Property purchase by a Newbie

[damien7147]

Hi there from a Newbie, although have been reading posts for some time- loads of great info and some cracking stories on the Bangla nightlife!! Ive been out to Patong a few times and am considering a house/appt purchase on the island. Can anyone give me advice (pref based on their own experiences) on agents and legal bods to speak to (pref based in patong). Cheers.

[LivinLOS]

I know most of the Islands agents.. Most (but not all) are straigh as far as the indusrty goes so its more a case of finding the property thats right for you rather than a single agent..

If your here I can introduce you to my mate who is involved with one of the bigger agencies.. Very good gy to work with.

Do you have specific idea (condo, house, seaview, quiet or party, etc) and a approx budget to narrow it down a bit ??

[jimholio]

Isnt it extremely overpriced to go trough these realestate agents?

I dont know alot about it, but i can imagine their fee's are high.

[LivinLOS]

Seller pays the fees..

Though of course those are usually passed on..

[jimholio]

But hey, its just basic math realy. Western real estate agents, with western buyers, paying western prices.

Doesnt matter what it realy costs. Thats one part of the exploitation that i dont realy like.

[LivinLOS]

I dont get you.. Same prices for anyone..

You think Thais make better deals to farangs than farangs do ?? You think Thais run professional and punctual systems and general business practices better than farangs do ?? You think Thais are less likely to sell a bad piece of land or one with bent land titles or miss represented vital facts like height from sea level than farangs do ??

All 3 I strongly dissagree.. Finding good land is much more than just finding a plot.. Due dilligence, legal research, land title build ability (here we have a huge selection of 'types' of land deeds), history of land title and any land title conversion, access rights, plot edge definitions and true size (often not what the seller is claiming) etc etc etc.. The market is a bit of a minefield and one where having a good trustable experienced agent is often vital if you are not very up on how land titles work (eg knowing the difference between a Nor Sor Gor or a Nor Sor Sam Gor) and the subtle differences between them which effect thier value.

Many Thais are trying to sell land and have no interest or responsibility to stand behind the deal afterwards so dont care about selling a bad title, many of the western agents that have built a reputation on the island would not risk losing thier reputation by selling bad or miss represented deeds.

Its not a simple issue, its not 'basic math' its a legally complex issue transacted in a language that often the buyer cannot read or write or understand and with no real idea on even the legalities and loopholes of what they are doing.

[jimholio]

Originally Posted by LivinLOS

I dont get you.. Same prices for anyone..

You think Thais make better deals to farangs than farangs do ?? You think Thais run professional and punctual systems and general business practices better than farangs do ?? You think Thais are less likely to sell a bad piece of land or one with bent land titles or miss represented vital facts like height from sea level than farangs do ??

All 3 I strongly dissagree.. Finding good land is much more than just finding a plot.. Due dilligence, legal research, land title build ability (here we have a huge selection of 'types' of land deeds), history of land title and any land title conversion, access rights, plot edge definitions and true size (often not what the seller is claiming) etc etc etc.. The market is a bit of a minefield and one where having a good trustable experienced agent is often vital if you are not very up on how land titles work (eg knowing the difference between a Nor Sor Gor or a Nor Sor Sam Gor) and the subtle differences between them which effect thier value.

Many Thais are trying to sell land and have no interest or responsibility to stand behind the deal afterwards so dont care about selling a bad title, many of the western agents that have built a reputation on the island would not risk losing thier reputation by selling bad or miss represented deeds.

Its not a simple issue, its not 'basic math' its a legally complex issue transacted in a language that often the buyer cannot read or write or understand and with no real idea on even the legalities and loopholes of what they are doing.

Mate it was just me guessing, because thats how i figured it would work. I said before i dont realy know anything about it.

But am i wrong if i say that alot of western investors buy large plots of land around Thailand, build their gated communities and then sell the houses in it massively overpriced, compared to what it realy cost them to build in the first place? If i am wrong i appologize.

Now, wether its cheaper to buy from a farang or thai i dont know. That was just guesswork.

----

We had an expo here a couple of weeks back where alot of the Swedish Brokers were showing their houses for sale down there, and it was not cheap thats for sure, not something the average thai can buy to have as a summer house thats for sure.

[LivinLOS]

Well partially but again a massive over simplification..

Are Thai houses cheaper than western build houses ?? Yes.. The thing is you have to have a look at Thai build quality and materials to understand why.. I have looked at a lot of property as was semi involved with agent work for a while.. I have never seen a 'thai builder' produce a property to quality western standards. With the best will in the world they simply dont understand the requirements or level of building design we consider normal let alone catering to the mega rich's luxury end of the scale..

Typical Thai designed 'western' houses have 2 plug sockets for an entire front room.. They rarely consider things like access ways to roof or crawl spaces.. Only a few years ago putting guttering around a roof was considered an amazing invention. Sometimes they will run power cabling on the outside of plaster walls instead of burying it and even if it is buried using conduit in case of future expansion or replacement is still something they need to be pushed to. Thai builders will economize on every item like trip boxes and cheaper cabling so that electronics pop and trip, cheap dangerous plug sockets etc, they dont ground the elctronics system so it often has whats known as a hot earth (you get shocks when you touch anything electric).. They dont put enough foundation in for the weight of houses that are designed (hence they crack and move) as they are not designed by engineering principles or load calculations but by 'that will probably be enough' guesswork.. To be fair they have gone in a single generation from making wooden shacks running on rainwater to massive villas where the western rich owners expect imported marble to have seamless joints and other things unseen here until recent years. 30 years ago this island only had a couple of paved roads, no electricity, etc, where would a builder of that generation gain an understanding of western design requirements ?? The actual tradecraft can be achieved but the design and build oversight must be looked at really closely.. Add in a mai pen rai attitude to everything and theres lots of badly built properties that wont last as long as expected.

I am not a fan of the gated community approach (cause I dont like neighbours too close and they generally maximize the land investment) but in thier defence they gernerally have more thought to water systems, the power and phone cables are buried underground to look more appealing, there is security for an owner that may not live year round, its rental return may be guaranteed % returns per year in the initial purchase price.. Essentially there is another level of management taking care of communual areas and municipal problems, full time gardeners and handymen etc available onsite.

The market is very broad and of course you can get a 2 bed thai built little house out down rawai for 2 mil or under and yet pay 12 - 15 for a 2 bed apartment or similar size living space in a western development at both extremes. One has simple domestic sourced component parts and problems and the other has imported german taps and bathware, plug sockets and electrical components, corner baths and jacuzzi, quality tiling etc..

As someone who has built houses a few times and been in civils construction in the past the building game here is a shambles and some people like to pay to attempt to not have future headaches. Even many of the (expensive) villas I see here dont look to me like they will have too much of a lifespan..

[jimholio]

Right, but 2-15 million thats quite a step. Even if the 2 million house would be poorly built, im sure the 15 million house aint 13 million baht better or is it?

So there's the question. Does it cost 13 million more to build a house of western standard. Obviously someone along the lines here are making LOADS of cash then? And who is that? The company who bought the land, built the house and use their own real estate agents to sell it? Or is it the guy who they bought the land from? Its obviously not the workers since they are practicly free. And neither is it the material even tho that can cost a bit. Ofcourse then there are the VVS and electrics etc. But surely that is not the main money grabber either is it?

I mean isnt it quite obvious, if it wasnt good money, then there wouldnt be such a huge western interest in this?

[LivinLOS]

Your missing the point though..

2 mil gets (for arguments sake) a Thai house, next to a back road, round a bit of Rawai..

15 mil gets (in this same arguments sake) an apartment in a 5* resort complex around the Bang Tao or Surin beaches, with a view of the western ocean and setting sun, marble bathrooms, jacuzzi and a bathroom that costs by itself as much as a Thai house complete does upcountry. You get tennis courts and gym facilities, swimming pools etc, you get security on the gates, gardeners, manicured communual areas, maybe onsite resturants etc.. You get holiday rental management that offsets its purchase costs..

Many of your posts seem to emphasise the costs of everything and the value of nothing (a english saying, I dont know if you have that in Swedish) rather than seeing that for some people value is not purely a monetary consideration. Some people place far more value in the lifestyle choice of having the amienties than the money differential.. Same as some people enjoy a 1000 baht meal over 20 baht somtam and sticky rice, they both fill you up but cost a vast price difference, that doesnt make the choice to have a 1000 baht meal any better or worse than 20 baht somtam.

[LivinLOS]

Also to an@lyse where the money goes..

I am quoting 2 very extreme end of the market 15mil for an apartment really would have to be within one of the super high end 5* resort places.. 8 mil is still a expensive western luxury apartment.

So lets look at the cost of seaview land.. Finding seaview land at <10 mil per rai on the western side of the island from Bang Tao to Kata (the desirable bits) is not easy.. 15 - 20 mil would be more like what I hear much of that and the real millionaires pads on the cliff edges with totally unobstructed views or beach frontage are often much more like 20 - 40 mil / rai.. Insane money to me but it doesnt stop it being sold.. So the actual ground to build it on is already approx a 10 fold difference.

The Thai structure might have a build cost of 8 - 10k per sqm.. 100sqm house with a build cost of 1 million. That build quality will be basic as hell.. A bathroom that has no bath just a sloping floor shower area and very basic white goods.. Kitchen will just be a tiled flat surface and a built in gas burner hob, no oven etc as Thais dont oven cook.

You can build nice western build quality for 20k a sqm.. Thats nice but its not flash, granite worktops, ok tiles and ceramics but this isnt talking the upper end of the market. It will however have an OK usable bathroom with all a middle class Euro house would have and a kitchen with some form of ovens etc..

The real rich end of the market will have jacuzzi baths (think 100 - 200k per bath.. Teka or other imported german / italian etc kitchen, domestic or preferably imported marble tops.. These pads are not just an apartment but very well appointed places, some of Phukets residents are very well heeled.. What these cost per sqm is very much down to design considerations but its easy to get this up high if you have a taste for marble and teak etc..

Also if a Thai is getting some land and building a house and investing 1.5 mil to sell at 2 mil I am sure you dont expect a overseas investor to go to such greater workloads (imported items, quality control, interior design, exterior landscaping, creating internal roads and street lighting, sewage and other utility processing.. None of which is done on a Thai box house) and only make 500k when thier investment is 10x greater ?? Of course it is likely that it would be % based ?? So if a thai makes 25% markup on this ficticious house that would mean the question is more like is the land and development cost of a luxury apartment still 66 - 75% of its costs ?? I would think they are about in line yes.

The other aspect to consider is that the really wealthy who can afford a holiday apartment in a resort dont want to waste thier valuable time dealing with builders and checking every stage of a build.. Thier time is better spent delegating that task and using it to generate more money or enjoy time they have.

[richie22]

Originally Posted by jimholio

Right, but 2-15 million thats quite a step. Even if the 2 million house would be poorly built, im sure the 15 million house aint 13 million baht better or is it?

So there's the question. Does it cost 13 million more to build a house of western standard. Obviously someone along the lines here are making LOADS of cash then? And who is that? The company who bought the land, built the house and use their own real estate agents to sell it? Or is it the guy who they bought the land from? Its obviously not the workers since they are practicly free. And neither is it the material even tho that can cost a bit. Ofcourse then there are the VVS and electrics etc. But surely that is not the main money grabber either is it?

I mean isnt it quite obvious, if it wasnt good money, then there wouldnt be such a huge western interest in this?

I am in the process of building a couple of villa's at the moment and I could build a Thai style house for about 1.5 to 2 mill.Thats if I wanted 7cm single block walls,no insulation,single phase electricity,no kitchen and a corrugated concrete roof.But when you want to build a good sized villa with double or triple block walls,three phase electricty,western kitchen,clay roof tiles ect ect
oh and a swimming pool + the price of your land ,you getting into the region of 10 mill(maybe cheaper depending on the price you pay for land)
I have priced nearly every item of building material in the last few months( so I can tell if I am being ripped off with my building quotes) and believe me materials are not cheap on Phuket.
It has taken me six months to find good reliable builder who has given a build time of 7 to 8 months. It could be two years before I am able to sell them at lets say 15mill. I don't think that is vast profit for 2 years of headaches,capital outlay with no income(best to be here on site when they are building)
If any one is thinking of building or buying property my advice is to FIRST get a good lawyer.I have a brilliant one who has saved me loads of hassle and money.She just seems to know all the right people to get things done.
If anyone wants her phone number P.M me

[jimholio]

Ok, i was wrong. Sorry.

I just cant see why anyone would want to be in this market then if the money isnt good.

[LivinLOS]

Well the money is good for Thailand.. And its something that a farang with some biz sense and organisation skills can do legally and break into the market.. We often have funds to fund it that a Thai builder wont have and a better picture of what is really desired.

Quite frankly there are very few Thais that can trully understand the kind of quality and planning for really high end western purchasers, thats changing but its still something that an average westerner will have a better perspective on as they will have seen that kind of quality building..

Like try and get a Thai home theater and automation expert to build a projection and or media distribution system into a million dollar villa.. They just have never seen these kind of control systems yet pretty much any large American town will have a HT installer and contacts with automation / crestron programmers for lighting control and media distribution etc.. Thats taking it one step further but 5 or 10 years ago the same could be said for the mega villa or really 5* construction markets.

Yes theres money in it and yes its much more money than an normal Thai would make but then its not something thats within most Thais level of experience. Thats a bad generalization and its of course not true for everyone but its mostly true.

[Thin White Duke]

Hi Richie/LiL

Thanks 4 the great info.

Just out of interest,I noticed in Dec that the Villa's built up on the rocks on the left if you are heading for Kamala, just past Baan Rim Pa and Da Maurizio ,were being renovated.I guess they were hit by the Tsunami.

Any idea what they might sell for?

I presume they are top of the range?

They looked really great,but I was wondering if they would reach their top value after being so devastated and who might risk another wave,as I figure they are pricey?

Cheers in advance

Duke

[LivinLOS]

Yes high end values there..

If you mean at the north end of Kalim beach then the house now completed recognizable as the white cube (1st one as you get to the new villas) was asking 16m for the broken shell.. I think real world sale price was probably 12 - 13 mil and renovations another 4 depending on how nice they did it (needed kitchen bathroom and everything redone.. It was just the skin)..

I looked at it myself and would have floated an 8m bid due to location but the idea was laughed down.. it was tiny inside.. and close to the road.. Considered it for a $$ project but wouldnt like the house as the road gets busier and busier.. Also as it owns no garden and people can walk right up to your beachside windows its not very secure... The ones just past it (where phuketland had an office) are much larger and longer.. But have to assume we are talking 30m plus for those possibly 50 if the owners are feeling nuts..

If you mean just at the Baan Rim Pa 'hump' one of the structures there was after 70m baht asking.. Could be converted into a couple of apartments and or renting rooms to give an owners level and income but really really high.. Patong beach front though !!

[Thin White Duke]

LiL,appreciate your answer on this and various other topics,I was referring to the 'white cube' , A-frames if I remember correctly.It's nice to get a figure and compare it to something else,somewhere else.I quite liked these,but hadn't really thought about the busy road.

[LivinLOS]

I looked at it seriously as I figured it was flippable and there was a fast couple of million for the work and investment.. When I looked at how small the interior was and sat there for a couple of hours to watch the world go by and get a feel for the location the road was a real issue for me.. If it was a bit bigger I could have seen a bit more value but as it was it was tough to see it as being risk free..

Then again how much Kalim beachfront is for sale.. None !!!

[Thin White Duke]

I first noticed it a few years ago and was attracted by the entrance but most especially the location overlooking the sea.I never thought about the road or security.

This year as I was checking out all the damage on the sea-front from the Tsunami,I saw that they had all been wiped out.I couldn't resist as I could see it was under reconstruction,so I walked down and back up over the rocks from the sea-side......and I was impressed.Especially the larger one's further down, where they where putting in or repairing a pool.I couldn't really see inside as I was worried about being on private property without permission,but I saw enough through a tinted window to see a great chill-out room overlooking the ocean.........dream property in my opinion(from the little I saw)..........and a b1tch to get over the rocks on the other side and up to the road.

I was wondering who the owners were,Thai or foreign and what a nightmare it must have been to walk into all the devastation.

[shark1963]

Originally Posted by LivinLOS

Also to an@lyse where the money goes..

So lets look at the cost of seaview land.. Finding seaview land at <10 mil per rai on the western side of the island from Bang Tao to Kata (the desirable bits) is not easy.. 15 - 20 mil would be more like what I hear much of that and the real millionaires pads on the cliff edges with totally unobstructed views or beach frontage are often much more like 20 - 40 mil / rai.. Insane money to me but it doesnt stop it being sold.. So the actual ground to build it on is already approx a 10 fold difference.

Hey LIL, i agree with you at the construction costs of the houses and of course it makes a big difference if you areusing expensive materials or not. But the prices for the plots just look very expensive to me anyway. I have seens plots going up to 70 mill per rai and if compare those prices to german prices you will get at least the same plotsize for less money in the best areas and most expensive areas in germany. Looking to the developing costs i cant believe they would be as high in thailand as in germany too. So someone is making a lot of money. By doing a research in the thai property market i also have the impression that buying an house is cheaper than buying a plot and building a house on it. So where is the difference coming from? And i dont speak about old houses. There is a ressort built up in phuket i found and they offer the house up to 20-25 mill with one rai and about 600sqm living space , pool included and seaview. Looking at this offer the price seems to be really fair. Of course i have not a look insight and how they are in the quality

[LivinLOS]

Land values really subjective things.. I thought some plots at 2 million a rai (only 1600 sqm) were expensive when I came here thinking it is a developing country after all.. 50k Eur back then.. Since then I watched it double to 4m and thought it was really expensive.. Now its easily 8m.. So whose the mug ?? Could have made easy millions but how long can it keep doubling every couple of years ??

Phuket is not Thailand in general.. Looking at Phuket and giving it 3rd world status just doesnt take into account the influx of farangs (and rich asians) who like it for its lifestyle and retirement potential with no consideration as to its Thailand location.. People who live from villa to golf course to country club to sailboat and whose connection to Thailand runs to trying to find a good maid and driver. We have had 20 years of global prosperity through 80's and 90's and all those baby boomers that got lucky somehow through that period see the lifestyle choices of place like Phuket and just throw values madly out of whack.

Yes beachfront or cliff edge plots are insane money but theres an increasing amount of millionaires in the world and a decreasing amount of sunset facing beachfront within 45 mins of an international airport in relatively stable regions thats available. I suspect that land rush will continue and Phuket will keep developing until its over developed and prohibitively rich / expensive for many low end tourists.. The market will expand round krabi or up to other countries and places but Phuket has certain amienties like airports and golf that really suits the Singapore / Hong Kong / Etc retirement community.

Yes you could buy cheaper land in Germany or England or many places but if your wealthy can you buy the same quality of life there that money can buy you here.. What would running a 5 bed villa with pool maid and gardeners etc cost back in germany ?? How many days a year would I want to dive in my pool when I woke early in the morning ?? is it within 1/2 hour of a golf course AND a place to moor or rent a sailboat ??

Will Phuket remain a tourist island or will it become a more expat developed place ?? Will water systems develop to cope with this future ?? Will they over develop and ruin the environment or will they manage to create a high end Hawaii preservation of its natural beauty (I doubt it) ??

I have stopped being surprised what people pay for land any more and I guess that must be 10x for the Phuket resident Thais.. My GF's family owned all of Nai Yang beach area and sold it the first time anyone offered them 50k a rai for it, if they had held it they would be millionaires by now.. You still get nice plots up there at prices that are much better than the developed / popular areas of the island.