as an investment, and not as an abode. Investment means a great location at a reasonable price and giving a reasonable rental yield.

 

These investors would be buying with cash. Thus, location, location and location.

[williamgeorgeallen]

so i bought into a building project 5 years ago. bought a 1.1 million condo. they are almost completed but listed on the developers website for 1.7 million. in reality if you try to sell them you are lucky to get 800k. all b#llshit. i bought into the second stage. i am in a face book group of people who live in the first stage of the development, it is a disaster. place is palling apart already and they still do not have titles after waiting for more than 2 years. biggest mistake i have ever made in my life buying off plan.

[elgordo38]

29 minutes ago, RBOP said:

Short term No. Long term Yes.  But remember, location location location.

Location location location is important. Our older condo has units for sale you may have to put some money in but the location is the best in the city. We have a pool good staff on main floor restaurants stores and services. The elevator stops at every floor a lot of units don't. No short cuts were taken when building it today I question quality of new overpriced builds. You can judge for yourself in an older building still standing the quality. In a new build problems are down the road. When your buying there is a lot of built up hype when your selling ah well that is when the problem arises. 

[little mary sunshine]

Oh please, not this crap again!!  But 10 of them!!!

[mike324]

On 9/24/2016 at 3:58 PM, Peterw42 said:

There is a lot of smoke and mirrors with developers selling of the plan and after completion. I think you will find if the condos were 2m off the plan , they will be around that price now (resales etc). Who is asking 4m, the developer or some people trying for a stupid resale. 4m will be asking price not selling price. 

Developers sell a certain amount of condos off the plan, enough to cover construction costs etc, then hold a large inventory of unsold stock, then sell them slowly through agents, they create there own supply and demand.

 

 

spot on, if you really want that condo and be on the safe side, just get in touch with the authorize agent after completion and wait - they will call back with a the story of someone who change rooms or can't pay it off, etc. It may be slightly higher than 2 million, but definitely not double the price. If you want the lowest price, its always during presale - buying from large developers such as Land and House, Sansiri, SC Asset, LPN, etc are generally very safe to buy during presale.

 

I have yet to see condos double in price from presale - those are just dreamers and looking to hook a gullible buyer

[bark]

44 minutes ago, williamgeorgeallen said:

so i bought into a building project 5 years ago. bought a 1.1 million condo. they are almost completed but listed on the developers website for 1.7 million. in reality if you try to sell them you are lucky to get 800k. all b#llshit. i bought into the second stage. i am in a face book group of people who live in the first stage of the development, it is a disaster. place is palling apart already and they still do not have titles after waiting for more than 2 years. biggest mistake i have ever made in my life buying off plan.

Yep, happens a lot. No such thing as Thai quality condos.

" Let the buyer Beware" Should now say. " Run Away "

[newnative]

If you are here short-term,  rent.   If you are living here year-round and expect to be here for some years, buying has some advantages--especially if you like to own your own space, have your own things, and be able to make changes.  If you buy off-plan, only buy from an established builder, preferably a public company listed on the Thai stock market--steer clear of 'mom and pop' family-owned operations.  If you have a choice, don't buy the furniture package if it is offered.  Always buy foreign name. I don't know Chiang Mai that well but go for location, location, location and try to get a view.  In Pattaya, a sea view counts for a lot and condos on the baht bus line are more desirable.  Look for a good room plan and a usable balcony. 

[bark]

On 24/9/2559 at 5:13 PM, Peterw42 said:

 

If a sine wave represents 360 degrees, 90 degrees is the peak, 270 degrees is the trough. I would say around 240 degrees.

still going down, but hasn't reached the bottom yet. IMO

As a surfer, I would say.  "The next wave is the best wave "

Now I wave, By Bye Buy.

[vukovar77]

Buying condo in Thailand is not investment!!!It is consumption!!!

 

[helloagain]

57 minutes ago, newnative said:

If you are here short-term,  rent.   If you are living here year-round and expect to be here for some years, buying has some advantages--especially if you like to own your own space, have your own things, and be able to make changes.  If you buy off-plan, only buy from an established builder, preferably a public company listed on the Thai stock market--steer clear of 'mom and pop' family-owned operations.  If you have a choice, don't buy the furniture package if it is offered.  Always buy foreign name. I don't know Chiang Mai that well but go for location, location, location and try to get a view.  In Pattaya, a sea view counts for a lot and condos on the baht bus line are more desirable.  Look for a good room plan and a usable balcony. 

 

[helloagain]

Just go look at realestate websites in chiang mai. Just see how many for sale. When you want to sell you are in competition with them all. Rent........if you have a problem with next door just move you buy can take years to sell

[nickmondo]

DO NOT BUY OFF PLAN AS AN INVESTMENT................EVER...........

I dont know your nationality........but if you are english, then you would be much safer and better off, buying a buy to let in England.........

I have worked in Real Estate where hundreds of people did not get their property because the developer did a runner...........really.......its sooooo risky.........do not do it

[trogers]

3 hours ago, williamgeorgeallen said:

so i bought into a building project 5 years ago. bought a 1.1 million condo. they are almost completed but listed on the developers website for 1.7 million. in reality if you try to sell them you are lucky to get 800k. all b#llshit. i bought into the second stage. i am in a face book group of people who live in the first stage of the development, it is a disaster. place is palling apart already and they still do not have titles after waiting for more than 2 years. biggest mistake i have ever made in my life buying off plan.

 

The test of time.

 

I only buy old condos for investment.

 

First, their prices has little speculative froth. Off plan ones have the most froth, from both developer's pricing and flippers.

 

Two, I can see the type of occupants in an old building and the demand from potential tenants, that is, how easy it would be to rent it out and the rent value.

 

Three, how well the old building is being maintained and the attitude of majority of the owners towards upkeeping it.

 

Four, you can refurbished the interior of an old unit with quality while you need to wait a few years for the interior of newly built units to fall apart.

[1FinickyOne]

Oh, sorry - that 2 MM baht condo was sold - - the cheapest ones we have are 3.7MM... thanks for your inquiry...

 

And what are you going to do with the condos? Renting is a job... it is definitely a buyers market as there are many many units unsold on the market already... 

 

good idea, but a real challenge.. 

 

stock market has been better for me. 

[trogers]

17 minutes ago, kenk24 said:

Oh, sorry - that 2 MM baht condo was sold - - the cheapest ones we have are 3.7MM... thanks for your inquiry...

 

And what are you going to do with the condos? Renting is a job... it is definitely a buyers market as there are many many units unsold on the market already... 

 

good idea, but a real challenge.. 

 

stock market has been better for me. 

 

Renting is a good job for retirees while the stock market is high risk for retirement funds...?

[williamgeorgeallen]

buying apartments back in western countries leveraged is a safer mover. i get about 8% of my 3 places back in nz. i can own 3 because they have a part mortgage over them. i dont know anyone here who has made much money off condos. almost every one who bought off plan that i know wished they didnt. if you really know what you are doing you may be able to do ok in hot bangkok locations but you are looking at a much larger investment.

[1FinickyOne]

1 hour ago, trogers said:

 

Renting is a good job for retirees while the stock market is high risk for retirement funds...?

 

I had rentals back home and never cared too much for being a landlord... maybe retirement should not be mixed with business, at least not for me, but to each his own... I know there are people who get a decent ROI and I have considered it, but I really do not need any aggravation at this point in life. 

[212Roger]

Just "rent" in Thailand.  Invest someplace else.

[chilli42]

If you like RE then buy a place that has a coule of years on it so that you know how it's holding up and being managed.  Try to get something that is in a distress sale.  These are often auctioned by bank and others.  Fix it up a bit and make it look presentable.  Then rent it out.  You have rental income and capital appreciation.  If you think there is an easy way to make money that is too good to be true ... that's because it is too good to be true.  

 

If you want a long term investment that has a great upside potential, consider biotech stocks in the US.  Can spread the risks by buying buying Biotech ETF's.

Edited September 26, 2016 by chilli42

[lvr181]

Check the price of any  units that have sold (not their asking price) of the condominium you thought you should have invested in and see what the "gains" were? And don't forget to deduct from the gains the costs of buying and selling and perhaps any loan interest costs as well to assess any true profit. Alternatively, these would be added to a loss, on sale.

 

Then you could consider the opportunity lost by investing elsewhere. And never invest what you cannot afford to lose. Consider your own "risk profile".

 

Remembering always that a good decision on time is always better than a brilliant decision too late.

 

 

Edited September 27, 2016 by lvr181
Grammar

[wpcoe]

1 hour ago, lvr181 said:

Check the price of any  units that have sold (not their asking price) of the condominium you thought you should have invested in and see what the "gains" were?

 

How do you obtain that information in Thailand?  Even if you can access the Land Office records, the amount recorded for the sale there usually doesn't match the actual selling price.