loner w/a boner Posted January 10, 2007 Report Share Posted January 10, 2007 I am considering buying rental houses for the purposes of financing my retirement. I have read an article on this website from Leslie Wright - "buying condohouse in Thai" and see a lot of what was said. I'd like to hear from anyone who has/is actually doing it. Goal: to provide monthly income when I reach 65 (in about 20 years). Current positive monthly cash flow is optional. I know the basics of rental properties and real estate. Hidden expenses, landlord headaches, location, location, location. I know a little about Thai real estate and mortgage lending too. Does/has anyone here actually done this? Can you tell me three things: 1. What has your overall experience been? 2. Any special warnings, caveats, or tips? 3. On the whole, would you recommend BKK rental property ownership in general? Thanks for your attention. Link to comment Share on other sites More sharing options...
junglesoup Posted January 10, 2007 Report Share Posted January 10, 2007 do you mean houses or condos? I dont know a whole lot but from what I gather on here and other sites nad reading up, buying a house has got too many hassles to make it worth it. I would nt gamble your retirement fund in LOS. there must be better options, like malaysia, vietnam. Read some of the recent policy changes on the threads on here and se what you think. This h=guy who has the website of cousre will make it look attractive because he will make money out of it, but it doesnt mean its a good idea. Maybe for someone with spare cah in their 30's wanting to make some money, but not for retirement money. But as I said I dont know the ins and outs so it maybe a good thing. Some people who know better on here and else where will tell you. Remember to get an independent,impartial assessment. good luck Link to comment Share on other sites More sharing options...
junglesoup Posted January 10, 2007 Report Share Posted January 10, 2007 actaully just did a search on leslie wright and he seems to know what hes talking about, however he contradicts what you said. Look at this article, where he said buying is frought with danger and renting is best. buying in thailand Link to comment Share on other sites More sharing options...
loner w/a boner Posted January 10, 2007 Author Report Share Posted January 10, 2007 Look at this article, where he said buying is frought with danger and renting is best.buying in thailand That's the article I was referencing in my initial message. Apparently someone posted it in this website; which is where I read it. My family is in Thailand, so can't do any other country. I wouldn't live thousands of miles from any property I owned, if I could help it. Stable, happy marriage--even though I know there are risks. Could follow this author's advice and form a company. To me, that's just one detail. What I'm hoping to find out on this forum is: Just how viable is it, and is anyone doing it, etc...I don't mind owning condos, but the management company changing/really sucking is a major risk factor. An established neighborhood with houses reduces a lot of risk. I'd rather stick with houses in a well-established neighborhood. And as far as betting my retirement on it, it may be a large % of my retirement, although I know about diversification. Anyone out there with experience in this? Link to comment Share on other sites More sharing options...
SingaporeSteve Posted January 10, 2007 Report Share Posted January 10, 2007 Yes I have done it - I have built an entire village which we predominantly own and rent out - we manage all the properties including the ones we do not own - we have no owner occupiers. To my mind, yes its a very strong business - we are 100% occupied and we achieve the highest rents on the Eastern Seaboard. We have virtually no credit risk as the tenants are working for big companies here and due to the rents we charge, they are typically higher end management so the finance depts do not delay payment. The key to our success on rates is that we control everything - if we dont like the prospective tenant - we dont rent to them and if we discover after we have let something that we dont like them, we dont renew the contract. We employ all our own gardeners, pool guy, security guards etc. Has it been easy - nope its not - but now after 2 years since opening we are starting to reap the rewards and earning good money out if, while the assets continue to increase in value. We have an average time lag between a property coming available and being rented again of 6 weeks. Probably the shortest downtime (in income terms) of any housing project that I am aware of. With a Thai wife, you could actually make a lot more money out of it than we do as we have to do everything legally - putting stuff into your wifes name (even if its just 2/3 houses) would save a fortune in VAT payments etc which we have to include in our pricing and probably would not even need to register the staff for tax and social security purposes. Probably could save yourself about 25-30,000 baht every month over what we have to spend on this kind of thing. Would I do it again? No - not in the current climate - with a Thai wife you trust (unlike me and our other shareholders who are all single) - she can own the land in her name and it makes it a very secure and attractive business. Infact - to a Thai its a great business - as they can get a mortgage on the whole project which the banks themselves value at over 40,000,000 baht just based on land and the shells of the houses (ie they dont include landscaping, air-con, kitchens, furniture etc - basically anything than be removed before re-possessing a property) and finance it over countless years and use the rent income to pay off the loan quickly. Cheers SS Link to comment Share on other sites More sharing options...
SingaporeSteve Posted January 10, 2007 Report Share Posted January 10, 2007 Actually Leslie Wright died a couple of years but he was well respected in Pattaya as a financial advisor. He did infact own his own property which was a sizeable house and land which is at odds with what the article suggests. Cheers SS Link to comment Share on other sites More sharing options...
SingaporeSteve Posted January 10, 2007 Report Share Posted January 10, 2007 By the way our project is not in Bangkok - we felt the returns were not worth the risk - i.e 3/4% was not enough for us and the land costs too high to do a project with sufficient scale to get a decent return. Cheers SS Link to comment Share on other sites More sharing options...
ThaiHome Posted January 11, 2007 Report Share Posted January 11, 2007 I think you should mention that the key to the success of your project (besides your hard work, of course) is the location, right smack dab in the middle of the most desirable area for the full package expats you rent to. Most other expats in Pattaya probably don't even know that area exists. TH Link to comment Share on other sites More sharing options...
loner w/a boner Posted January 11, 2007 Author Report Share Posted January 11, 2007 Thank you for your explanation SS. I haven't even considered building/owning my own moobarn. Interesting idea. It would definitely take some capital though. Surprised the bank would finance enough for that. I was thinking of buying "select" houses here-and-there around the more stable neighborhoods in Bkk. The bottom line would be ROI, is the % return enough to justify the risk, expenses, and headaches. Even a smaller return would be acceptable over a long time horizon if it there was a high probability of sufficient equity appreciation. I know a little of what you said about the land/shell value of homes. Typically properties are valued 2/3 land, and 1/3 shell, with the condition of the house/quality of construction materials appearing somewhat irrelevant (my impression). I'm going to give this some more thought. I'd like to keep this in Bkk. My wife's job keeps us here. We have considered moving upcountry, though. We wouldn't be moving to an upscale/tourist area, it would be the boonies, so I'd probably still have to do the individual housing. Dunno. If anyone else cares to add to their experiences, I would be much obliged. Thanks. Link to comment Share on other sites More sharing options...
Nervous_Dog Posted January 12, 2007 Report Share Posted January 12, 2007 To give you an idea, a good house in our Soi, walking distance to Tesco and underground, 2 storey, 3 toilets, goes for about 7 million baht. You can get cheaper but you'd need to spend 2 million to get any rent for it. We rent this place for 20 000 a month. Is my maths right in thinking that 3.4% return? OGG Link to comment Share on other sites More sharing options...
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