How long does it take to find a buyer and sell a condominium (in normal times, not now)

[Yellowtail]

54 minutes ago, soalbundy said:

Depends on whether rising sea levels have reached the ground floor units or not.

 

Yeah, Bangkok is just a few feet higher than Miami Beach, and I've notices the real estate there is plummeting as well...

[cmarshall]

24 minutes ago, Yellowtail said:

 

Perhaps not a good reason to you. And yes, you can rent watches, boats, cars, most anything.

 

I see any number of reasons owning a condo is better than renting, and I see reasons why renting is better. In a rental, I (generally) would not be able to paint, replace carpet, install new AC, renovate the kitchen or bathroom, knock a wall out, put a wall in, install a hot-tub on the balcony and any number of other things that I could do if I owned the property. 

 

I see value in being able to do these things, you don't, whatever.

 

To be clear, I do not now nor have I ever owned a condo.

 

Yes, I can see that modifying an apartment to your own taste could be a reason to want to own.  You're right it wouldn't be worth it to me to assume the risks of ownership especially during retirement for that reason alone.  Here in BKK at least in my limited experience I have been able to negotiate substantial changes.  For instance, in our current rental we required the landlord to remove all of the existing furniture, purchase new furniture that we had selected, paint the walls, make repairs, and install a new washing machine and a dryer at his expense.  All on a one year lease that is less than we paid ten years ago for a smaller unit in the same building.  But we benefited from the current Covid-induced shortage of foreigners.

 

I have owned a condo during my working years in Manhattan and did make modifications.

[Pravda]

54 minutes ago, Yellowtail said:

 

So I'm trying to understand why you are not able to invest in the S & P as you claimed.  I don't think it makes sense. 

 

Who is going to open an account for me?

 

[OneMoreFarang]

19 minutes ago, Pravda said:

1 hour ago, Yellowtail said:

 

So I'm trying to understand why you are not able to invest in the S & P as you claimed.  I don't think it makes sense. 

 

Who is going to open an account for me?

 

Maybe we should move this discussion to the how-to-invest section...

[Airalee]

3 hours ago, cmarshall said:

While we're on the subject, here's a local curiosity for which I have never found an adequate explanation.  The apartment that I rent is in a condo built on land under a thirty-year lease.  I think it must be in about year thirteen or fourteen at the moment.  So, what happens when the lease expires?  I assume that the lessor can then charge whatever he wishes to extend the lease which I would guess would be nearly equal to the market value of all the apartments.  If that is the case then "ownership" of the apartment amounts only to long-term rental.  Seems hard to understand why anyone would be under such circumstances.  Is it perhaps the case that the condo association typically has a right to renew the lease for a set period at a pre-determined rate?

 

As far as I am aware such arrangements are unknown in the US.

I’m not sure how it works here, but back in the US, in Palm Springs, there are many condos built on tribal land that is leased.  The lease terms I have seen are anywhere from 50-80 years and are usually renewed when there is 30 years left on the lease as banks won’t offer 30 year mortgages when there is less than 30 years remaining.

 

I wouldn’t have a problem buying a condo on leased land in the Palm Springs, but here...no way.

[Yellowtail]

17 minutes ago, Airalee said:

I’m not sure how it works here, but back in the US, in Palm Springs, there are many condos built on tribal land that is leased.  The lease terms I have seen are anywhere from 50-80 years and are usually renewed when there is 30 years left on the lease as banks won’t offer 30 year mortgages when there is less than 30 years remaining.

 

I wouldn’t have a problem buying a condo on leased land in the Palm Springs, but here...no way.

 

What's the difference? That the bank won't loan on it tell you all you need to know. 

 

It's no different than leasing anything, if it makes economic sense it makes economic sense, if it doesn't, it doesn't. 

[Yellowtail]

43 minutes ago, Pravda said:

 

Who is going to open an account for me?

 

 

Did you already ask your mother?

[Peterw42]

3 hours ago, cmarshall said:

While we're on the subject, here's a local curiosity for which I have never found an adequate explanation.  The apartment that I rent is in a condo built on land under a thirty-year lease.  I think it must be in about year thirteen or fourteen at the moment.  So, what happens when the lease expires?  I assume that the lessor can then charge whatever he wishes to extend the lease which I would guess would be nearly equal to the market value of all the apartments.  If that is the case then "ownership" of the apartment amounts only to long-term rental.  Seems hard to understand why anyone would be under such circumstances.  Is it perhaps the case that the condo association typically has a right to renew the lease for a set period at a pre-determined rate?

 

As far as I am aware such arrangements are unknown in the US.

 

2 hours ago, OneMoreFarang said:

I know such a case in Bangkok. The 30 years end in about 3 years. And that's it. Bye bye. Nothing!

But the "owner" told me she "bought" it for a very good price 27 years ago and all in all it was a good deal. She has no regrets. 

 

You will find its not a condominium block its an apartment block, they are two separate things.

 

A condo block stands on land owned by the block and condos are individually owned (otherwise its not a condominium as per the condo act). An apartment block has one owner and stands on either owned or leased land.  One owner owns the whole block and rents out the apartments, often under long leasehold agreements. (people mistake these as ownership)

Nobody ever buys or owns an apartment in an apartment block, its only ever a leasehold. A true condo with individual ownership and common land ownership cannot be built on leased land

[Airalee]

49 minutes ago, cmarshall said:

 

Yes, I can see that modifying an apartment to your own taste could be a reason to want to own.  You're right it wouldn't be worth it to me to assume the risks of ownership especially during retirement for that reason alone.  Here in BKK at least in my limited experience I have been able to negotiate substantial changes.  For instance, in our current rental we required the landlord to remove all of the existing furniture, purchase new furniture that we had selected, paint the walls, make repairs, and install a new washing machine and a dryer at his expense.  All on a one year lease that is less than we paid ten years ago for a smaller unit in the same building.  But we benefited from the current Covid-induced shortage of foreigners.

 

I have owned a condo during my working years in Manhattan and did make modifications.

Even when I was renting here in Thailand, I would always replace the mattress and sofa myself.  Nothing special...but better than what they had in the units and better than what I would have ever been able to convince the landlord to replace it with...and chances of them even replacing it would have been slim to none.

 

I finally purchased a unit...partly because it was pretty much exactly what I was looking for (both view and layout) and also because when I lived in L.A. and Seattle during the housing bubble, after the “reflation” (I would have preferred deflation but that is wishful thinking) rents came close to doubling in the last 10 years.  So, purchasing for me was partly a financial decision and I already have other diversified investments.  Not only am I hedging (housing) inflation, but also the exchange rate risk.  If I ended up making the wrong choice, I can live with that.  
 

That being said, I wouldn’t buy 99% of the units out there either because even with the discounts being offered (usually on the subpar units in a building) I feel that the P/E ratio is far out of whack and also because I just don’t like the floor plans in most of the smaller (Under 60 sqm) units.  The P/E ratio of the unit I purchased was good (about 180x a realistic monthly rent estimate) and I also purchased a “contract” from a Singaporean who couldn’t/wouldn’t close and was willing to sell at a much larger discount than even the developer is currently offering on the units.

[Airalee]

13 minutes ago, Yellowtail said:

 

What's the difference? That the bank won't loan on it tell you all you need to know. 

 

It's no different than leasing anything, if it makes economic sense it makes economic sense, if it doesn't, it doesn't. 

The difference is that in Palm Springs, the banks will loan on the leased land as it usually isn’t an issue and as I mentioned, the leases are extended before the remaining lease gets to 30 years.  Here, they start at 30 years...not 60-80 as in Palm Springs.  I don’t trust them to renew here.

 

That being said, the leasehold units in Palm Springs do sell at a discount to those on fee simple land.  Sometimes, the owners will buy out the lease and then the sales prices increase (sometimes substantially).

Edited November 22, 2020 by Airalee

[Yellowtail]

2 minutes ago, Airalee said:

The difference is that in Palm Springs, the banks will loan on the leased land as it usually isn’t an issue and as I mentioned, the leases are extended before the remaining lease gets to 30 years.  Here, they start at 30 years...not 60-80 as in Palm Springs.  I don’t trust them to renew here.

 

I thought you said the banks would not loan with less than 30 years left.

 

I would not trust them in in Palm Spring either unless it were clear in the lease documents 

[Pravda]

13 minutes ago, Yellowtail said:

 

Did you already ask your mother?

 

I'm asking you. 

 

You seem to know everything. 

 

I'm waiting. 

[Airalee]

1 minute ago, Yellowtail said:

 

I thought you said the banks would not loan with less than 30 years left.

 

I would not trust them in in Palm Spring either unless it were clear in the lease documents 

I did say that...hence, the reason that the homeowners associations will renew (extend) the lease usually long before the 30 year mark.  And as you say...it is something that is clear in the lease documents and will have a percentage raise already agreed upon.  

[Yellowtail]

2 minutes ago, Pravda said:

 

I'm asking you. 

 

You seem to know everything. 

 

I'm waiting. 

 

Okay, I'll open it for you. How do you want to send me the money?

[Yellowtail]

1 minute ago, Airalee said:

I did say that...hence, the reason that the homeowners associations will renew (extend) the lease usually long before the 30 year mark.  And as you say...it is something that is clear in the lease documents and will have a percentage raise already agreed upon.  

 

Well then you don't have to trust them.

 

Now you have me jonein' for a date-shake...

[ChaiyaTH]

Knowing the biggest global crisis of all in modern history is still delayed so far, then looking at a 10 year timeframe, knowing there are way too many properties VS people to afford and live in it + immigration policies. I'd say you be lucky to even break-even on it.

 

That beside it, the ROI on condo's is that horrible, that it is cheaper to rent one and put your condo money in something else. A bit too late now but as me and other said many times previously, Bitcoin at 4000 dollars in 2018 was a steal.

 

You would make more with having cash ready in your hands, when this global crisis breaks out.

Edited November 22, 2020 by ChaiyaTH

[ChaiyaTH]

COVID-19 is essentially nothing more than a warm up for much more misery to come. Looking at history this all will take 5-10 years.

[Yellowtail]

Just now, ChaiyaTH said:

COVID-19 is essentially nothing more than a warm up for much more misery to come. Looking at history this all will take 5-10 years.

 

What history should we be looking at?

[ChaiyaTH]

5 minutes ago, Yellowtail said:

What history should we be looking at?

Same pattern that has repeated itself in terms of civil war, global war and economic collapses / crisis since entire modern history. It was due in 2020 and called upon by a ex marine from Holland who studied that for like 2 decades. He was laughed at, now not anymore.

Edited November 22, 2020 by ChaiyaTH

[cmarshall]

58 minutes ago, Peterw42 said:

 

 

You will find its not a condominium block its an apartment block, they are two separate things.

 

A condo block stands on land owned by the block and condos are individually owned (otherwise its not a condominium as per the condo act). An apartment block has one owner and stands on either owned or leased land.  One owner owns the whole block and rents out the apartments, often under long leasehold agreements. (people mistake these as ownership)

Nobody ever buys or owns an apartment in an apartment block, its only ever a leasehold. A true condo with individual ownership and common land ownership cannot be built on leased land

Well, now that's confusing.  I am certain that the building where I rent is built on leased land because all the buildings in this area are known to be built on leased land.  But the building is always called a condominium and apartments are offered for rent or for "sale."  So, what you're telling me is that condo does not mean condo and buy does not mean buy.  Very interesting.

 

Nevertheless, it still raises the question that if, as I have heard, the lease on the land is indeed for thirty years then the "owner" of the apartment block is going to be left holding the bag at the end of the thirty year lease, possibly owning nothing.  I understand that while there may be a renewal clause in the land lease such clauses may not be enforceable.  Is this the case?

[bkk6060]

5 hours ago, richard_smith237 said:

 

Sure you thought that one through???  How am I possibly 7MB down?

Could I have made 7 Million baht from a 7 Million baht investment in 5.5 years ?

 

 

Rent for the Condo was 35,000 baht per month...  5.5 years = 2,310,000 baht. 

 

Thats 2,310,000 baht we didn’t spend on rent (bought the condo for 7MB and sold it for 7MB). 

 

What investment can you make >2 Million baht off a 7 Million baht investment ????

What investment of 7 Million Baht yields 35,000 baht per month ?

 

 

 

 

 

 

 

 

 

Your investment return explanation on this is flawed.

Put that 7 mb in a simple DOW fund over the past 5 years and it would have almost doubled.

So,  you lost 66% on your original investment which in reality appreciated zero.

Nice try though.  Buyers trying to justify their dead money property investments in Thailand always bring up the rent scenario.  Which is false thinking if one has broad investment knowledge.

 

Buying a place in Thailand is a place to live, not a good investment.  Investors will rent at what are now bargain prices.  Keeping their cash working for them in true investments that appreciate and can be easily liquidated. 

100,000 current empty properties in Bangkok alone the market will not see much gain and probably depreciate until that inventory is sold.  Which may be never.

Edited November 22, 2020 by bkk6060

[OneMoreFarang]

1 hour ago, Peterw42 said:

You will find its not a condominium block its an apartment block, they are two separate things.

 

A condo block stands on land owned by the block and condos are individually owned (otherwise its not a condominium as per the condo act). An apartment block has one owner and stands on either owned or leased land.  One owner owns the whole block and rents out the apartments, often under long leasehold agreements. (people mistake these as ownership)

Nobody ever buys or owns an apartment in an apartment block, its only ever a leasehold. A true condo with individual ownership and common land ownership cannot be built on leased land

The place which I know with the expiring 30 years land lease is a condominium.

The person who I know owns the unit - but not the land.

It's in the middle of Bangkok and the land is owned by someone who should not be named and who visits Germany very often.

There is nothing to negotiate. That's it. Out.

But like I said before, they bought the unit for a very good price many years ago.

[Peterw42]

52 minutes ago, cmarshall said:

Well, now that's confusing.  I am certain that the building where I rent is built on leased land because all the buildings in this area are known to be built on leased land.  But the building is always called a condominium and apartments are offered for rent or for "sale."  So, what you're telling me is that condo does not mean condo and buy does not mean buy.  Very interesting.

 

Nevertheless, it still raises the question that if, as I have heard, the lease on the land is indeed for thirty years then the "owner" of the apartment block is going to be left holding the bag at the end of the thirty year lease, possibly owning nothing.  I understand that while there may be a renewal clause in the land lease such clauses may not be enforceable.  Is this the case?

 

Its often not much different to toyota leasing some land and building a car factory on it, they make cars for 30 years,  re-coup the initial construction cost, tax deductions and depreciation etc, make money for 30 years, then walk away. Add up the rent collected over 30 years and its a chunk of money and a profitable business venture.

Yes, I think you are right, after 30 years a renewal may be negotiated but not enforceable. 

 

Does an individual blue book exist for your apartment, or just one or the whole block ? 

Edited November 22, 2020 by Peterw42

[Airalee]

24 minutes ago, bkk6060 said:

Your investment return explanation on this is flawed.

Put that 7 mb in a simple DOW fund over the past 5 years and it would have almost doubled.

So,  you lost 66% on your original investment which in reality appreciated zero.

Nice try though.  Buyers trying to justify their dead money property investments in Thailand always bring up the rent scenario.  Which is false thinking if one has broad investment knowledge.

 

Buying a place in Thailand is a place to live, not a good investment.  Investors will rent at what are now bargain prices.  Keeping their cash working for them in true investments that appreciate and can be easily liquidated. 

100,000 current empty properties in Bangkok alone the market will not see much gain and probably depreciate until that inventory is sold.  Which may be never.

Agree with you 99%.  For the many years I have followed R/E...from the housing bubble blogs circa 2005 and for the 8 years 8 have been reading Thaivisa, most of the same tired cliches (Renting is dead money, sour grapes etc) were trotted out and never did the owners make mention of opportunity costs.  For 8 years here in Thailand, renting was the way to go for me.  
 

However (and this is where the 1% disagreement comes into play), I’m not so sure of the opportunity costs from here.  With the DOW and other major Indexes at all time highs,  interest rates at all time lows (and probably staying there for the foreseeable future) I don’t really see any risk free (or even low risk) decent returns.  I don’t even trust the high dividend paying stocks that I currently own (T, GSK, KHC etc).  I won’t consider speculative investments at this time such as gold and Bitcoin to be options either.

 

Do I expect the condo that I bought to appreciate?  In real terms...absolutely not.  Nor do I cheer or hope for it.  I loathe how shelter has become a speculative asset and the fact that people have been pushed out due to low interest rates, hinky mortgages (such as the stated income, negatively amortizing, liars loans etc) actually irks me quite a bit.

 

I guess I’m one of those rare owners that says...”Bring on the crash!”  Unfortunately, I don’t think it will happen.

[Peterw42]

21 minutes ago, OneMoreFarang said:

The place which I know with the expiring 30 years land lease is a condominium.

The person who I know owns the unit - but not the land.

It's in the middle of Bangkok and the land is owned by someone who should not be named and who visits Germany very often.

There is nothing to negotiate. That's it. Out.

But like I said before, they bought the unit for a very good price many years ago.

Yes, there have been some bogus ones over the years, I think there is legislation in place nowadays and it cant happen 

Does the person you know have an actual Chanote ? They cant be issued for just a structure.

[ChaiyaTH]

44 minutes ago, bkk6060 said:

Nice try though.  Buyers trying to justify their dead money property investments in Thailand always bring up the rent scenario.  Which is false thinking if one has broad investment knowledge.

Finally someone speaking sense... this rent argument story is getting so boring.

[OneMoreFarang]

2 minutes ago, Peterw42 said:

Yes, there have been some bogus ones over the years, I think there is legislation in place nowadays and it cant happen 

Does the person you know have an actual Chanote ? They cant be issued for just a structure.

I don't know. And it's not important enough for me to try to get all the details from her.

She is ok with what will happen - that's good enough for me to know.

[mstevens]

On 11/22/2020 at 1:28 AM, OneMoreFarang said:

I am a little concerned about acting quickly. Because I am sure some bargains are bargains for a reason. Or someone was dead in bargain apartment for 2 weeks.

 

So long as the body has been taken away, all good!

[AlexRich]

6 hours ago, ChaiyaTH said:

Finally someone speaking sense... this rent argument story is getting so boring.

What does buying a condo in Bangkok as an expat actually mean? It is effectively a 30 year lease, combined with annual maintenance charges. Sure, some people may be fortunate enough to sell a few years later for more than they paid, if market conditions permit. But many I have read about have lost money or ended up with an asset that is difficult to sell. Buying a condo in Thailand is no slam dunk.

[cmarshall]

3 hours ago, AlexRich said:

What does buying a condo in Bangkok as an expat actually mean? It is effectively a 30 year lease, combined with annual maintenance charges. Sure, some people may be fortunate enough to sell a few years later for more than they paid, if market conditions permit. But many I have read about have lost money or ended up with an asset that is difficult to sell. Buying a condo in Thailand is no slam dunk.

 

Well, what we have learned is that there are two possibilities.  If he "bought" a leasehold "condo" then yes, he just rented the apartment for 30 years.  However, freehold condos do exist.  If he bought one of those then he got a chanote, owns it in perpetuity, can pass it to heirs, etc.  That difference may or may not make the purchase profitable.