Buying a house

[Paddy151]

Hi all,

I've been travellng to LOS pretty regularly over the last 10 years and recently been thinking about getting my own place. I wouldn't try to rent it but would keep it for my own use when I'm in LOS.

Would like to know what others experiences are of purchasing Condo's/houses in Phuket and whether it has been a positive or negative thing for them.


Cheers

[LivinLOS]

How much use would you need to get out of it to make it cost effective to tie up that money when it could be invested elsewhere.

I live here full time and on my villa the owner makes a 3% rental return on its value. while my money is outside of Thailand doing a damn site better than 3% !! In purely cost benefit terms its not a sound financial idea for my situation.

Of course theres lots of reasons for home ownership beyond purely finance but thats my 2 satang.

[alibaba]

I've owned a condo in Patong for the last 6 years.
I also don't rent it out.
I visit 4 or 5 times a year. When I leave i lock the door and when i return i open up and it's just as i left it. All my clothes in the w/drobe, my own clean mattress's on the beds etc.
Quick trip to Lotus to get some supplies in and i'm set up for my break.
if i get fed up eating out i can cook for myself and even for my lady. Believe me they really appreciate that.
No problems about is it guest friendly etc.
After the initial outlay to buy it, all it costs is 1200 bht. a month for management, and standing charge for water and electric. plus cost of any water / electric i use while i'm in residence.
While i'm there some nights i don't feel like going out. no problem, i have my tv. dvd. stereo system etc. Not like staying in some grubby hotel room.
Also when i finally retire and move to LOS. which is some time this year, it's all ready to move into

[LivinLOS]

But you dont need to stay in a grubby old room..

Service apartments 1 bed are 30k.. Nicely furnished and pool etc.. The kalim place is there at 40k for a 2 bed and nicer than most high value condos and direct / near the beach etc.. so say a place costs 2 mil to buy (cheap most nice ones are more like 4 or so) and that money could get 10% invested thats 200k per year.

Well at 30k per month or even 40k you would need to make 5 - 7 months stay in a year to make the cost up.. I think you could rent a really nice condo long term at 20k so nearly a years worth of rent to justfy the investment.. For part time use I just dont see it making financial sense.

Of course many of the benefits are not financial.. Part of stepping into being more permanent etc.

[alibaba]

Originally Posted by LivinLOS

But you dont need to stay in a grubby old room..

Service apartments 1 bed are 30k.. Nicely furnished and pool etc.. The kalim place is there at 40k for a 2 bed and nicer than most high value condos and direct / near the beach etc.. so say a place costs 2 mil to buy (cheap most nice ones are more like 4 or so) and that money could get 10% invested thats 200k per year.

Well at 30k per month or even 40k you would need to make 5 - 7 months stay in a year to make the cost up.. I think you could rent a really nice condo long term at 20k so nearly a years worth of rent to justfy the investment.. For part time use I just dont see it making financial sense.

Of course many of the benefits are not financial.. Part of stepping into being more permanent etc.

I see what your saying LIL and can understand anyone who prefers going down that track.
For me the financial consideration dosn't really come into it at this stage. My condo is worth about 3 million now which i could invest in the UK. and get around 5% after tax.
For me i like to own my own place with all my own contents. Plus, it's all part of the master plan to move to LOS. permanently. Who knows, when i've been there a while i may decide to sell it and rent a place and release that capital.

[Paddy151]

Thanks guys, I appreciate the different views. I have some spare cash but could probably only go to 4 mil or so as I wouldn't want to tie up all my capital. I will give the opportunity cost angle some serious consideration.

[Dodger]

But Lil you are not factoring in any capital growth on the the value of the apartment. We live in a 3 bed apartment in Kamala, 18 months ago my friend agreed to purchase off plan, he got his keys this year, original purchase price 4 mil, one opposite exactly the same sold for 6.38mil, 50+% growth 18 months. Expected growth over next few years is estimated at 25% per year, okay if that is halved then 10% is still better than a standard investment vehicle, plus as LOS sayes he likes the fact of his own stuff. If you are near retirment then buying I would have thought is a good option but using the words of my wise old mate (LIL) do not invest more than you can walk away from.

[LivinLOS]

Agreed but people seem to think that growth is a given.. This is not the west and theres been a massive property boom.

As the guys who bought pre 97 and watched the baht collapse 50% overnight how they felt.. I also believe that a housing downturn / crash is immenent globally but am unsure how that will effect tourist areas and second homes. Theres a lot of rumbling that Thailand is ripe for another 97 like event with deficits and oil price issues hitting hard here. I personally dont see a sudden panic like 97 but its not impossible.

It should also be pointed out that off plan purchases and pre payment are done to allow the developer funds with which to develop and always have a premium (due to higher risk of not getting what you think) over fully build price. To see that as pure asset appreciation is not really exposing the full risk profile. I know lots of off plan purchases that didnt get finished leaving law suits and court cases behind them.

However I agree I am not taking possible appreciation into the account but I am also not taking in possible depreciation in.. Thailand is not very transparent economy and its banking is typically very unstable and shaky. A real banking collapse would be pretty easy (the whole system nearly went down in 97)..