A positive story about buying a house in Thailand

[MercyMike]

This is a positive report about buying, building and owning a house in Thailand. So if you expect loss of cash, girls running away with the poolhouse or building contractors delivering a plastic box instead of a castle, look elsewhere.

 

Why i write this : Maybe it helps someone feel more comfortable about the whole process. Plus as a balance to all the bad stories out there because people without problems usually don't write so you only get the sad stories.

 

After living in Thailand for a few years and spending quite a sum on rental homes in both pattaya and hua hin, i thought i would be wiser to buy. The average rent i paid for a new 3 bed 2 bath, swimming pool villa was around 40k per month, totaling half a million baht per year. Looking around in hua hin as we were still living there at that time, there were plenty of houses available from 2 million all the way to 72, that last price is in the Banyan project. They deliver Bali style houses for mostly dutch retirees. I am one of those but not interested in spending 72 million. The biggest problem with the 72 million price, is that i don't have the money which apparently made it impossible to get that house.

 

After almost a year however i thought that living around Pattaya would be a better idea for us, Hua hin is not our taste, of course everyone thinks different so if you love that place, all the better for you. Sadly the choice in housing around Pattaya is substantially less than in Hua Hin. It seems most expats decide on a condo with easy access to the beach in Pattaya or Jomtien.

 

Of course it's covid time, so Pattaya is in dire straits at the moment and so is the housing market, which is both sad and on the other side of the coin, also an oppurtunity for lower prices and more choice. I think Pattaya will be back, maybe not 100% in it's former state but certainly a lot better than it is now. Either the old vibe comes back, or more likely the Thai want to transform it to a more middle of the road place. The worst outcome would be that it turns into a Chinese gambling den, but then i would be able to sell my house easily to a chinese customer that's overflowing with money from the fake condo boom in China...

 

After a lot of looking we decided on a house that only had the foundations and the walls there in a project. Of course there were already other finished houses, and really the whole street of about 8 houses was being constructed at the time. After negotiating a substantial discount we agreed on a 5.1 million price. I paid a deposit of 50k baht to secure the house and start the contract phase which would take about a month.

The contract was a mess, basically made for Chinese or Russian customers who don't know their rights or can't read the English/Thai well enough to see what is happening. I told them what i wanted to see in the contract and after a few back and forth they agreed on a more "European" construction contract with a late clause and several certainties for me. I signed the contract and paid the 50%. The other 50% would be paid at the end of the construction after the list of potential problems would have been handled. 

 

The next few months was the construction phase, i have to say that i was pleasantly surprised by the quality and workmanship of the building company that was constructing the entire project. As soon as i paid the 50% the workers concentrated on my/our house and the yet-to-be-sold ones progressed slower. 

There were some minor hiccups during the construction with communication issues and confusion, but nothing more than i have encountered during building previous houses in both Holland and Germany. The house was delivered from the project, after which the company for the inbuilt furniture started working. I didn't have to pay for the house until that company was 100% finished and all the aircon's curtains and inbuilt furniture was in place. That was a pleasant surprise and something that certainly would not have happened in Europe.

 

Now for the ownership part : As i live permanently with a TGF, there are basically 4 options : Thai Company, lease from her, lease from project, or a usefruct. The project company doesn't do leases so that was out of the window. A usefruct was next, but who knew : The pattaya land office doesn't allow for usefructs on foreign names, something that is no problem in Hua Hin.

Leasing from her is easy and safe, but if the relationship would go south which i don't think it will but there is always a possibility of course. If that happened i would not be able to sell without her consent. So that's out of the window too

As i know plenty of people with a house in a company i decided on that system and told the TGF that she would get 49%, the mother 2% and myself the remaining 49% BUT also told her that i would have the power and control to sell the company without her consent. Surprisingly she was happy about me telling her the truth and that she understood as it's my cash afterall. 

Now for the funny part : The pattaya land office doesn't allow transfer if there is a foreign owner of the company. So this happens : 1) company is created with lawyer, tgf and mama as owner. 2) house is transferred to the company in the land office. 3) The 49% (with 100% of the votes) of the lawyer is transferred to me. 4) Presto i am CEO of the company and the house.

Yes i know it's weird, yes i know if the government wanted they could dissolve the company and i would have to find another solution (lease). But... this has been going on for many many years and it's accepted like so many things in Thailand are. TIT. But i understand if you don't trust it. I trust it 90% hence my limit on how much money i want tied up in Thailand.

 

Everything went smooth with the land office, went smooth with the lawyer and went smooth with the company transfer. I have the chanote, the company, the empty blue house book and the next step is getting the yellow house book and a pink Thai ID. Will that make me resident ; nope. It's handy to have though.

We currently live in the house since a month and all the little things that go wrong with a new house have been solved by the project in record time. Never was there any request for more money or complaints about my complaints. Internet with 500/500 is installed to my surprise as the house is in nakon nowhere a little. 

O yeah, in the end i spend 6.1 million total, inbuilt furniture is expensive, 4 aircons, extra storage room and basically everything needed to be bought as i and the TGF have only rented before. From bed to sofa from fork to tv. 

Economic thoughts : Now i safe 500k per year on rent, possibly more in the future with inflation. But lets keep it at the 500k. In 8 years i will have saved 4 million, so i could sell the house for 2 and still break even. i'm 100% sure it will sell for more than that. For me with a long term plan to stay here, it makes sense. For you things can be very different but i wanted to show that buying and owning a house isn't such a big risk or stress.

So if you want a house, don't be too scared, do your research and the entire process can even be enjoyable. The end result certainly is. Good luck and thanks for reading. 

[article22]

I don’t understand why you gave your gf 49% and her mum 2%?
Surely if things go bad for either of them then they can use the house as collateral?

I thought it was more normal to have someone independent to have the 2%?
 

I looked at buying a house here and decided it was too risky so got a decent condo with a good developer in Foreign allocation so everything is legal.

[Edge]

If I had told my story at the same point as you've told yours then mine would have seemed OK too.  

It's not over til it's over.   

Edit - Sorry, forgot........Good Luck.   

 

 

Edited September 11, 2021 by Edge
Good Luck

[MercyMike]

2 hours ago, article22 said:

I don’t understand why you gave your gf 49% and her mum 2%?
Surely if things go bad for either of them then they can use the house as collateral?

Yes i though that too, but it doesn't matter as they have zero percent of the votes. I can sell the company without any need for agreement on both on them. Selling the house is a matter of transferring my shares to someone else, there isn't actually any real estate transaction. 

Edited September 11, 2021 by MercyMike

[MercyMike]

2 hours ago, Edge said:

If I had told my story at the same point as you've told yours then mine would have seemed OK too.  

That sure is a long story, i will read it as soon as i have some time and hope everything is ok with you.

Also my TGF has a history of an ex boyfriend that she refunded her house in Isan too (800k), so there is an added element of trust even though that is not needed. 

Life is full of risks, we can only try to limit them as much as possible within the things we want to do.

Edited September 11, 2021 by MercyMike

[Edge]

45 minutes ago, MercyMike said:

That sure is a long story, i will read it as soon as i have some time and hope everything is ok with you.

Also my TGF has a history of an ex boyfriend that she refunded her house in Isan too (800k), so there is an added element of trust even though that is not needed. 

Life is full of risks, we can only try to limit them as much as possible within the things we want to do.

Don't worry I'm not going to harang you.
People will always make assumptions and jump to their own conclusions (as you have ) or just believe what they want to believe to justify why they never took any chances in life.
My problems were mainly due to a crooked Thai Lawyer rather than the Ex......in fact she was a 49% shareholder in a house I bought about 5 years later, so I suppose I still trusted her.

One of the things I got wrong, which I'm surmising applies to your house if the plans were already in place.......assuming planning consent was required, whose name is on it?

 

[MercyMike]

1 minute ago, Edge said:

Don't worry I'm not going to harang you.
People will always make assumptions and jump to their own conclusions (as you have ) or just believe what they want to believe to justify why they never took any chances in life.
My problems were mainly due to a crooked Thai Lawyer rather than the Ex......in fact she was a 49% shareholder in a house I bought about 5 years later, so I suppose I still trusted her.

One of the things I got wrong, which I'm surmising applies to your house if the plans were already in place.......assuming planning consent was required, whose name is on it?

 

Yeah true about conclusions, everyone including myself takes them too quickly it's human nature sadly. I am not sure i understand your question fully but the land/house and planning were on the project company before they were transferred to my company. 

[Edge]

35 minutes ago, MercyMike said:

................................. I am not sure i understand your question fully but the land/house and planning were on the project company before they were transferred to my company. 

In my case, we applied for Planning Consent ourselves but the officer asked the Ex to sign the application (bit Thai rak Thai)) albeit I paid the 15k Fee.
Several years later I was told by my then Lawyer that this was significant as it meant that she was entered as the house owner....as well as the land owner (whom I Leased from) so my position was significantly weakened.
This one I put down to my mistake.
I don't know if or how that can be changed later.

I subsequently read about some disputes in the Hua Hin and Phuket areas where a Developer had 'sold' houses under the 30+30+30 year Lease heading which was decreed unlawful (30 years is max) or at least unenforceable.
In taking actions to get ownership the buyers ran into problems because the Developer's wife's name was on all the Planning Applications.
I was left convinced that the name on the application is significant, but I may not have it exactly right.