Buying a condominium in Bangkok as investment for earnings

[hukoch]

Hello,

I am thinking of buying a condominium in Bangkok and then want to rent it to others so that I will have some regular earnings.

 

The condominium should be in a good location so that there will be always the guarantee that I can rent it in the long run.

 

How is your opinion about this and who has experience with that? 

[penboy]

Are you living in Thailand?

[hukoch]

No, my plan is to live there in 6-10 years.

At the moment it will be more an investment to secure money (I am from Germany and dont trust in the EURO) outside of the EU.

[penboy]

10 minutes ago, hukoch said:

No, my plan is to live there in 6-10 years.

At the moment it will be more an investment to secure money (I am from Germany and dont trust in the EURO) outside of the EU.

Finding someone reliable and trustworthy to manage the lettings and property is important as you will be out of the country. 

As you are not desperate or in a hurry to buy, look out for fire sale (desperate sellers) offers. I'm in Jomtien so can't comment on the situation in BKK, all I know is that there are many empty condos in my block where it looks like the owners have not been here since before covid. Don't be frightened of putting in low offers if you see a condo that you want. Maybe get friendly with an agent and reward them 😏 if they give you a heads up on a desperate seller. 

[penboy]

5 hours ago, hukoch said:

No, my plan is to live there in 6-10 years.

At the moment it will be more an investment to secure money (I am from Germany and dont trust in the EURO) outside of the EU.

I understand your point about getting your cash out of the Euro, especially if you want to live in Thailand in the future. 

Planning ahead is fine, but can you be sure that in 6-10 years time you will want to live in BKK. Are you going to retire there? If you change your mind and have bought a condo, you might have difficulty in selling it.

Have you considered putting your funds in to the stock markets? They are down from recent highs and should give a decent return over the next 6-10 years. You could invest in non-EU currency so if the euro tanks, your investments will be hedged in another currency. You can use this to buy a property when you actually want to move to Thailand. Selling investments is a lot easier and quicker than selling a condo.

[jocky king]

2 hours ago, penboy said:

I understand your point about getting your cash out of the Euro, especially if you want to live in Thailand in the future. 

Planning ahead is fine, but can you be sure that in 6-10 years time you will want to live in BKK. Are you going to retire there? If you change your mind and have bought a condo, you might have difficulty in selling it.

Have you considered putting your funds in to the stock markets? They are down from recent highs and should give a decent return over the next 6-10 years. You could invest in non-EU currency so if the euro tanks, your investments will be hedged in another currency. You can use this to buy a property when you actually want to move to Thailand. Selling investments is a lot easier and quicker than selling a condo.

Agreed , I bought 3 condo in 2005 for €105,000 . Got all those money back from rent plus profits . I was lucky to have tenants all those years . I was lucky one , I saw many condo empty during the convid pandemic .  Now I plan to sell the two , but will be difficult . I might only sell the less price than I bought at first .  I will be happy anyway cos I got all those money back & profits , had a free holidays in pattaya since 2005  .  Buy a condo only if you have money to burn . 

[regyai]

Not in any way an attempt to 'burst your bubble'

But bear in mind that Thai property is nowhere near the gilt edged investment it is in the west. As the prior poster states 'he was lucky' - in broad terms there is a perpetual glut of properties and often a dearth of buyer/prospective tenants. Property in Thailand is more likely to diminish in value than increase, and given the over supply of new builds your future ageing 'investment' may well prove very hard to 'unbuy'.

Also bearing serious thought regarding a potential Thai retirement in 6-10 years time is that with the goalposts moving with every governmental knee-jerk future whim this may not be the given you assume it to be.

Edited January 2, 2023 by regyai

[CamelToe]

And if you have a great view in BKK that made you buy it,there is every chance it will be built out in the future

[hs2017]

I consider Real estate in Bangkok , High risk and High return investment....

Promise yourself before before taking any step that 

1) Never ever buy off plan property

2) Never try to play game with Law...as you are foreigner here...small mistake can cost all your money...

3) Do not use nominee arrangement or some funny thing ...It will bite you later 

 

Try to find property near by MRT and BTS.....or near Famous Park/landmark.....There will be shortage of renter 

Sansiri Developer has very nice projects ....It is the biggest and listed developer in Thailand ..Most project are situated at good location ......Provide good return...

Wyndham Bangkok Queen Convention Centre- You can rent at Holiday home as well....Siam Asset's property (Listed property developer )...they have very nice other offering .......Keep in mind that It is branded residence - High maintenance charges....But short term rental can do wonder some time (High risk High return type) same like Ramada Plaza Residence Sukhumvit 48

 

Studio at The Link Sukhumvit 50 

sale price - $60,800

Rent - $298/mo

CAM-$30/mo

ROI - around 6%

 

1 Bedroom at Asoke Place

Sale Price $238,000

CAM Fee $74/mo

Rent$1,120/mo

Rental Yield 6%

 

There are many more....Just use Fazwaz......they have good listing ....

[hukoch]

Thanks for the answer. Will check it and have a look to them.

[MidniteM]

On 02/01/2023 at 11:08, hukoch said:

No, my plan is to live there in 6-10 years.

At the moment it will be more an investment to secure money (I am from Germany and dont trust in the EURO) outside of the EU.

What a horrible idea.  (I will play the devil's advocate here)

How can you be "don't trust in the euro outside of the EU", but trust the Thai Baht and trust investing in Thailand as foreigner?  Earning EU and taking the money out of the ATM in Thailand is not a bad thing.

There is zero chance I would invest my money in Thailand, or any other country in SE Asia.  You are much better to invest in your own (financially stable) country and bring money in to Thailand when needed.

Sure, if you are living in Thailand long term, there may be an argument to buying a home, but even then there are many things to consider.

Owning a rental property, wherever you buy, is not easy.  It is NOT a passive investment - you will always have changing tenants, repairs, contact with agents, etc.

Anyone who has a long term financial horizon, I would recommend investigating having a ETF portfolio they invest in monthly.  After a few decades this will grow to a substantial amount and give you REAL passive income in the form of dividends.

Obviously there is a lot more detail in this sort of thing, but I have outlined the basics.

[penboy]

15 hours ago, hs2017 said:

 

 

1 Bedroom at Asoke Place

Sale Price $238,000

CAM Fee $74/mo

Rent$1,120/mo

Rental Yield 6%

 

 

1,120-74=1046 profit per month X 12 = 12,552 annual profit

yield is 12552/238000 = 5.3%

Absent landlord so will require agent to find tenants and manage the property, 15% fee?

Any additional service management fees, sinking fund?

Above calculation assumes 100% occupancy, assume 95%?

Wear and tear and maintenance issues in condo?

Yield is more like 4%.

[Pinoydave]

Sounds as if you don’t know Bangkok very well. All of Thailand has changed massively in the last 6-10 years, I would think it’s safe to assume Bangkok will change even more in the next 6-10 years……. Do you really think it will still be a nice place to live?

[MidniteM]

On 07/01/2023 at 08:27, penboy said:

1,120-74=1046 profit per month X 12 = 12,552 annual profit

yield is 12552/238000 = 5.3%

Absent landlord so will require agent to find tenants and manage the property, 15% fee?

Any additional service management fees, sinking fund?

Above calculation assumes 100% occupancy, assume 95%?

Wear and tear and maintenance issues in condo?

Yield is more like 4%.

One of the things that hasn't been discussed and I missed from my post is that when you invest in property, normally you use leverage.

In your own country you can (typically) borrow somewhere between 50-80% of the property value.  You can get tax benefits from this.  In Australia you can claim the interest as a tax deduction (part of Negative Gearing strategy). This will vary from country to country.

Not sure how things work for the OP, if he is from Germany.  Borrowing money in a country you don't live in is pretty tough.  Borrowing money in your own country to buy a property in another country is pretty tough.  Buying a property outright in another country is generally not a great idea.

Lots to consider. Still, I cannot see a reason for a foreigner to buy a property outright in Thailand if he is not living here permanently.  Even then, keeping the bulk of your assets in your home country can have significant benefits.  Tread carefully.

[olic]

On 07/01/2023 at 12:27, penboy said:

1,120-74=1046 profit per month X 12 = 12,552 annual profit

yield is 12552/238000 = 5.3%

Absent landlord so will require agent to find tenants and manage the property, 15% fee?

Any additional service management fees, sinking fund?

Above calculation assumes 100% occupancy, assume 95%?

Wear and tear and maintenance issues in condo?

Yield is more like 4%.

Great analysis. Whilst this yield is still better than most places in Australia, the capital growth on my Australian investment property has been very steady for the 7 years that I've owned it. So I'm betting overall investment is much better in Australia. The great thing about the Australian rental market is there is more demand than supply. I'm not sure if this is the case for Thailand condo's.

The OP said he doesn't trust the Euro but investing in Thailand (when you're a non resident) would be a major concern for me.

However if he's planning to live in it in 5 or 6 years than maybe it could work.

When I move to Thailand, I'm not planning on buying. I'll keep my Australian property as a fallback option. What if I get sick and have to come home?

 

[penboy]

On 02/01/2023 at 10:50, hukoch said:

Hello,

I am thinking of buying a condominium in Bangkok and then want to rent it to others so that I will have some regular earnings.

 

The condominium should be in a good location so that there will be always the guarantee that I can rent it in the long run.

 

How is your opinion about this and who has experience with that? 

Have you decided what to do?

[erict]

I known that after reading this you guys talked me out of buying….at least for now.  I had same idea except I’m worried about the US dollar tanking.  Plan to retire in Pattaya in a couple of years…part time but thought it would be better to have my own place but now I think I’ll wait and invest in something else.  One question I have is does anyone else own a condo remotely just for their own use?  If so, how do they take care of it when out of country?  Also can you receive and pay the utilities remotely?