What puts you off investing in real estate?

[madmax2]

2 minutes ago, mcfish said:

Good try but where did I say "everyone" I said millions
There is dud real estate deals and bankrupt developments in every country on the planet
Got to say you don't come across as being very bright

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Very few real estate transactions go bad in Australia and if they do the buyer is covered by a real estate fund set up nationally by estate agents and the government and gets their money back

Crooked corrupt people who try to sell real estate in Australia do not last long and can look forward to a long holiday at the governments expense

So they come to Asia where they can get away with just about anything as long as they do not try it with the wrong people

You can and people do loose money who invest in real estate funds operated in the share market, that's different like investing in any shares you take your chance on winning or losing  

[mcfish]

Very few real estate transactions go bad in Australia and if they do the buyer is covered by a real estate fund set up nationally by estate agents and the government and gets their money back
Crooked corrupt people who try to sell real estate in Australia do not last long and can look forward to a long holiday at the governments expense
So they come to Asia where they can get away with just about anything as long as they do not try it with the wrong people
You can and people do loose money who invest in real estate funds operated in the share market, that's different like investing in any shares you take your chance on winning or losing  

I grew up on the Gold Coast, there were more dud developers and con men there then you will ever find in Thailand! I never said there were no failed developments here so let it go

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[SaintLouisBlues]

On 11/17/2016 at 5:11 PM, Bassosa said:

Anything else to add?

Poor building standards would be one. However, by and large, many buildings don't appreciate in price so that, in effect, the interest you pay on your mortgage is the equivalent of the rent you'd be paying. The capital cost is then paid off over time, but what it costs is - possibly - all you'd get back. Comparing interest costs to rents, it's clear that renting is a cheaper option. I recall responding a couple of weeks ago to someone who was keen to let us all know what a brilliant guy he is because he'd bought in a good building which had kept or possibly even increased in value. When I mentioned rents however as a factor in making a decision, he failed to comprehend the significance for owner-occupiers because, as he admitted, he had bought to use as an income-producing asset via AirBNB, not at all what the run-of-the-mill home owner does. Given that, as many posters keep reminding us, we're merely guests here, I'd be keeping minimal assets in Thailand

[trogers]

4 hours ago, SaintLouisBlues said:

Poor building standards would be one. However, by and large, many buildings don't appreciate in price so that, in effect, the interest you pay on your mortgage is the equivalent of the rent you'd be paying. The capital cost is then paid off over time, but what it costs is - possibly - all you'd get back. Comparing interest costs to rents, it's clear that renting is a cheaper option. I recall responding a couple of weeks ago to someone who was keen to let us all know what a brilliant guy he is because he'd bought in a good building which had kept or possibly even increased in value. When I mentioned rents however as a factor in making a decision, he failed to comprehend the significance for owner-occupiers because, as he admitted, he had bought to use as an income-producing asset via AirBNB, not at all what the run-of-the-mill home owner does. Given that, as many posters keep reminding us, we're merely guests here, I'd be keeping minimal assets in Thailand

 

Many buildings don't appreciate in price?

 

Some may not, especially those buildings still with unsold stocks: some old ones from the 1998 crisis and some new ones that were completed in the last few years.

[SaintLouisBlues]

12 hours ago, trogers said:

Many buildings don't appreciate in price?

 

Some may not, especially those buildings still with unsold stocks: some old ones from the 1998 crisis and some new ones that were completed in the last few years.

Are you confusing "many" with "most"? I wrote "many", I meant "many" and the examples you have quoted are, indeed, "many".

[chiang mai]

19 hours ago, SaintLouisBlues said:

Poor building standards would be one. However, by and large, many buildings don't appreciate in price so that, in effect, the interest you pay on your mortgage is the equivalent of the rent you'd be paying. The capital cost is then paid off over time, but what it costs is - possibly - all you'd get back. Comparing interest costs to rents, it's clear that renting is a cheaper option. I recall responding a couple of weeks ago to someone who was keen to let us all know what a brilliant guy he is because he'd bought in a good building which had kept or possibly even increased in value. When I mentioned rents however as a factor in making a decision, he failed to comprehend the significance for owner-occupiers because, as he admitted, he had bought to use as an income-producing asset via AirBNB, not at all what the run-of-the-mill home owner does. Given that, as many posters keep reminding us, we're merely guests here, I'd be keeping minimal assets in Thailand

 

When I moved here fifteen years ago GBP/THB was over 70, today it's 43. By buying property here I have lived rent free for fifteen years and also doubled my assets, don't tell me that keeping minimal assets in Thailand is a good idea.

[SaintLouisBlues]

12 minutes ago, chiang mai said:

... also doubled my assets,

Can you explain the math? You're saying that IF you sold and IF you then converted your sale proceeds back to GBP you'd have twice as much as when you started? And that would be more than someone who had bought property or unit trusts or whatever in the UK and kept them? And of course that's only true for a UK person, not an American or an Aussie, for example

Edited November 19, 2016 by SaintLouisBlues

[jimmyyy]

mostly its the agents, i find them to be <deleted>.  

[chiang mai]

Just now, SaintLouisBlues said:

Can you explain the math? You're saying that IF you sold and IF you then converted your sale proceeds back to GBP you'd have twice as much as when you started? And that would be more than someone who had bought property or unit trusts or whatever in the UK and kept them?

 

Sure. I bought GBP into Thailand in increasingly large amounts at rates of between 68 and 76 between 2002 and 2006, I bought my first condo in CM for 6.2 mill at a rate of 74 baht per Pound and I bought my CRV at the same rate.  

 

I sold that condo five years ago for 7.9 mill. and put some of the money back into rental income and the rest into TD's, I bought my present home for 3 million using TD funds and today it's land value alone is in excess 4 mill. Recently I converted some THB back into GBP at 42 and put that money into UK real estate and I still have living expenses for the next twelve years here in Thailand.

[laislica]

I think it may rather depend on your reason for investing.

If it's to create an income then this thread has many posters on the same theme, ie

unless you have a fortune to play with - forget it.

 

However, if you are committed to living in Thailand, then buying makes great sense as detailed by Chiangmai.

He has saved money on rent, has control over his property and can modify them over time, by extensions etc as required.

My reason to buy is to provide my wife with a stable, paid for residence for after I pass (I am 20 yrs olner than her). Also to provide a property that is rented out so she will have a modest income as my pensions travel with me on my next big adventure LOL

Happy wife, happy life, but each to their own.

Just sayin.

 

[SaintLouisBlues]

9 minutes ago, chiang mai said:

 

Sure. I bought GBP into Thailand in increasingly large amounts at rates of between 68 and 76 between 2002 and 2006, I bought my first condo in CM for 6.2 mill at a rate of 74 baht per Pound and I bought my CRV at the same rate.  

 

I sold that condo five years ago for 7.9 mill. and put some of the money back into rental income and the rest into TD's, I bought my present home for 3 million using TD funds and today it's land value alone is in excess 4 mill. Recently I converted some THB back into GBP at 42 and put that money into UK real estate and I still have living expenses for the next twelve years here in Thailand.

You'd have living expenses wherever you are so that's irrelevant. How is what you've done a superior outcome on the capital account to simply keeping and investing your money in the UK? I bought a FTSE index fund in 2002 and sold at the beginning of 2008 making a profit of 50%; I then re-entered the market in late 2008 and sold out when the price had doubled a couple of years ago. It's not hard to double your money and more given 15-year timeframes

[chiang mai]

Just now, SaintLouisBlues said:

You'd have living expenses wherever you are so that's irrelevant. How is what you've done a superior outcome on the capital account to simply keeping and investing your money in the UK? I bought a FTSE index fund in 2002 and sold at the beginning of 2008 making a profit of 50%; I then re-entered the market in late 2008 and sold out when the price had doubled a couple of years ago. It's not hard to double your money and more given 15-year timeframes

 

Good for you but you still paid rent!

 

And the issue is not if there are different ways to double your money, the issue in this thread is solely whether a person should invest in real estate here and whether they should keep minimal funds in Thailand, I say yes and no respectively.

[laislica]

1 minute ago, SaintLouisBlues said:

You'd have living expenses wherever you are so that's irrelevant. How is what you've done a superior outcome on the capital account to simply keeping and investing your money in the UK? I bought a FTSE index fund in 2002 and sold at the beginning of 2008 making a profit of 50%; I then re-entered the market in late 2008 and sold out when the price had doubled a couple of years ago. It's not hard to double your money and more given 15-year timeframes

 

and there will be some winners and some losers.

Maybe you were lucky?

Not sure this thread is about how to gain the maximum profit by investment?

[tifino]

 

Buy into a property,

and then the extended family invites themselves in

 

 - you get kicked out...

 

 

You can then withdraw and live on the 'more than minimal' funds

(that the family doesn't know about)

 

 

and you then go rent, alone, happily ever after...

 

 

...unless you invest in a new family

 

[chiang mai]

6 minutes ago, tifino said:

 

Buy into a property,

and then the extended family invites themselves in

 

 - you get kicked out...

 

 

You can then withdraw and live on the 'more than minimal' funds

(that the family doesn't know about)

 

 

and you then go rent, alone, happily ever after...

 

 

...unless you invest in a new family

 

 

"Buy into a property,

and then the extended family invites themselves in

 

 - you get kicked out..."

 

Rubbish! There are several simple ways to avoid that scenario, an usufruct for one..

[madmax2]

 if you have retired to Thailand and have a Thai wife and or family it makes sense to buy

if you live here permanently

I prefer houses as you can maintain them and keep them up to date and looking nice yourself

we do not buy new homes because of the poor building standards here and if in a new estate

they all look well maintained for the first 2 or 3 years until the project is sold out

We look for established homes a few years old that are well built ( be aware freshly painted quite often means they are covering up faults and cracks)

IT also it allows you to look at the surrounding homes and how they are maintained, if your neighbors cannot afford to look after their property it will lower  the value of your own property

and make it harder to sell in the future

 

I am not interested in condos even though foreigners can own them

Seen to many where the corporate body/management fees go into the developers pockets and they look like slums after about 10 years

Some people prefer them and its their money and their choice

Probably better of looking at condos if interested a few years old and occupied by the owners 

Who you can ask questions about them, a lot more likely to get honest answers if they are not

trying to sell their own unit

[lkn]

43 minutes ago, madmax2 said:

I am not interested in condos even though foreigners can own them

Seen to many where the corporate body/management fees go into the developers pockets […]

 

Certainly not the developer? My experience is that while they still have unsold units, they want to have as low CAM fees as possible but also make the building appear in its best condition (to make it easier to sell units).

 

Where I currently live, all the co-owners receive a monthly spreadsheet showing expenses year-to-date, so we can follow along. Nobody is pocketing any money, and I know of many other condominiums who do something similar.

[blackcab]

2 hours ago, lkn said:

 

Certainly not the developer? My experience is that while they still have unsold units, they want to have as low CAM fees as possible but also make the building appear in its best condition (to make it easier to sell units).

 

Where I currently live, all the co-owners receive a monthly spreadsheet showing expenses year-to-date, so we can follow along. Nobody is pocketing any money, and I know of many other condominiums who do something similar.

 

It's not so much pocketing money. It can be:

 

Overpriced goods/supplies (kickbacks)

Maintenance/Janetorial supplies being stolen (or not delivered)

Ghost employees/Part time employees (full time salaries)

 

Not many people steal the cash. That is too easy to spot.

[KittenKong]

10 hours ago, blackcab said:

It's not so much pocketing money. It can be:

 

Overpriced goods/supplies (kickbacks)

Maintenance/Janetorial supplies being stolen (or not delivered)

Ghost employees/Part time employees (full time salaries)

 

Not many people steal the cash. That is too easy to spot.

 

Also not issuing receipts for various incoming payments (wifi cards, key-cards, cleaning services, technician services, renovation fees, fines etc etc) and pocketing the cash.

 

Not forgetting fake petty cash expenses (500B for gasoline every month for a building manager who doesn't actually ever need to go anywhere).

 

And I've known management to also simply steal cash from the till and fudge the accounts to hide the shortfall. 

[Anthony5]

17 hours ago, chiang mai said:

 

"Buy into a property,

and then the extended family invites themselves in

 

 - you get kicked out..."

 

Rubbish! There are several simple ways to avoid that scenario, an usufruct for one..

 

 

I'm sure you are aware that an usufruct between spouses can be declared void in case of divorce.

[chiang mai]

1 hour ago, Anthony5 said:

 

 

I'm sure you are aware that an usufruct between spouses can be declared void in case of divorce.

 

Yes indeed but the poster doesn't say he's married. I have an usufruct and I'm not married but after fifteen years I consider I am part of an extended family.

Edited November 20, 2016 by chiang mai

[trogers]

23 hours ago, chiang mai said:

 

"Buy into a property,

and then the extended family invites themselves in

 

 - you get kicked out..."

 

Rubbish! There are several simple ways to avoid that scenario, an usufruct for one..

 

This issue is about investing in real estate, and a usufruct is not an investment as it cannot be cashed out...

[chiang mai]

21 minutes ago, trogers said:

 

This issue is about investing in real estate, and a usufruct is not an investment as it cannot be cashed out...

 

Think insurance.

 

And actually yes it can be cashed out in that an usufructee can sell a 30 year lease for real estate held under the ususfruct.

Edited November 21, 2016 by chiang mai

[trogers]

12 minutes ago, chiang mai said:

 

Think insurance.

 

And actually yes it can be cashed out in that an usufructee can sell a 30 year lease for real estate held under the ususfruct.

 

How can it be sold as a 30-year lease when it is only valid for the lifetime of the usufruct holder?

 

Besides, who would buy it over?

Edited November 21, 2016 by trogers

[chiang mai]

Just now, trogers said:

 

How can it be sold as a 30-year lease when it is only valid for the lifetime of the usufruct holder?

 

The 30 year lease appears to survive the usufructee.

[luk AJ]

The fact that city property in Bangkok is as expensive as many major western hubs now.

http://www.globalpropertyguide.com/most-expensive-cities



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[ricklev]

1 hour ago, chiang mai said:

 

Think insurance.

 

And actually yes it can be cashed out in that an usufructee can sell a 30 year lease for real estate held under the ususfruct.

As a lawyer and lecturer in Thai business law I promise you no land office should allow the holder of a usufruct to register a 30 year lease (but strange things do happen here.....)   Registering a lease is not a right granted to the holder of a usufruct.  Any lawyer that tells you differently doesn't know what they are talking about.  Ask them for a specific example of when they did it!

 

I know exactly how that misinformation started and without going into the details of the Supreme Court case I can assure you that the idea that a right has been established is absolutely false.  In fact, I have discussed this issue with 2 Supreme Court judges and leading property law professors.

 

Any investment decision based on the idea that you can get a return on your investment by leasing the property for thirty years is a major error in judgement.

 

I only write this because their was a time when I first arrived here that I told clients that a 30+30+30 lease was a good idea and I feel guilty about  helping to spread that falsehood.  

Edited November 21, 2016 by ricklev

[chiang mai]

Interesting.

 

Except Siam Legal sees things differently:

 

"An interesting feature of usufruct is that the usufructuary can enter into a 30-year lease with a third party. So if the usufructuary signed a 30-year lease contract before his death, the lessee (tenant) will maintain the rights of the lease until its expiration."

 

http://www.siam-legal.com/realestate/Usufructs.php

 

With all due respect it's difficult to know who or what to believe on this!

Edited November 21, 2016 by chiang mai

[ricklev]

23 minutes ago, chiang mai said:

Interesting.

 

Except Siam Legal sees things differently:

 

"An interesting feature of usufruct is that the usufructuary can enter into a 30-year lease with a third party. So if the usufructuary signed a 30-year lease contract before his death, the lessee (tenant) will maintain the rights of the lease until its expiration."

 

http://www.siam-legal.com/realestate/Usufructs.php

 

With all due respect it's difficult to know who or what to believe on this!

Lots of law offices have that info on their websites.  It's all copied from the same source and from each other.  I'm not trying to convince anyone of the law and I don't want any clients or business.  Just trying to stop any bad decisions.

 

Try saying this to one of those lawyers:  "Realistically, will I be able to register a lease if I have a usufruct?" and see what they say.......  

Edited November 21, 2016 by ricklev

[ricklev]

58 minutes ago, ricklev said:

Lots of law offices have that info on their websites.  It's all copied from the same source and from each other.  I'm not trying to convince anyone of the law and I don't want any clients or business.  Just trying to stop any bad decisions.

 

Try saying this to one of those lawyers:  "Realistically, will I be able to register a lease if I have a usufruct?" and see what they say.......  

Or try asking this question:  "I have a usufruct.  The owner of the land won't agree to go to the land office to help me register a thirty year lease to a third party.  I understand from your website that I can do this.  Can you handle this transaction for me?"

Edited November 21, 2016 by ricklev