# Property purchase



## morrisman

Looking for advice. I have been offered an apartment in patong phuket for 1.5 million baht. It would be on a lease basis 30+30+30. Rental income would be 15,000B a month with the company who presently owns it taking 50% of this. Anyone have an idea on wether this is a good deal or not? Would renting be a better option? Thanks


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## MichelleAlison

Hi Morrisman,

Welcome to the forum. I hope there is somebody out there a bit better at figures than I am.

Michelle


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## kaz101

Hi Morrisman, 

Is this your first time buying property abroad?
What is your goal with buying this property? 
What are your other costs for the property?

I ask why you want to buy the property because people buy property for different reasons 

excess money
monthly income
long term growth so money later rather than money now
to move into it at a later date

Know why you are buying the property and then you can see whether it's a good deal or not.

Research the area online to see whether this is a good price or not and whether that's a good rental return. 

What sort of mortgage will you get (if you get one)?
What % loan to value are you allowed since that will determine your deposit of you are getting a mortgage? For example when we lived in the UK but were buying Australia banks would only loan us up to 70% of the value of the property and we had to find the other 30%. 

I don't know the area and I don't know what you are looking to do but I hope that helps. 

Regards,
Karen


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## kaz101

Hi Morrisman, 

I just read your post again and now I'm not sure whether you want to live in it or to rent it out? You said rental income and those are words used by people usually looking to invest 

Regards,
Karen


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## morrisman

*property*



kaz101 said:


> Hi Morrisman,
> 
> I just read your post again and now I'm not sure whether you want to live in it or to rent it out? You said rental income and those are words used by people usually looking to invest
> 
> Regards,
> Karen


Hi Karen- Many thanks for your answer to my post. My primary reason for property in this particular place is for retirement and investment. The problem with buying in Thailand seems to be that they could always change the rules but I guess that applies to most places. Whilst this does appear on the surface to be a good deal I am not going to rush into it until I have more information. An alternative to buying is to rent an apartment which may be a better way to go because if things do collapse on you your financial loss will be a lot less. Thanks again.


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## kaz101

morrisman said:


> An alternative to buying is to rent an apartment which may be a better way to go because if things do collapse on you your financial loss will be a lot less. Thanks again.


Hi Morrisman, 

Are you saying that you would rent an apartment and then rent it out to someone else? Or rent it out to live in?  Sorry I'm confused since you said this is for retirement and investment.... 

Regards,
Karen


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## synthia

You need a financial advisor and a lawyer who know something about international property investment. You also need to be sure that the property management company is honest and will report all the income, see that the property is maintained properly, and actually do something for their 50 per cent. Property managers in the US usually take one month's rent plus 10 per cent. If the apartment is going to be rented out on a short term basis, you need more protection against damages. Will all the wear and tear be on you? And to see what per cent condo managers get for short term rentals in the US and Canada, contact some beach and ski resorts that sell condos and rent them out when you aren't using them, and see what they take.

Also, have you been there and seen the place? Lately Thailand has been far more prone to changing rules on people than most places.


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## morrisman

*advice*



kaz101 said:


> Hi Morrisman,
> 
> Are you saying that you would rent an apartment and then rent it out to someone else? Or rent it out to live in? Sorry I'm confused since you said this is for retirement and investment....
> 
> Regards,
> Karen


Hi Karen- This would be for eventual retirement and when I am not there the apartment would be rented out, which would be the investment part of the deal. Also property prices are rising by 20% per year so it seems like a good investment.


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## morrisman

synthia said:


> You need a financial advisor and a lawyer who know something about international property investment. You also need to be sure that the property management company is honest and will report all the income, see that the property is maintained properly, and actually do something for their 50 per cent. Property managers in the US usually take one month's rent plus 10 per cent. If the apartment is going to be rented out on a short term basis, you need more protection against damages. Will all the wear and tear be on you? And to see what per cent condo managers get for short term rentals in the US and Canada, contact some beach and ski resorts that sell condos and rent them out when you aren't using them, and see what they take.
> 
> Also, have you been there and seen the place? Lately Thailand has been far more prone to changing rules on people than most places.


Yes I have viewed the place and the prices in the area are increasing by 20% per year so it seems to be a good investment. But I will cretainly do more investigation before committing to anything Thanks


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## kaz101

morrisman said:


> Hi Karen- This would be for eventual retirement and when I am not there the apartment would be rented out, which would be the investment part of the deal. Also property prices are rising by 20% per year so it seems like a good investment.


Okay so now I understand  So really you do want to buy it rather than anything else to get the rise in equity.

Just check that the rental income covers most if not all of the costs since costs can change (and always up and never down  ) and you wouldn't want to lose it because of that. 

I'm a cash flow investor rather than an equity investor since I like my money back now rather than later . It hasn't always worked out that way though. 
Also bear in mind any currency fluctuations. 

Good luck and let us know what you decide.

Regards,
Karen


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## OzDoug64

I have been told on a few occasions by condo owners from Australia that before purchasing in Thailand, do the following:

1/ Spend a few weeks in the town were you are looking at buying.
2/ Visit different real estate offices in that town especially the small ones.
3/ NEVER purchase online / without inspection.

Reason:

When you purchase or enquire online you will be paying up to double the real price of the condo. Bigger RE offices know our dollar buys a lot of property so try to put one over us, even farang consultants.

You will be more amazed at the real price once you look around, yes there are condo's available for @ $30 - $50k around Chiang Mai.

Be very very careful and seek a trusted lawyer (if there is one)

Make sure you don't stick your meat where you keep your veges or you'll lose your condo in the end


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## synthia

You also will suffer a major loss if there is a correction in the value of the baht or if the dollar rallies. The former is more likely. If you are going to carry a mortgage and pay fees in baht, you will be hurting if the baht continues to rise as your payments will go up.

While I was in Thailand, the baht rose from around 37 baht to the dollar to, briefly, 30 baht to the dollar. It was a combination of the falling dollar and the rising baht. That's a 19 per cent change, and it only took a couple of months.

You should not invest any money you can't afford to walk away from.


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