Buying Real Estate in Thailand

Buying Property in Bangkok and Thailand

We have gained some personal experience buying and renting property in Bangkok, though we certainly do not claim to have the skills or knowledge of a real estate agent. Possibly you will find some of the suggestions below useful. They would mainly apply to renting or buying a condominium in Bangkok.
First of all, anyone can rent (we assume), but buying property has its limitations. Practically speaking, a foreigner can buy a unit in a CONDOMINIUM, but can not own free land (and houses). There is a rule that foreigners can only buy a certain percentage of the total area in a condominium. Foreigners may have ownership in a condominium unit in a proportion not higher than forty nine percent of the total SPACE (not number of units) of all units in that condominium. You can ask your real estate agent or the seller of the property whether you are eligible, but maybe it is more reliable to have it asserted by legal counsel.

Sukhumvit Road (as seen from Benjakitti Park) is popular with foreigners seeking to buy or rent a condominium.

As for being the owner of land and a house with it, this is a totally different matter. The simply rule is that a foreigner is not allowed to own it. Now, a quick review of websites will reveal that a big proportion of them are in the business of selling individual properties and pieces of land. What about it? Well, they often try to circumvent the law with what can be called a 'legal construction', like setting up Thai companies. This looks to us like wheeler dealer activities and we would advice against it. The Thai government agencies seem to be currently and persistently looking into this matter, and who knows what happens. You may in the end not own what you paid for, or get into a lot of legal wrangling.

There may be ways around it like LONG-TERM LEASES of land, but you will need to have a long talk with a real estate agent, to figure out further details.

Further comments apply to buying a condominium unit only :

For most people, buying a property takes a large chunk out of their assets and savings, and should be considered wisely. After being in a long slump (this was actually a good time to buy) prices have climbed up again to levels that now are much higher than before 1997 (the time of the Asian crisis). It is very common to hear prices quoted or mentioned in the 100,000-150,000 baht per square meter range for centrally located new condominiums.
Of course, end 2008, the world and likely Thailand entered into a recession, and property prices (as well as new constructions) are likely to stall.

At the same time, we have the feeling that renting costs have not gone up nearly as much, so the balance tills in favor of renting a property rather than buying one at this moment (update December 2008).

Of course, there are other factors involved, having a property of your own (that is paid off), gives some feeling of security, and you can modify your condominium to your own desires.
When buying, location is of course the most important factor. This is especially so when you expect to make a profit by selling it in the future, or if you want to rent it out to other persons.

Along Ratchadapisek Road, Bangkok

One important thing to remember : When buying a property, you will in general have to prove that you have brought in the money involved from abroad. Banks have special forms to fill out for this purpose. So when you bring in the money to a Thai bank, with the purpose of using it to buy property, be sure to make it clear to your bank.

Personally with the experience we gained, we would advise against property that is not built yet (of course). At least in the recent past, some developments went broke, and quite a few people lost a lot of money. There is a problem of long-term maintainance with properties in Bangkok that you should be aware off. While essential repairs may well be done, overal appearance of a building may deteriorate in a few years time. We noticed that some properties are very well maintained, but others, once prime property, seem to be allowed to slide into second-class real estate. This of course will depend on the management of the building, and on the residents staying there. Yearly meetings (where you do have voting rights) will be held, but often the money needed to keep up a building, might be used for other purposes. Furthermore, you will have little control over what happens around your property. A garbage dump or a slum may develop just around the corner. Thai people seem to more easily accept this. As long as it looks all right inside the home, who cares what is going on outside?

A Juristic Person (elected by the condominium owners) with staff will usually manage the building, with help from real estate management companies. Management of a building may often change, with as a side-effect that there is less long-term planning and management. Some persons, owning a unit in a condominium, will refuse to pay maintainance fees as long as they do not live there themselves. This of course is illegal, and reduces the money available for maintaining the building. From our experience, it is very difficult for a Juristic Person to force people to pay their dues.

Typical condominium building on the outskirts of Bangkok (this one at Central City, Bangna)

As for maintaince fees, they are usually charged by the month, and the amount is decided in the yearly meeting of the owners. A fee higher than 30 baht per meter per month, is possibly high, but all depends of course on the value of the property itself, and the need for important repairs. Actually, in Thailand, it looks like people can cough up quite a few million baht to buy a property, but then do not want to spend a few thousand baht a month to maintain the value of their property.

If you own a property, you will also be liable to pay a property tax. The amount of this tax depends on the estimated value of the property. You should check how much you will have to pay, though the rate may go up in the future. Our experience tells us to expect between 10,000-20,000 baht a year for a two-bedroom unit.

As for other costs, you usually will pay the 'real' price, or something close to it. This can make a substantial difference in electricity costs (as compared to when renting a property).

We advise that besides a real estate agent, you use the services of a law office, before you make a property purchase.

One last note : After living in a home or condominium in Thailand for 5-10 years, you most likely will need to have some repairs done and/or renovate. For example, kitchen and bathroom tiles, bathroom fittings, and the like, may not last as long as they would in Europe. In our experience, this can become a small financial burden. Redesigning a kitchen or bathroom can cost you a lot, and we have the impression prices may be higher for foreigners. A reasonable service may be offered by HomePro, the labor costs they charge seem to be acceptable.

Continue reading : Renting Property in Bangkok