# 14 Reasons Foreigners Should Think Twice Before Buying a Condo in Thailand

https://www.youtube.com/watch?v=aL53v_cohGQ

[00:06] Hi everyone, thanks for joining me once again for another video.
[00:08] Today I'm going to be talking about condominiums, buying a condominium or an apartment.
[00:14] And before I get into the video, I just want to read you out a message that I received from a viewer, uh, about a month ago actually, so I'm glad I'm able to now get around to make this video.
[00:22] Hi Peter, I've been watching your channel for several years and I've always enjoyed the mixed content.
[00:28] However, one thing has always puzzled me.
[00:31] I heard you mention several times on your live streams it's unadvisable for foreigners to buy a property here in Thailand.
[00:37] I just wondered if it might be helpful to others if you could perhaps make a video explaining why you don't think it's a good idea to purchase outright.
[00:46] Okay, and I think that's quite a good topic for a video today because there is, uh, a lot of guys retiring out here now from all over the world and, um, some of them are considering buying properties.
[00:58] So I always advise people I do think it's not a great idea to buy property out here and I'll go through all my bullet points and I'll talk about it more now I will.
[01:06] Get comments left from guys who have been out here and bought property.
[01:10] They're very, very happy.
[01:10] It's all gone smooth sailing for them, and uh they won't agree with this video, okay?
[01:16] But for everybody else, I'm not saying don't buy one.
[01:18] What I'm saying is just be aware there's a lot more things you need to take into account than you do in your own country.
[01:23] So as I say, I'll go through all the bullet points I've prepared and then we'll talk about each point, uh, and there's 14 of these, okay?
[01:32] So number one, foreigners are restricted to selling to other non-Thais as Thai Nationals often received preferential pricing.
[01:39] So what I mean by that is when they build a block of apartments, condo, whatever you want to call it, uh, they'll always sell it cheaper to the Thai person.
[01:49] So let's just use these numbers: if we said, uh, £200,000 or $200,000 is the price that they're asking you, uh, to buy an apartment in that building, then typically for a Thai person it might be 180, just for example.
[02:03] Don't quote me on figures there.
[02:04] So what that means is...
[02:07] When the time comes for you to sell your property, you're going to find it extremely difficult to sell it to Thais.
[02:13] In fact, you won't be able to sell it to Thai nationals because they're not going to pay that sort of money.
[02:20] Okay, the money that you pay for it, they're not going to pay.
[02:21] So what that does, that restricts your market.
[02:23] So if you want to sell fast, get out of it, change locations, or whatever, it's a real problem to be able to sell your apartment.
[02:32] Okay, right, point number two.
[02:35] Foreign ownership in condominiums is capped at 49%, meaning 51% must be sold to Thai nationals, typically at lower prices I've just mentioned.
[02:44] So if you don't know this, foreigners can't purchase land here, so you can't buy a house on its own land and you own the land.
[02:51] Again, people write in and say if you're forming a company, you know, there's lots of jumping through hoops.
[02:58] But generally speaking, if you just want to go out there and purchase a house with land, you can't do it.
[03:01] It's got to be an apartment, a condominium.
[03:02] Now, in these apartment buildings, condominiums...
[03:07] As it says there by and it is the law, uh, for only 49% of the residents the floor space can be purchased by foreigners.
[03:16] The 51% has to be purchased by a Thai, and again, what that means is if you were in a building that was full and that was the ratio, then you've got no other choice but to sell to another foreigner.
[03:28] Okay, so it's just another hoop to jump through.
[03:30] Number three, Thai nationals can generally rent properties at lower rates, to reduced price options available to them.
[03:38] So again, as I've already touched, because the Thai has bought the same, exactly the same condominium as you have bought but less money, they're then able to rent out, uh, for a lot less than you.
[03:51] So if you, if you invest in a property here in Thailand and you think it's a good way, uh, to make money here while you're here or overseas and you want to rent out the property, again, the problem is because you're paying more than the Thai person.
[04:03] If, if somebody looks at two, um, apartments, two condos in the same block, one's, uh, by a...
[04:09] Tie and one's Z by you, then theirs is going to be cheaper.
[04:14] And uh, unless yours is out of this world, then they're going to go for the tie, uh, the tie apartment.
[04:17] Okay, uh, number five, many new developments face slow occupancy while TI buyers tend to avoid pre-owned units due to cultural sensitivity sensitivities such as concerns over a previous occup occupants or deaths.
[04:32] Well, you know, here in Thailand, uh, the ties are very suspicious, uh.
[04:37] They believe in ghosts in a big way and Spirits, uh, all everything to do with the dead, and they're very, uh, it's a very touchy subject here in Thailand.
[04:46] And generally speaking, um, long I'm talking longterm for the, uh, buying Market, rental market, a tie would prefer to buy a brand new property rather than a secondhand property because of they don't know who's lived there before.
[04:58] They don't know if somebody's passed away, uh, you know, in the bedroom or wherever, and they think about this and it really puts them off.
[05:05] It's a cultural thing, you know, and, um, so that's it's just another hurdle that.
[05:09] Stops you selling, uh, as opposed to a brand new one.
[05:14] Let's move on to our next point, which is number six.
[05:16] Um, despite a saturated market and low occupancy rates, often around 30%, new apartment buildings continue to be constructed at a rapid pace.
[05:27] Now, what I mean by that is, it's they they just throw up buildings here really fast.
[05:31] And although they can see there's a lot of, um, empty units in a lot of the buildings, they just continue to build.
[05:40] Okay, so, you know, you might, uh, your apartment could be 5 years old.
[05:42] They go to look at a brand new apartment, it's same sort of price.
[05:46] You want the money that you paid a little bit more, uh, obviously they're going to go for the newer the newer block, uh, because yours is now 5 years old and again it's secondhand.
[05:55] Okay, uh, right, number seven, and this is something you might not think about.
[06:00] Maintenance and management fees vary, especially in properties with amenities like gyms, swimming pools.
[06:08] Although property taxes are low, it must also be paid annually, so.
[06:11] That's something you got to take into an account.
[06:12] Um, I once owned a flat, an apartment, we call it flat in the UK, an apartment in the UK, and I never made any money from it at all from the rent because I got charged a ground rent.
[06:23] I got charged a service fee for the car part, you know, painting the white lines.
[06:27] The agent never told me about it when she sold it, and I didn't look into it, so it was kind of my fault.
[06:31] But I do still feel she should have told me, and it's the same thing here.
[06:35] And I'll give you an example in this block where I am now.
[06:38] It's a bit of an older block; we have a decent pool on the roof, a nice pool, and there's a small gym.
[06:44] But I know for a fact, I don't know the one bedrooms, but for the two bedrooms in this block which are about 80 square feet, the owners have to pay the management company 90,000 baht a year, so well over £2,000 or 2,500, $400 something like that.
[07:01] So again, if you were going to go in, if you're seriously looking at buying a condominium here in Thailand, make sure you ask about the, make sure you ask about the prices for all the.
[07:11] Maintenance fees and everything very very important.
[07:13] You might not budget that in uh to your your original budget, okay?
[07:18] Number eight, due to low occupancy rates, property management may limit spending on maintenance and upkeep.
[07:23] Now th this can be a big problem in Thailand.
[07:26] So what happens again, they throw up one of these brand new condo blocks.
[07:30] Uh, it looks lovely when it's brand new.
[07:32] Uh, they're expecting to sell it out.
[07:34] They've put a price on the maintenance and service charge, whatever they charge.
[07:38] And for some reason, because it's saturated, they maybe have 30, 35% occupancy, maybe 40% if they're lucky.
[07:45] And what happens is they're counting on 100% occupancy or at least say 80% to 90% occupancy to bring in enough cash to maintain the building, paint the walls, the communal areas, the white lines in the car park again.
[08:00] Uh, just to maintain the building to a good standard.
[08:01] Now, if they're not receiving all the uh money from all the apartments or the majority of the apartments, then obviously they're going to scrimp.
[08:10] Uh, they're going to scrimp and.
[08:12] Try and save money and that there's not going to be as much money flowing, that's what I'm trying to say.
[08:17] And this is something you need to take into account as well because if you buy a brand new unit, uh, when you first move in it might look beautiful, all the, uh, the common areas look nice as well.
[08:27] And unfortunately, because the money isn't coming in on the service charges or management fees, uh, they just don't maintain it.
[08:32] And after 5 years you're living in a place that just doesn't look very nice at all.
[08:35] Okay, so you need to, uh, just make sure you're not moving into a half empty building.
[08:42] Um, uh, okay, we'll go into our number nine now, uh, rental prices.
[08:44] Now you might, uh, buy a property as I said as an investment and you want to rent it out.
[08:50] So, uh, the bullet point I've written here is rental prices fluctuate significantly between high and low season.
[08:56] So you know, you know in Thailand we've got two seasons, a high season and a low season.
[09:02] Now believe me, in low season it is very, very quiet, okay?
[09:04] The few, uh, the people who come here they generally, uh, stay in hotels.
[09:09] Now if you're looking at long-term rentals, if you invest in a...
[09:13] Property and you're you're hoping to rent it out long term, um, you're going to find it extremely, extremely difficult in low season unless you're lucky enough to get somebody in there in high season and they sign a one-year agreement.
[09:25] But there's a lot of people who, the people who move out here permanently, like I did, there's a lot of choice, okay?
[09:31] So that's something you got to think about, high season, low season.
[09:34] If you're looking at rental, uh, try to look into it during low season, not high season, because you might, you know, be overwhelmed with renters in high season.
[09:43] Come low season, there's nothing happening, and it's something a lot of guys get tripped up on that one, low season, high season.
[09:50] Um, right into our number 10, builders are increasingly, increasingly competitive, adding amenities like communal workspaces, infinity pools to attract buyers.
[09:59] Now, this is something you might not think about because they're building so many blocks all the time.
[10:03] Although the market is saturated, um, it is a buyer market that is saturated.
[10:07] They just continue to throw up these, uh, condominium blocks, brand new.
[10:12] Now what they have to do.
[10:13] Because they're not stupid, the tires are not stupid.
[10:15] They know because there's so many different companies setting up these um blocks of condominiums, they got to get the edge.
[10:21] You know, it's a competition.
[10:23] Are they going to buy from this company, or are they going to buy from that company, or the company over there?
[10:27] So what they're now doing, they're providing a lot more amenities in the building.
[10:32] So whereas when they built it they maybe have a standard pool, now they'll build an infinity pool and twice as long as what they would have done 5 years ago.
[10:39] Uh, they'll expand their gyms.
[10:42] They'll have common work areas for people who uh do online, um they work online rather.
[10:47] They don't want to sit in their apartment.
[10:49] They'll, they'll have you know online areas with free coffee on hand all day, that sort of thing.
[10:55] Uh, and what that will do, if you buy an apartment uh six seven years down the line you want to sell it, people will come along and look with all the other hurdles.
[11:02] They'll come along and look at your apartment and they'll say, "Well, he doesn't have an infinity pool, there's no workspace here, the gym's a quarter of the size of this new place."
[11:11] And the other place, of course, it will be brand spanking new.
[11:12] So again, this is another.
[11:15] Herdle put in front of you before you can, uh, you know, hope to achieve the sale on your property, uh, very, very difficult.
[11:22] Um, now you might, you might not have thought of this one as well, number 11.
[11:27] Sourcing reliable contractors for pain in its tasks, such as painting and decorating, can be challenging with quotes often inflated.
[11:32] Now, if you come in here to buy a property, uh, I, I would assume that you've been here many times on vacation, holiday, and you know what it's like.
[11:41] The two-tier pricing system here, we won't get into it today, that's not what the video's about, but they have a two-tier pricing system here.
[11:48] So if you go to a, a museum, it might be 40 Baht for a Thai to go in and 140 Baht for you to go in.
[11:54] And a great example of that is when I went to Koh Kood, uh, you go down to, to Rayong and then over to Koh Kood.
[12:01] When you get onto the island, you automatically pay a tax.
[12:04] It's, it's called, I forget the name of it, but it's for the rangers to keep the island clean.
[12:07] Uh, I went with a Thai person; the fee was 40 Baht and it was 100.
[12:13] From memory, I think it, no, it was 200.
[12:15] I think it was 200 bar for me, so there is quite a discrepancy as far as two-tier pricing goes.
[12:22] Now, it's the same when you want to decorate; say you have an apartment you've had it three years and you think, you know what, I want to have the lounge painted.
[12:31] It's very, very difficult to get people in Thailand to do it, although the labor's cheap here.
[12:35] Again, guys who have already got apartments and been through this, they're going to leave comments saying, "No, it's easy."
[12:39] But it can be very, very difficult because, one, the language barrier can be a problem, so you're going to find it hard to find these people.
[12:47] The other thing is, they're going to really inflate the price.
[12:50] I know one guy recently; he wanted to have some work done in his apartment, a couple of rooms painted.
[12:55] He got a quote and it was more than he would have paid in his own country because they turned up and said, "Aha, farang, we can charge what we want."
[13:04] Obviously, he didn't pay it, but that's another thing that you might need to think about unless you're one of those guys who can nip down to the Home Depot and buy your own paint and roll your sleeves up and do it.
[13:15] Yourself, if you don't mind doing that, then that's not going to be an issue for you.
[13:18] Excuse me, uh, right, number 12, uh, real estate agents may not promptly remove sold or outdated listings from their website.
[13:27] So this is another problem here.
[13:29] There's no kind of consistency with the agents and selling and renting properties.
[13:33] So what will happen is somebody will put a property up for sale and several agents will come along and say, "Oh, I can sell your property for you very, very quickly, faster than that agent."
[13:44] Uh, and what happens, the owner of the property is overwhelmed and they think, "Well, you know, if I've got two agents, they're better than one, four agents are better than two."
[13:51] And before you know it, there might be five agents selling one property.
[13:55] There, a little bit exaggeration there, but at least two or three agents selling a property.
[13:58] What they tend to do, they'll just, they go on to all the, um, the websites that advertise properties and they list these properties.
[14:07] And you might have four or five listings for the same property.
[14:11] Uh, the other problem is, so you're not dealing with one person all the time.
[14:13] You might call this company and then next.
[14:16] Time you get somebody else and then the other problem is of course um because there's there's no kind of consistency with the agents.
[14:21] Some of them a lot of them they don't bother removing the listens because what will happen it's in their interest to come to the apartment, take photographs, make a nice listing, put it up on several sites and if they get a sale they get their commission.
[14:35] But they're not you know as far as they're concern they're wasting their time going in and taking the time to delete it so it just becomes a big mass of confusion.
[14:42] You go onto a onto a um a property website like we all do having a look and maybe you want to buy something you see the perfect property you phone up and oh I'm sorry that's sold and it could have been sold 7 months ago uh so you know it's a real mindfield out there these property websites.
[14:56] I'm talking about sales mainly uh rather than um rentals.
[15:02] Um okay number 13 we're nearly there now.
[15:05] Selling a property within a short time frame such as after one or two years can be challenging due to market conditions uh and this is what I touched on before you know with all the the new properties.
[15:16] Uh, going up rapidly and also inflation problems in the economy.
[15:23] You know, if we have something like... if you want to sell your property and you want to... you have something not like... that can happen anywhere in the world.
[15:29] I'm just trying to think of a good example, but if there's something in the economy that's given a hiccups to the economy, I should say, then you know that could be another issue.
[15:36] Selling and you're in a foreign land, of course, it's not like you can... uh, you know, it's not like if you're in your own country you can just nip out in the car and be back in half an hour.
[15:46] Um, one I missed on the way up, number four, I missed this one.
[15:51] So, the proposed tax regulations, this has got a lot of foreigners, um, a bit hot under the collar, you could say, because they're introducing tax and even foreigners should have a tax code.
[16:02] Now, I'm not going to talk about that too much here, 'cause nobody really knows exactly what's going on there, but we do know that they're changing the law so that everybody pays tax, basic, like every other country.
[16:12] But the bullet point I wrote here was proposed tax regulations.
[16:17] On foreign investments may lead to high taxes on substantial incoming funds, potentially impacting property investment viably.
[16:28] So at the moment, as I say, nobody knows what's going on with the taxing system for sure, not 100% anyway.
[16:31] Uh, I doubt this will happen, but imagine you've seen the property of your dreams.
[16:35] You put down a quarter of a million baht as a deposit on a, say, 6 million baht property here in Bangkok.
[16:43] And uh, they changed the tax laws and they now say any money at all that you bring into the country, you have to pay tax on.
[16:51] That's going to be a big chunk of change, isn't it?
[16:52] So until that kind of settles down, it's probably a little bit unwise to go out and look for property at the moment, 'cause you never know, unless the money is already here in Thailand, of course.
[17:01] Okay, uh, this brings me to my last point at number 14.
[17:07] So at the end of the day, renting in Thailand is very, very cheap compared to the UK, uh, probably where you come from, US, uh, anywhere in Europe and Australia.
[17:16] Now I've got 51 square meters here, I'm.
[17:19] In the heart of Sukhumvit, I pay 20,000 baht a month.
[17:23] My rent's just going up next month, actually, after 2 years it's going up to 21,000 baht.
[17:28] Now that's the equivalent of just under £500, $600.
[17:31] You wouldn't get a rabbit hutch for that in London, and I'm not joking.
[17:34] For something this size where I live, you'd be paying thousands of pounds, literally, and I'm not exaggerating there.
[17:40] So the reason I'm bringing that up is, uh, I don't really see the reason for somebody wanting to purchase a condo.
[17:47] Okay, if you marry a Thai and you're in the position where you can buy a nice two, three bedroom house with a, you know, a garden, and it's on the land, it's in her name, you're married, uh, I can understand that.
[17:59] But to buy an apartment, um, they're so cheap to rent here wherever you go.
[18:02] And don't forget I'm in the center of Bangkok here.
[18:06] Uh, you go down to somewhere like, um, Hua Hin or Pattaya or even up north to any of the cities or towns up there, it's even cheaper.
[18:13] So I just don't really see the point in tying up 5, 10 million baht.
[18:18] Uh, it's going to take you a long time to get that money back, and unfortunately, unlike...
[18:21] The, uh, in the, I'll use the UK as an example.
[18:23] Unlike in the UK, you buy property and, generally speaking, uh, it goes up every year.
[18:28] So when you sell it in 5 years' time, it's maybe 30, 40% uh more value than when you purchased it, at least.
[18:34] Okay, that doesn't happen here because the market's saturated.
[18:38] You could own a property for 5 years and you just can't sell it.
[18:41] And I've known guys, uh, to take a hell of a loss because they just wanted to get away from it.
[18:45] You know, they just, they just wanted to, you know, I've had enough.
[18:48] I just, I need to get rid of this property, so they've taken a loss.
[18:51] And rental is a great option because it's very, very cheap, uh, you, you know, you, you come from another country.
[18:55] Like you go to an area like, say, where I am here in Bangkok.
[18:58] I've been here for 2 years now; I'm still happy with it.
[19:00] But there's guys who'll be here for a year and they'll say, "You know what, I don't like it in Bangkok anymore."
[19:05] I want to go and live by the coast or I want to go and live in another city like Chiang Mai or Chiang Rai.
[19:10] And now you're stuck with this property you purchase.
[19:12] If you've, you know, if you've rented, it's a month's notice.
[19:16] Uh, you'll have an agreement, of course; you have to wait till the end of your tenant's agreement, uh, but at the end then you can just pack your bags and you can.
[19:22] Move to wherever you want, so renting is a really, really good option in my opinion here in Thailand, much more so than buying property.
[19:28] And don't forget, when you buy properties as well, you're dealing with, uh, every, all the contracts are in Thai.
[19:34] You're dealing with Thai lawyers, and of course you can get them translated and you can pay for these services, but it's all extra cost, isn't it, which you really wouldn't take into consideration in your own country.
[19:45] Um, the last thing I'll say on this, because there will be guys who watch this as I say, and they'll think, 'No, it hasn't put me off, I want to buy a condo in wherever it is in Thailand,' and they will go ahead.
[19:56] So what I'd say to you, uh, my last point I put here: if you still decide to buy a property, make sure you check sites like Thailand Property for, uh, the go rates and see what other units are going for in the same building.
[20:10] Because at the end of the day, you know, if somebody puts an apartment, a condo, up for sale for, say, 4 million and you take it at face value, but actually all the other condos are 3 and a half million, then you're losing half a million baht for nothing.
[20:21] You need to check this out, uh, but I'm sure any, any.
[20:24] guy who's going to go out there and buy
[20:25] an apartment uh you know they're not
[20:27] going to go in blindfolded there are
[20:28] companies here who can help you look I'm
[20:30] not trying to be negative in this video
[20:32] as I said at the beginning I'm not
[20:34] saying don't buy an apartment I'm just
[20:36] saying if you come to Thailand you like
[20:38] what you see you want to stay here a
[20:39] long time and you've got your heart set
[20:41] on buying a property then go for it but
[20:44] just take all these points into
[20:45] consideration and don't go in
[20:47] blindfolded okay I hope it's been
[20:49] helpful guys good luck if you are going
[20:51] off to buying uh an apartment and um I
[20:54] hope the video has been helpful thanks
[20:55] for watching as always and I'll see you
[20:57] real soon
[21:04] you
[21:12] [Music]