Rent divided by Buy Price Numbers for condos in Bangkok

[Bulldozer Dawn]

1 minute ago, blackcab said:

 

Not during 2017, because the old tax system is still being used (tax demands are being issued right about now).

 

Don't forget that your wife won't be taxed on her principle residence (as long as it isn't worth a lot of money!) - As long as she is listed in the house book.

What if you hold a usufruct over a property held by a Thai.  Who is liable for the tax?

[Bulldozer Dawn]

23 minutes ago, blackcab said:

 

Not during 2017, because the old tax system is still being used (tax demands are being issued right about now).

 

Don't forget that your wife won't be taxed on her principle residence (as long as it isn't worth a lot of money!) - As long as she is listed in the house book.

 

What is the tax rate?  It would seem logical that buy to let owners will seek to pass this on to tenants.  And perhaps also logical to assume that rents in Thailand will increase roughly the same percentage as the new tax rate?

Edited February 17, 2017 by Bulldozer Dawn

[chrisandsu]

9 minutes ago, blackcab said:

 

Not during 2017, because the old tax system is still being used (tax demands are being issued right about now).

 

Don't forget that your wife won't be taxed on her principle residence (as long as it isn't worth a lot of money!) - As long as she is listed in the house book.

Thanks for the info . What about raw land with nothing built on it ? She owns a few plots here and there , what's the tax rates like if we was to pay for any reason ?

[trogers]

36 minutes ago, Bulldozer Dawn said:

 

What is the tax rate?  It would seem logical that buy to let owners will seek to pass this on to tenants.  And perhaps also logical to assume that rents in Thailand will increase roughly the same percentage as the new tax rate?

Owners seek to pass this on to tenants?

 

Doubt they can do so in such a competitive market, unless existing rent is so low that it is still cheaper after the raise than the competition.

[JB300]

Rental value x 12 months x 100/ the % you apply should give you what you want, e.g.
                                                                                                                                    15,000 per month rent x 12 months
                                                                                                                               = 180,000 baht/say 3% = 6,000,000 baht
 
This can be adjusted by the % you want to reflect to bring it in line with the market, e.g. 180,000 baht/ 4% = 4,500,000 baht
 
Other factors to be taken into consideration are the age of the building, i.e. the older, the higher the % to be applied because of maintenance and higher levies to be applied, the further away from the CBD, the higher the % applied and so on and so forth.
 
This is how I used to apply my calculations as an investor, real estate agent and property valuer for 25 years in the Sydney market, my primary method was always comparable sales within a given period, i.e. 3 months in a hot market, 6 in a normal market, also removing out of line sales, like inflated sales, inter-family related sales etc etc, whether this formula could be applied here, I don't know, but give it a whirl and let me know how you go, if you like.
 
Me personally, I wouldn't be buying in Thailand as I hear units/apartments/condos are a dim a dozen, if you are adamant you want in, I would suggest you rent to start with, you know, try before you buy, until you become more familiar with the market, buildings, demographics, sales evidence, and agents, and when you are ready to pounce, then you pounce.
 
Also forgot to mention but funandsuninbangkok mentioned it in an earlier post, buy into an established building, I don't know if you have them here, but in Oz you could order a strata report whereby for a couple of hundred bucks a company rep would go in and check the books to see where money has been spent, i.e. money in, money out (levies) and the history of the building, annual meetings, major repairs etc etc, last thing you want to be buying into is a "special levy" which was made at the last annual general meeting for 500,000 baht per unit for repairs to the cancer in the building, etc etc, that means as the new owner, you would be up for it.
 
As for new buildings, well do you know what your buying into, i.e. I remember valuing new ones back in Oz, not even having waterproof membranes down in the wet areas, no ones can see that because the tiling had gone down, and in some cases on the roof tops, then there was no undercoating on the main walls, just one thin layer of top coat, so when the builder shuts shop, where do you go, straight to the hip pocket. 
 
Most local agents tend to have a reputation, not the fly by night ones, and the more time you spend with them, you should be able to separate the snake, from the rat if that makes sense.  
 
Good Luck

I use a multiplier of 200 (feels right to me that's the only logic behind it) so a 15k pm rental property would be (to me, all other things being equal) fair value at 3Million.

6Million is 400 x monthly rent, is not far off the sorts of ratios you see in Singapore.

[trogers]

55 minutes ago, JB300 said:

 

I use a multiplier of 200 (feels right to me that's the only logic behind it) so a 15k pm rental property would be (to me, all other things being equal) fair value at 3Million.

6Million is 400 x monthly rent, is not far off the sorts of ratios you see in Singapore.
 

 

Cannot compare Thailand to Singapore.

 

Supply of development land in Singapore is very limited and is controlled tightly by the government. Thus, the range of property prices movement is state controlled.

[blackcab]

2 hours ago, Bulldozer Dawn said:

What if you hold a usufruct over a property held by a Thai.  Who is liable for the tax?

 

The Usufructee (the person enjoying the benefit of the Usufruct. Not the land owner).

 

This is well explained in CCC Section 1426:

 

"The usufructuary shall, for the duration of the usufruct, bear expenses for the management of the property, pay taxes and duties..."

[blackcab]

2 hours ago, Bulldozer Dawn said:

 

What is the tax rate?  It would seem logical that buy to let owners will seek to pass this on to tenants.  And perhaps also logical to assume that rents in Thailand will increase roughly the same percentage as the new tax rate?

 

The current tax rate is applied to commercial premises, rented property, etc. There is a formula, which is 12.5 per cent of your total annual rental income (note income, not profit).

 

A good rule of thumb is with 100 per cent occupancy, if the monthly rental rate is 6,000, the annual tax payable is 9,000 baht.

 

So if your wife rented out a condo for 1 year and received 60,000 baht a month she would be liable for tax of 90,000 baht payable in February the following year.

[4MyEgo]

2 hours ago, JB300 said:

 

I use a multiplier of 200 (feels right to me that's the only logic behind it) so a 15k pm rental property would be (to me, all other things being equal) fair value at 3Million.

6Million is 400 x monthly rent, is not far off the sorts of ratios you see in Singapore.
 

 

I dare say that would seem about right i.e. 6% using your method.

 

The Sydney market as you can appreciate returns such a lower yield, but higher capital gains, i.e. the lower the yield, the higher the gain, so to speak, but for how much longer the rise in property prices there will last is not hard to guess, as its been on the up since late 2012.

[JB300]

Cannot compare Thailand to Singapore.
 
Supply of development land in Singapore is very limited and is controlled tightly by the government. Thus, the range of property prices movement is state controlled.

Exactly which is why I use 1:200 for Thailand, 1:300 for Uk, 1:450 for Singapore.


FWIW, Philippines is more like 1:100 but I can't see my Ms letting me rent the house out [emoji17]

[Bulldozer Dawn]

Just now, blackcab said:

 

The Usufructee (the person enjoying the benefit of the Usufruct. Not the land owner).

 

This is well explained in CCC Section 1426:

 

"The usufructuary shall, for the duration of the usufruct, bear expenses for the management of the property, pay taxes and duties..."

What if the usufructuary uses the property as his primary residence?

[blackcab]

2 minutes ago, Bulldozer Dawn said:

What if the usufructuary uses the property as his primary residence?

 

Under the current taxation system the Usufructee is liable to pay, however the point you have highlighted is that Par See Rong Ruan is not payable on non-commercial property.

 

With the upcoming law it is going to be interesting, because residential property can be taxed under some circumstances. One of those circumstances is where one person owns multiple homes.

 

Generally, their primary residence would not be taxed, but additional homes would be assessed for tax.

 

If we take the scenario you listed above of:

 

a non-Thai obtaining a usufruct from a Thai;

the Thai usufructor has a separate primary residence;

The non-Thai usufructee uses the usufructed property as their primary residence,

 

then the taxation system will stop because it will not be able to compute.

 

On one side the law clearly says the Usufructee shall pay taxes. However if this is the Usufructee's primary residence (and they have a yellow book to prove it) then no tax would be payable under the proposed system.

 

This is in contrast to the land owner having to pay tax on what would have been a second home if the usufruct was not granted. This means that under the proposed system the tax man could potentially lose revenue as a result of usufructs.

 

Imagine if people realised all you had to do to avoid tax on second homes was to issue a short term usufruct to a foreigner and get them put in the yellow book...

 

It could potentially result in considerable lost tax revenue, which is why it won't happen. Something will be done to ensure someone pays something.

 

I have no idea what, but one solution would be to assess the usufructed property at the rate of a second home of the land owner, then make the Usufructee pay.  This is just speculation, however, as the proposed tax system is not yet effective.

[funandsuninbangkok]

14 hours ago, Bulldozer Dawn said:

So your prediction for the crash is in two years time?

 

 

Crash is here now. Google kc property bills of exchange. Defaulted last month. SET all in a titthers. 

 

Recent news titled things like defaults to be limited...  don't worry but ....

[funandsuninbangkok]

16 hours ago, chrisandsu said:

Yeah that's strange . My wife owns a house and property but pays no tax . When do I expect a bill ? 

2018

[funandsuninbangkok]

15 hours ago, Bulldozer Dawn said:

Trogers

 

You say not long now until the property crash.  How long exactly?

 

Still lots of people guzzling Thai property Kool Aid.

 

This hot off the press from Bualuang this morning:

 

AREA’s Jan 2017 survey reported surprisingly few launches, but reassured the market ahead of increasing activity in Feb and Mar with a good take-up rate for the first month of the year. Coverage presales should rebound YoY and QoQ in 1Q17.  Sector valuations are at bargain levels, with a BLS ResDev coverage FY17 PER of 8.5x, near the last correction in 1H16 and below the FY06-16 mean of 10.6x. We suggest Selective Buys of developers with exciting stories in 4Q16 and 2017--ANAN, AP, LPN, SPALI and SIRI.

 

SIRI is up 25% since January.  Has a 100 % dividend payout history and a currently quoted yield of 6.8 %.

 

SIRI rallied up strongly again yesterday is and currently knocking on the 2 baht per share resistance level.  Predicted target price is 2.10.

 

For anyone that is interested, you can view live price quotes for ANAN, AP, LPN, SPALI, SIRI here:

 

Live Price Quotes

 

 

 

 

Knocking on the 2 baht level!

 

wow!  Buy now! Hurry!  

 

Its a great time to buy !

 

Great investment!

 

location location location!

 

[trogers]

10 minutes ago, funandsuninbangkok said:

 

 

Crash is here now. Google kc property bills of exchange. Defaulted last month. SET all in a titthers. 

 

Recent news titled things like defaults to be limited...  don't worry but ....

That's a developer of landed properties in the fringes of Bangkok.

 

We are more interested in those big boys doing condo buildings which we foreigners can own.

[funandsuninbangkok]

Just now, trogers said:

That's a developer of landed properties in the fringes of Bangkok.

 

We are more interested in those big boys doing condo buildings which we foreigners can own.

Crashes start at the fringes. Quickly work their way to the middle. 

 

Big guys were betting on Chinese money and that got shut down last month. 

 

Trump bump is is going to put a squeeze on money and when it all goes rushing out of Thailand, we gona see who's swimmin' nekid 

[trogers]

30 minutes ago, funandsuninbangkok said:

Crashes start at the fringes. Quickly work their way to the middle. 

 

Big guys were betting on Chinese money and that got shut down last month. 

 

Trump bump is is going to put a squeeze on money and when it all goes rushing out of Thailand, we gona see who's swimmin' nekid 

The condo market in Bangkok is definitely in oversupply, and even if foreigners take up that 49%, a new launch in the heart of the city would depend on Thais with cash to book the portion of 51%.

 

Some big boys have already seen the writings on the wall. LPN recently kicked their non-core businesses out to survive in the wilderness...

[Bulldozer Dawn]

6 hours ago, funandsuninbangkok said:

 

 

Crash is here now. Google kc property bills of exchange. Defaulted last month. SET all in a titthers. 

 

Recent news titled things like defaults to be limited...  don't worry but ....

 

"SET all in titthers"

 

What a ridiculous throwaway statement.

 

The SET can go up and down, and quickly in either direction.

 

It is just as easy to make money trading on the SET if prices are falling:

 

How to Short Sell the Thai Stock Market

 

How to Short Sell Thai Shares

 

And if you do hold shares in a Thai property company you would protect your capital using a trailing stop:

 

How to Use Trailing Stops in Thailand

 

 

Edited February 18, 2017 by Bulldozer Dawn

[funandsuninbangkok]

1 minute ago, Bulldozer Dawn said:

 

"SET all in titthers"

 

What a ridiculous throwaway statement.

 

The SET can go up and down, and quickly in either direction.

 

It is just as easy to make money trading on the SET if prices are falling:

 

How to Short Sell the Thai Stock Market

 

How to Short Sell Thai Shares

 

 

Yes I am king of ridiculous statements. 

 

And you obviously are are ruler of SET trading. Billionaire no doubt. Congratulations to you Sir!

[Bulldozer Dawn]

5 hours ago, trogers said:

The condo market in Bangkok is definitely in oversupply, and even if foreigners take up that 49%, a new launch in the heart of the city would depend on Thais with cash to book the portion of 51%.

 

Some big boys have already seen the writings on the wall. LPN recently kicked their non-core businesses out to survive in the wilderness...

 

I have some Thai property investments, controlled by way of usufruct. In fact I am off to look at some more land today.  They are regular Thai style house and land plots.  I started a thread on one of the purchases last year and the kind and very knowledgeable member Blackcab, provided me with a good deal of useful feedback and advice. I stopped posting on the thread because of the flood of idiot comments.  The little house I bought is now yielding circa 10% rental return.  The road that it sits on has also recently been nicely paved with concrete and a few of the Thai neighbours in that area (who have recently used their chanotes to borrow to buy cars) have told me the value of their properties has gone up accordingly.  I recently received an attractive offer to buy the house (from a Thai) but have decided to hold on to it.

 

Notwithstanding some modest success, I still think that trading on the Stock Exchange of Thailand is much preferable to direct investment into Thai property.

 

As I posted above, it is easy to make money when prices on the SET are falling.

 

If you like to buy property, how does one make money (other than waiting) when property prices are falling, or, worse still, deflating slowly over years or decades (the scenario Trogers has adumbrated in his post above).

[trogers]

2 hours ago, Bulldozer Dawn said:

 

I have some Thai property investments, controlled by way of usufruct. In fact I am off to look at some more land today.  They are regular Thai style house and land plots.  I started a thread on one of the purchases last year and the kind and very knowledgeable member Blackcab, provided me with a good deal of useful feedback and advice. I stopped posting on the thread because of the flood of idiot comments.  The little house I bought is now yielding circa 10% rental return.  The road that it sits on has also recently been nicely paved with concrete and a few of the Thai neighbours in that area (who have recently used their chanotes to borrow to buy cars) have told me the value of their properties has gone up accordingly.  I recently received an attractive offer to buy the house (from a Thai) but have decided to hold on to it.

 

Notwithstanding some modest success, I still think that trading on the Stock Exchange of Thailand is much preferable to direct investment into Thai property.

 

As I posted above, it is easy to make money when prices on the SET are falling.

 

If you like to buy property, how does one make money (other than waiting) when property prices are falling, or, worse still, deflating slowly over years or decades (the scenario Trogers has adumbrated in his post above).

Real estate is just one class of asset for investment among many, giving slow and steady returns for relatively low risk.

 

It's all to do with risk and returns, like the different investment strategies between retirement funds and hedge funds.

 

When you invest in property cycles, you have to go international. Different capital cities are at different stages of their cycles.

 

For example, Singapore may be bottoming out this year, after prices have fallen for over 2 years. The only obstacle is the additional stamp duties.

[Bulldozer Dawn]

Blackcab and Trogers

 

I have just got back from viewing some bare land.

 

It is nor sor sam gor with chanote and cement pegs in place. Fronts a newly concreted road.  

 

In the hinterland with nice outlook to the mountains.  Electricity and internet available at the front of the property.

 

Perfectly  square block.  A bit over 1 ngan (106 talangwah)

 

Corner block. Fronts main concrete road and map (and cement pegs) show road (not yet done) down one side.  Already two very large and expensive farang houses built up the street.

 

400K baht.

 

I can also buy the 1 ngan block to the rear for 350K baht (with separate chanote).

 

The location is about 5 minutes ride from some beautiful beaches and several major five star resorts.

 

What do you think?

[trogers]

1 hour ago, Bulldozer Dawn said:

Blackcab and Trogers

 

I have just got back from viewing some bare land.

 

It is nor sor sam gor with chanote and cement pegs in place. Fronts a newly concreted road.  

 

In the hinterland with nice outlook to the mountains.  Electricity and internet available at the front of the property.

 

Perfectly  square block.  A bit over 1 ngan (106 talangwah)

 

Corner block. Fronts main concrete road and map (and cement pegs) show road (not yet done) down one side.  Already two very large and expensive farang houses built up the street.

 

400K baht.

 

I can also buy the 1 ngan block to the rear for 350K baht (with separate chanote).

 

The location is about 5 minutes ride from some beautiful beaches and several major five star resorts.

 

What do you think?

I am not into land in Thailand.

[chrisandsu]

1 hour ago, Bulldozer Dawn said:

Blackcab and Trogers

 

I have just got back from viewing some bare land.

 

It is nor sor sam gor with chanote and cement pegs in place. Fronts a newly concreted road.  

 

In the hinterland with nice outlook to the mountains.  Electricity and internet available at the front of the property.

 

Perfectly  square block.  A bit over 1 ngan (106 talangwah)

 

Corner block. Fronts main concrete road and map (and cement pegs) show road (not yet done) down one side.  Already two very large and expensive farang houses built up the street.

 

400K baht.

 

I can also buy the 1 ngan block to the rear for 350K baht (with separate chanote).

 

The location is about 5 minutes ride from some beautiful beaches and several major five star resorts.

 

What do you think?

You didn't ask me but I'll poke my nose anyway .... I think land is grossly over priced in thailand. You are not giving away the location so it would be hard to say if the land is worth it ! It could be flood land /borders a national park where the chanote is contentious , or many other reasons . Let's put it this way would you spend 1.6 million baht for 1/3 of an acre of rubbish farm

land in your own country ? That you can't even own ? There is a huge bubble in condo prices the bubble in land price is astronomical !  

[Bulldozer Dawn]

1 hour ago, chrisandsu said:

You didn't ask me but I'll poke my nose anyway .... I think land is grossly over priced in thailand. You are not giving away the location so it would be hard to say if the land is worth it ! It could be flood land /borders a national park where the chanote is contentious , or many other reasons . Let's put it this way would you spend 1.6 million baht for 1/3 of an acre of rubbish farm

land in your own country ? That you can't even own ? There is a huge bubble in condo prices the bubble in land price is astronomical !  

Chanote is solid.  400K for 400 square meters.  So 1000 baht per meter.  Flat square block fronting a concrete road 5 minutes from the beach.  Hardly astronomical I would think.  

Edited February 18, 2017 by Bulldozer Dawn

[blackcab]

2 hours ago, Bulldozer Dawn said:

It is nor sor sam gor with chanote and cement pegs in place. Fronts a newly concreted road. 

 

I don't understand what you mean. It is either NS3G or Chanote (NS4).

 

There is a difference.

[Bulldozer Dawn]

Just now, blackcab said:

 

I don't understand what you mean. It is either NS3G or Chanote (NS4).

 

There is a difference.

It is NS3G, what I meant is that I have a seen a copy of the title deed.  I have no problem with NS3G.  The house I bought last year is on the same title, and I didn't have any problems at the local LTO registering a usufruct on the deed.

[blackcab]

16 minutes ago, Bulldozer Dawn said:

It is NS3G, what I meant is that I have a seen a copy of the title deed.  I have no problem with NS3G.  The house I bought last year is on the same title, and I didn't have any problems at the local LTO registering a usufruct on the deed.

 

The only thing I would do is check with the land office whether that land is marked as a forest.

 

I'm currently dealing with someone who paid 150 million for some NS3G land. They applied to upgrade it to NS4 and they have hit a brick wall, with the land office saying the land could be confiscated as it used to be a forest a long time ago.

 

So it's good to check.

[Bulldozer Dawn]

I bought the other little house last year for 410K all in.  I spent about 200K to finish it off and currently rent is for 5K a month on a 1 year lease.  So I am getting a gross return of circa 10%.

 

I learned a lot from that project.  I think I can have a similar little house built for about 350K.  But in the location of this new block, I should be able to get 6-7k per month.  So the project would owe me circa 750K to complete with a similar potential return.