Buy or not to buy.. That is the question?

Hello
I know that this is a subject that has been covered many times on different Thailand forums, and for this I apologise at raising the issue again.

I have been coming to LOS many years now and have visited the usual tourist spots - Bangkok, Pattaya, Chiang Mai/Rai, Phuket, Udon Thani etc. Latterly I have been visiting these places with a view to deciding which particular town/city I would like to retire to. (2007 retirement year)

Although it was a close call I have decided that I would like to split my retirement between my home in the UK (Summer time, which can be all of 2 days) and Pattaya, well probably Jomtien.

I have anguished over whether I should rent or whether I should buy. I have been made aware and warned of the potential тАШdangersтАЩ in buying property in Thailand. A potentially volatile country which offers very little in the legal rights department to expats, who wish to spend their hard earned savings and pensions in the country of their choice.

I am also told that the smart money is in renting, and in many ways I agree with this. I can see the proтАЩs and conтАЩs of both schools of thought тАУ however, not being that smart I have decided to buy. But should I buy a house or a condo. I have considered the complexities of buying/acquiring the land title in Thailand without a substantial investment or the setting up of a Thai Ltd company, or buying in a Thai name and leasing the property for 30, +30 years, etc, etc and I have decided to buy a condo. Yes, a condo!

I have holiday rented in View Talay 1 & 2 and therefore have an idea of what is on offer. I have also stayed in Yensabai Condo, but although the area is OK for a holiday visit IMHO, it is not somewhere that I would like to live on a more semi-permanent basis.

Before I buy I will be doing the (was it PeterUK?) trial of living in the тАШchosenтАЩ area/condo for a few months.

What I do not have is any info on other condoтАЩs in the Jomtien region. Could any of you knowledgeable readers recommend any condo developments in the area. Fair Properties have a good website that offers many condoтАЩs for sale but I know nothing about them other than the sales pitch.

Also hasn't John Botting got himself involved in real estate? Perhaps this would give him an opportunity to let us know the web address. :colors:

Thanks
Rogered

[bigben]

Rogered......Check your Email.

You're welcome. :idea:

I think you're right to go for a condo rather than a house, but don't rush into buying. I definitely think it's best to rent for a while first. If you're stayingg in a hotel while you look for somewhere you will get frustrated with the lack of a personal space and will feel pressured to buy quickly.

You don't indicate your budget, but if you can afford it, it's best to avoid a studio. Studios are the hardest to resell because there are just so many of them, with more being built all the time. The best buy is a corner unit with a nice view bought off-plan from a reliable company. To get one of these you will have to be quick - they usually sell out within a day or two of coming on the market. You will also have to wait 2-3 years before it's complete. If you don't want to rent that long, there are plenty of re-sales available, but you will pay a premium for the best units and will inherit a place furished and decorated to someone else's taste.

[Up2U]

"The best buy is a corner unit with a nice view bought off-plan from a reliable company. To get one of these you will have to be quick - they usually sell out within a day or two of coming on the market. You will also have to wait 2-3 years before it's complete."....Hopefully words of wisdom. I purchased at View Taaly #7. Estimated Completion 2008/2009.

DELETED

[ikarus]

re

Thanks for the contributions so far.

As I said perhaps the smart money is on renting.

Do you suppose that real estate websites are an indicator for the buying/renting preferences of expats, as it appears to me that there are more condos for sale than there are to rent.

Perhaps I should ask the expat community if they buy or rent.
Come on guys do you buy or rent and why?

rogered :clown:

I would buy, a condo that is.

Look for reasonable annual maintenance fees (which could be < 10% of what you would throw away on rent) in a project with good management reputation (do the managers live/own there?) in a location that is already overbuilt and should at least stay stable in price. I'd stay away from high rises for 7-8 story projects alreday popular with expats. You should be able to will it to heirs.

'Is not it true that houses much cheaper than (comparable in size) condos? By the way, how much on average?'

ikarus

As regard property prices in Pattaya, if you look at the following link you will be able to compare them yourself.

http://www.fairproperties.com/

rogered

[ikarus]

re

[TrongpaiExpat]

The problem I see in buying property as a retirement home/condo is, do you have the time to recoup on your investment. Even in the West property investment should not be a short term investment, thou in some markets it appears that short time turn around has worked, don't count on it and certainly do not expect it in Thailand.

If you have fixed retirement income, an annuity type monthly income, or some investment with a cash distribution, then just spend what you make every month. Keep a little in reserve for emergencies and live.

There is nothing to save for, your time on this earth is finite.

"Your time on this earth is finite"

How do you know? In all my many days on this earth I've never come across a single person who could say this from personal experience. It's all hear-say. Hedda and the Colonel might still be here well into the next century.

When buying a property, however, the thing to remember is that you might have to sell unexpectedly - because you get ill and want to return home for treatment, because a heavy metal enthusiast or a serial killer moves in next door, whatever. Even in Thailand there's a good chance you'll recoup your money or better, but if losing twenty five per cent of what you paid means devastation, buying property is not worth the risk.

Even in Thailand there's a good chance you'll recoup your money or better, but if losing twenty five per cent of what you paid means devastation, buying property is not worth the risk.
I'd agree with yang2 if all he'd said "in Thailand there's a chance you'll recoup your money". Regrettably he felt he had to go beyond that

The performance of the international property market has proven over and over again that it makes sense to own rather than rent.

Let us consider the issue of whether or not to buy in Thailand in simple terms:

1. In view of property being relatively cheap (by European or US standards), a retiree would hopefully be investing only a relatively small percentage of his total worth in that property

2. By purchasing he has effectively paid upfront for lifetime use of that property, subject only to monthly levy or overheads

3. By renting he is leaving himself open to the ravages of inflation. Truth is we cannot predict long term inflation in emerging or fragile economies but suffice it to say that they are prone to be erratic and inflationary. Take a rental at current prices and escalate it by only 5% per annum - a rental of 5000 baht today would be in excess of 12500 baht in twenty years time!

4. There is every likelihood he would make a profit when selling the property but to take a pessimistic view, it would be unlikely that he would not IN A WORST CASE SCENARIO at least get his money back when selling. Having had use of the property during ownership would more than compensate for non-performance of the investment in such a scenario.

It's so refreshing to hear the voice of experience. Any details of your multifarious property-owning activities in Thailand that you'd care to share with us?

Why not rather counter-argue my points if you have anything valid to input (I numbered them to make it really easy to do so). If you have nothing valid to contribute, why not simply FUCK OFF

"The problem I see in buying property as a retirement home/condo is, do you have the time to recoup on your investment."
"There is nothing to save for, your time on this earth is finite."

Regarding buying a retirement home, I agree with the latter statement, but wonder about the relevance of the first statement. I bought a retirement condo in Jomtien. I do not care if I ever recoup my investment. It's a place for me to live. If I can sell it sometime for a profit and upgrade to something else, that would be a nice bonus, but I didn't buy it as an investment.

Why not rather counter-argue my points if you have anything valid to input (I numbered them to make it really easy to do so). If you have nothing valid to contribute, why not simply FUCK OFF
Better than that, refer to the following. Choose the Thailand link
http://au.geocities.com/homintern/

Or perhaps you prefer to dream on, and think Thailand just like home except the boys talk funny

However here are 3 differences between Thailand and the West
1 The secondary market in housing is small, and in particular many Thais won't buy where they know a non-Thai has lived (not that they're racists, of course)
2 One of the reasons for a small secondary market is that the term "jerry-built" was probably coined in Thailand, and it's a race between the date when the property is sold and the date when it will fall down of its own volition
3 Thai leases tend to be "for life", irrespective of the term spelt out in the lease document. My rent hasn't increased since 1998. One of my neighbours moved in two years before me; his rent hasn't gone up either. That's pretty common. Arguments about rent increases at the inflation rate (or more) are sheer nonsense

If you poke around on Stickman, you'll find a cautionary tale from a Bangkok-based Western realtor. After waxing lyrical about the joys of buying a condominium, he then admits that he's ... actually ... a ... renter
:geek:

[PeterUK]

I bought a retirement condo in Jomtien. I do not care if I ever recoup my investment. It's a place for me to live. If I can sell it sometime for a profit and upgrade to something else, that would be a nice bonus, but I didn't buy it as an investment.

I agree wholeheartedly with bkk gwm's comment. My main reason for buying a condo was the psychological benefit of feeling that I have a home of my own here which I can decorate to my liking etc. It's a much better feeling than living in hotel rooms or rented accommodation. On the economic side, I calculated that the money spent on the purchase of my condo saves me more in unpaid rent than it was earning me in interest sitting in an English bank. And, of course, there is the possibility of capital appreciation over time, though like bkk gwm I am not relying on that.

While Homintern is characteristicly harsh in his assessment of Thai property, Bret1 is certainly wrong in assesrting (point 4) that even in a worst case scenario you'd be very unlucky not to get at least what you paid back.

There have been times when that hasn't even been true of the UK market, but there are factors which make a loss much more likely in Thailand, these include:

1. Much less objective information about the true value of property, making it much more likely people will pay too much. In the UK objective information is easily available and most people get a professional valuation before they buy. How many do in Thailand, and how professional would the valuation be if they did?

2. Periods when supply greatly exceeds demand, particularly when it comes to studios. Lack of space and strict controls on development mean that there is rarely a significant imbalance in the UK.

3. Poor maintenance of some development can make units fall in value. This has happened in the UK too, but the far stronger legal rights of flat (condo) owners there makes it far less common.

4. At Homintern observes, SOME building are badly constructed - though there ARE reliable developers, and people can choose to buy a unit built by one of those.

5. A highly sectionalised secondary market. Farangs are selling to farangs for the most part, and that is a volitile market, subject to changes in Thai laws, exchange rates, destination fashion, and any incident which deters travel - like the Tsunami or the Bali bombing.

As to the cost of renting, Homintern is right that these certainly don't go up annually with inflation. I been renting out a condo for three years and havn't put the price up - and don't intend to. Having a reliable, long term tennant is just too valuable. But if my tennant wants improvements or redecorations he will have to pay extra for those. Perhaps Homintern has a nicer landlord than me, but if not his condo will eventually start to suffer from neglect. And one day the tenancy will just not be renewed, if the amount of the rental get too far out of kilter. Then a new place will be required at whatever are the current prices. So in the long term, inflation will make its impact.

3. Poor maintenance of some development can make units fall in value. This has happened in the UK too, but the far stronger legal rights of flat (condo) owners there makes it far less common.

4. At Homintern observes, SOME building are badly constructed - though there ARE reliable developers, and people can choose to buy a unit built by one of those.

Perhaps Homintern has a nicer landlord than me, but if not his condo will eventually start to suffer from neglect. And one day the tenancy will just not be renewed, if the amount of the rental get too far out of kilter. Then a new place will be required at whatever are the current prices. So in the long term, inflation will make its impact.

From my observations (3) is the norm and as yang2 says later on ("his condo will start to suffer from neglect") the issue is not confined to rent vs. buy. Most property-related experiences in Thailand revolve around on-going management that doesn't care about infrastructure deterioration - and in any event have to deal with a poorly-constructed building in the first place

Anyone who is currently in Bangkok can get a close-up look at what I'm talking about. Enter Silom Soi 6 (in daylight) and walk down to where the UK Mansion guest-house is (I think that's still its name. Anyway, it's where the Soi takes a dog-leg and becomes Surawong Soi Something but we all know it as the Tawan Bar Soi). There's a building being constructed there. You can get really close (but you don't need to). That is typical of Thai building standards. If you feel like putting your money into that sort of thing, then ... Yep, words fail me. I guess you're one of those people who don't care about quality, just that "It's mine" - the syndrome exemplified by PeterUK's post

Just to clarify a point arising in Homintern's post, it is ME the wicked landlord who will neglect to redecorate or improve the interior of the condo I rent out unless the tennant is willing to contribute to the cost by way of an increase in rent. The Condo management keep the building, the gardens and the swimming pool in an excellent state of repair and maintenance - for which they send me a bill each year. The building in question is one of the numerous View Talays. Some people have asked why they don't choose another name for their developments - I think they're up tpo View Talay 8 by now. But if you are the developer of a condo built about ten years ago that is still well managed, well maintained and popular that is a very strong selling point for precisely the reasons Homintern sets out.

Good on ya Brett tell em son ! You make me proud !
Tell Colonel to get stuffed.Mate your right,

[ikarus]

re

All of the points made in my longer posing above could apply to houses except the one about maintenance. And if you buy a house there are two substantial additional problems.

1. The fact that foreigners are not allowed to own property (with a couple of very monor exceptions for the super rich which are unlikely to apply to members of this board). There are ways around the ban, but the Thai government is well aware of these and just as Tax authorities periodically tighten the rules to trap tax avoiders, so the Thai Government might tighten the rules to trap foreigners circumventing their ban on property ownership. There is a surprsingly large core of Thais who deeply resent foreigners buying property of any kind, but especially houses/land. A future Thai government might well wish to pander to this nationalism and house-owning foreigners would be a relatively easy target. If you do buy a house, I think the 30 plus 30 year lease is probably the safest bet, since this is explicitly legal.

2. Security is a much bigger problem with Houses.

[TrongpaiExpat]

Good points yang, yet you still advocate buying?


There is a surprsingly large core of Thais who deeply resent foreigners buying property of any kind, but especially houses/land.

Look at the national anthem:

Thailand is the unity of Thai blood and body.
The whole country belongs to the Thai people, maintaining thus far for the Thai. All Thais intend to unite together.
Thais love peace but do not fear to fight.
They will never let anyone threaten their independence.
They will sacrifice every drop of their blood to contribute to the nation, will serve their country with pride and prestige full of victory.

[ikarus]

re

I think the risk of interferance from a Thai government for Condo owners or 30 year leasees is close to nil. There is some possibility they may stop foreigners buying condos at some point in the future - which would have a downward effect on property values - but that is all. Thailand could well end up facing economic sanctions if it started directly depriving people of their lawful property.

I don't think even houses would ever actually be expropriated. But onorous conditions could be placed on companies owning residential property - conditions which foreigners might find it costly, difficult or impossible to meet. They would then face a forced sale to a Thai only market with, probably, a tight time limit to comply with. Not a formula for achieving a fair market price.

The question of buying property (a condo or house) in Thailand versus not buying (renting) is simply a matter that should be evaluated individually in terms of personal risk. If you would be investing a significant portion of your life savings in that real estate (high priced or low savings) then you are taking taking too great risks, as the risks (so many mentioned above) are in fact generally higher in Thailand than they would be in most western locations. If you had to sell quickly, for any reason, at a wrong time then you could lose a significant amount of badly needed money. Risk intolerant? Then rent! If you are risk tolerant, that is you could easily hold your condo, or rent it, etc. should sudden adverse market or life changes happen, then you are significantly lowering chances of disastrous financial loss, and it is a matter of whether you want to throw money away on rent, or probably break even, at least, when you sell.

Then you must lower risks. Good location! Jomtien sounds like a good location that will always be in demand, save for overbuilding going on when you decide to sell or a tsunami washing the beach away. If the owner/managers live in a condo project then there is a good chance they don't think it will collapse in 10 years. But don't believe in witchcraft, I think Thais will buy a condo if a farang lived in it, they only prefer NEW things as a matter of fact. The most significant risk IMO is overbuilding. Public review of developments in Thailand is nonexistent. If the property is owned then the owner can do anything he wants. The rich and powerful in Thailand have there eyes on major projects everywhere there is a potential for profit. I know of many people that lost significant amounts of money on Sukhumvit condos with the combination of high rise overbuilding in that area and the collapse of the baht in the financial crisis of the 90's. I do contend that such symptoms that led to that crisis are being repeated today! Choose a wise location and limit other risk factors and, if necessary, HOLD on.

I know of many people that lost significant amounts of money on Sukhumvit condos with the combination of high rise overbuilding in that area and the collapse of the baht in the financial crisis of the 90's. I do contend that such symptoms that led to that crisis are being repeated today!
Amen to that. None of the ASEAN economies with the exception of Singapore and, up to a point, Malaysia, took any of the hard decisions that are necessary for economic restructuring following the 1997 downturn. It was mostly posturing about how hard done by they were, as the result of wicked currency speculators, rather than recognising that their own self-inflicted weaknesses gave currency speculators an opportunity to profit - as a by-product of the main game, which was over-borrowing and property speculation. The same problems are evident today

have you considered buying an apartment---------after all condos are only glorified bed-sits , do you want to live in one room for rest of your days,
I don't know but may be apartments are as easy to buy and own out right as condos are ,

I would of thought that an apartment would be easier to sell should the need arise , there are some real nice apartment blocks being constructed on the jomtien beach front just now, and on the jomtien pattaya road,Pattaya is a fast changing Market -

---Actually one has to look around and clearly see there is a massive over supply of purpose built homes -condos and apartments -------remember the last property collapse in Thailand in 98 , it could all end in tears again,

i did my sums 2 years ago and i rent-----iv seen so many ex pats had their fingers burned ,--yes international prices are on the up and up but buyer beware ,

It appears to me that real estate agents 'lump' condos and apartments together under the heading of condo's. Real estate listings offer 2, 3 and more bedroomed properties under the heading of condo's.

So what is the accepted definition of a condo as opposed to an apartment?

To answer your question S.S.S. Yes, I have looked at buying an apartment. However I am having second thoughts about buying or renting in Pattaya/Jomtien - One of the reasons is who wants to be short of water. I think it was Boxer who suggested that the rainy season had not filled the reservoirs.

rogered

Perhaps it's merely an American definition, but "condominium" is a form of ownership in a multi-residential-unit building. There are studio condos, 1-bedroom condos, 2-bedroom condos, etc. An American apartment is a rental unit in a multi-residential-unit building.

I hadn't realized the definition would be different in the UK, but apparently it is?

Interesting, I thought that apartments, vs. houses and condos and other owned property, were the same in the US, UK and Thailand, except maybe that apartments in Thailand come mostly furnished. Can anyone tell me how and why someone would buy an apartment in the UK?

Homintern please elaborate, why wont a Thai buy a house a non Thai has lived in?

I hadn't realized the definition would be different in the UK, but apparently it is?

According to the OED condominium is the joint control of a States affairs by other States - so that'd be Vanuatu before 1980, as I recollect.

or

US a building containing *flats that are individually owned.


Apartment - a suite of rooms usu. furnished and rented ... 3 US a flat

so that's all agreed, they're all just flats.

In my last comment on this thread I questioned whether or not I would like to live in Pattaya/Jomtien with a shortage of water.

In my home here in the UK we have just had a 24 hour period of no water. We have been reaasured by the water authority that the water will be 'back on' within the next 12 hours - The main water pump broke down.

I thought it might have had something to do with the electric cable pole directly outside of the pumping station. :clown:

rogered

Homintern please elaborate, why wont a Thai buy a house a non Thai has lived in?
For the same reason that older Japanese property owners in Tokyo either won't rent accommodation to Westerners or set the rent at 10 times what it would be for a Japanese - racism

There are definite perceptions amongst sectors of the Thai population about second hand places. A lot of Thais simply don't want to buy second hand, period. And the fact that a farang may have lived there is a negative perception to many Thais. Yeah, really! The superstitious nature of the locals also means that if one of any number of events happen, then suddenly your property is no longer somewhere they would buy.