Most expats have thought about buying a condo in Thailand at one time or another.
After all, it's one of the few things that can make one feel truly at home in a country with fairly strict laws on land and property ownership for foreign nationals.
Foreign nationals are permitted to buy a condo (freehold) without restriction, but only in a building where more than 51% of the total number of units are Thai owned, otherwise foreign nationals are restricted to a leasehold condo.
Moreover, many of us come from countries where ownership is the ultimate goal, and renting is seen as throwing money down the drain.
Indeed, buying a condo seems like the logical thing to do, especially if you are staying long term or visiting the same province three times a year and splashing out on hotels.
But only fools rush in, and I'd advise caution – because there's a bucket load of things you need to consider before signing on the dotted line for your slice of Thai pie.
Before we get started, it's worth me noting who this post isn't for.
This post isn't for anyone who has so much cash that throwing down 5-10 MB+ for a condo is a mere drip in their champagne glass.
If you don't give a monkey's bottom whether you see a return on your money, whether you're being blinded by marketing ploys, or whether unqualified builders built your condo, stop reading now. You're going to buy a condo regardless of my advice, and probably a speedboat, too.
This post is for those who have a modest amount of money, with the vision of having a future here, or at the very least a holiday home.
It's also for those who might be considering a condo as an investment.
Now that we're clear, let's start!
Contents
1. How Big is the Rabbit Hutch?
No one wants to live in a rabbit hutch. Image credit: nydailynews
It's no secret in the Thai property industry that a condo block close to public transport links, the beach or local nightlife tends to have smaller units at an inflated price.
People pay over the odds for convenience and often end up making sacrifices that later down the line they usually regret.
Just a few weeks ago a friend and I went to see a condo in Ekkamai, Bangkok. The said condo was 2-bedroom, approximately 60 sq. m., 35,000 Baht a month.
During the viewing, the landlord showing us around mentioned she had other condos, one of which was nearer a station (On Nut station). She explained that it was 41 sq. m, two bedrooms, for 30,000 Baht a month.
We'd already turned our noses up at the size of the one we were viewing, but 41 square meters! How do you fit two bedrooms in that?
The lady went on to explain the market and how developers were increasingly making condos near stations smaller to maximize profits and squeeze higher prices out of buyers/renters.
Land in premium locations is scarce and expensive, which means condo buildings are getting taller and the number of condos in a block is increasing to maximize space.
But here's the crazy thing: The condo we were viewing was only 6 or 7 minutes walk from the station.
So, just by making the sacrifice of having to walk an extra few minutes to the station, for not even £100 more a month, we could have 21 sq. m. more space.
If we were buyers, the difference could have been as much as 1.5 MB.
2. Would You Pay This Much Back Home?
Here's a simple technique to find a great condo in a suitable location.
Wherever it is you want to buy, start your search from the most convenient or attractive part of the area, be that the station, the beach, the shopping mall, wherever.
Gradually work your way backwards noting prices, until you get to a point where you say, “Hey, that's too far to walk”, or, “I can't be doing with that motorbike taxi ride every day”.
I know you're excited about living in Thailand or owning a holiday home, but as we all know, Thailand has a way of blinding us to certain realities.
Compare the equivalent to your home country.
For the UK I usually add 2/3 to the price. So if it costs 3 million Baht it would be about 9 million back home. Would you shed out the same money back home for an unfurnished apartment, that small?
Make sure you do the math. What often seems cheap in Thailand isn't all that cheap when you make a market comparison. Compare how much you are paying per sq.mt with what you'd pay back home.
Factor in the relative price. If you are paying 5 million Baht for a condo here, the same would be at least 10-15 million Baht in a major city in the UK or US.
Also consider the long-term ramifications:
- Will you and your partner be getting under each other's feet all the time in such a small place?
- It's big enough now but what if you decide to have a kid? Perhaps you have a baby now. They don't stay babies forever. Will this be enough space?
- If you're a singleton, is it big enough to rent a spare room or have people over to stay while they're on holiday?
- It looks spacious on the plans but how much stuff have you got and how much are you likely to accumulate while living here?
- Won't you want a bigger balcony to sit out on?
- Do you really want to look out at that main road every day?
- Having a gym upstairs is great, but will those 10kg dumbbells and two bikes really suffice?
3. Are You Buying a Condo Built by Mr O' Rilley?
“I thought you said a wall Mr Fawlty?”
If you're a Fawlty Towers fan then you'll be familiar with the building work of the jolly Irish builder in the picture above, Mr O' Riley.
Humour aside, the build quality of condos in Thailand isn't always up to scratch.
Even those developer brands touting their work as “European standard” have a lot to answer for, particularly when you take a walk past the site and see the dubious hammer and chisel techniques on display.
I remember a friend visiting from the UK sometime ago. A roofer and plasterer by trade, he was gobsmacked by what he observed on the building site opposite his hotel.
At times he'd sit by the pool muttering, “What the?” “What is he doing?” “No, no, no, you can't do that”!
I don't blame the builders, though. In fact, I admire them.
The majority have no formal building education to speak of, the tools they are given to do the job are inadequate, and their lives are treated with such contempt that when it comes to safety standards and wages it's a wonder they manage to make it from one job to the next.
But let's get to the ethics of the Thai construction industry later.
Some, not all, condos experience build problems in the first few years of operation. If you're lucky you'll escape with the simple stuff:
- The low quality materials used for the facia of the building will fade under the glare of the sun.
- The cheap tiles used to lay the flooring in the hallways and your apartment will crack on poorly laid floors.
- Walls will crack due to poor plastering (can be due to movement and is not always something that can be helped).
- Fittings will wear quickly or break.
- Cheap paint will wear fast.
- Roof/window leaking issues during rainy season, as a result or poor workmanship or cheap materials.
If you're unlucky there could be more serious issues with subsidence.
An apartment project in Pathum Thani subsides.
Don't get me wrong, nearly all condo buildings stand the test of time (except the one above, of course) in that they don't fall down.
However, cheaply decorated condos will require on-going maintenance work that you may not have expected to carry out so early on.
Of course the advantage of renting is that this cost is picked up by the owner of the condo block or individual unit you are renting .
Don't get me wrong, not all condos are built will cheap materials. But have you researched the materials being used to build the condo you want to buy?
The fact is, if you're planning on paying 2.5MB for a 33 sq. m condo built with paper-thin walls, the cheapest floor tiles from HomePro, and a single kitchen hob, then you're getting shafted.
Cheap fittings don't last and break. They need replacing. It's not just the expense, either. It's annoying!
4. Are You Happy Paying an Inflated Market Rate?
Every real-estate agent in Thailand will be all over this post telling me that the market is booming and 6% yields on rental properties are common.
And you know what, they're right – if, that is, you are Thai and bought off plan with a heads-up from the developer.
Here's a quote from the NomadCapitalist who knows a fair thing or two about property markets and their “legal scams” in Asia:
Here’s one way Thais are playing the real estate market in Bangkok. Connected Thais will find “off-plan” condo projects in areas along the Skytrain line, such as Sukhumvit or Sathorn in Bangkok. Developers require ten percent of the condo price down at signing, which can be paid in installments over one to two years. That means a 500-square-foot, $200,000 condo can essentially be optioned for about $1,000 a month.
The plan in this scenario is to do an off-the-books sale of the purchase contrast to a longer-term investor (or sucker) once construction gets underway. Considering condo prices increase as much as few percentage points per quarter once it goes “on plan”, Thai investors can as much as double their out-of-pocket investment before they flip the property. And because it was off the books, they avoid taxes or much scrutiny.
Such opportunities are not as open to westerners. You have to be connected, and Thailand is very proud of the fact that it was never colonized by any European power. That means no foreigner is going to penetrate their inner circle.
(Quote source: Nomad Capitalist)
Ask yourself this simple question: why are there so many condos sitting empty in Thailand, particularly in Bangkok?
The owners would rather have them remain empty than drop the rental rate. Seems strange.
I will tell you:
Because, considering the points made above, these twilight investors are prepared to take a hit on a few units for the sake of keeping the market artificially inflated. The inflated prices enable their investments in off-plan condo blocks that get flipped off the books at double-bubble.
5. Is It Really a Good Investment?
I nearly did it once.
Five years ago, a friend and I slapped down a deposit on a condo in Koh Samui. It was to be a holiday home-cum-rental opportunity.
We justified our spontaneous purchase on the continual growth of the island's economy, and the fact that friends could rent it when they came out for a holiday.
Sadly my friend went home after his holiday, took off the rose-coloured glasses and figured that the cash would be safer in an ISA.
He was probably right.
In some ways I wish we'd gone ahead, not least because I'd have a cool little escape in Samui and because market prices have increased since then.
Looking back, I think we would have made our money back eventually by renting it out, especially with the rise of AirBnB and online rental platforms.
However, the reality is that we probably wouldn't have been able to resell it.
The sheer abundance of new builds means the rental market is highly competitive and you need to offer up a cheap deal to make sure your gaff is full all year round.
Not to mention that I can book a decent hotel on a deal from Agoda or Hotel.com for 1, 500 Baht a night if I do want to go there for a holiday, hassle free.
Consider this scenario…
When you buy a property in the UK, even if the market crashes post buy, if you hold on for 10 years, you'll still end up getting more than you paid for it, and in most cases make a profit.
Moreover, you will be able to rent the property and make a good yield, regardless of resale market conditions. The crash and climb of the 90s and of the mid 2000s has proven this to be true.
This is not the case for condos in Thailand.
As mentioned above, the money is in knowing the man who knows the man, in investing off-plan before the project is announced and flipping off the books.
Buying a condo to rent out for profit is risky at best, unless of course you have a contract with a multinational company that wants to rent your place for staff, or a similar scenario.
And here's why:
Condos for rent are two a penny. The sheer abundance of choice makes it a renter's market.
While your condo might be a popular rent when it's brand new, when ten new blocks go up in the same square mile over the next few years, you'll have to reduce your rental price to compete with the fancy new kids on the block.
Once your air-con unit starts looking shabby and building facia has faded, your condo will be way down on the list of units that would-be renters favour.
Of course, there are exceptions.
For example, buy a 38 million Baht penthouse on Soi Ruamrudee in Bangkok and you might get 250k+ a month for as long as the big banks and embassies are still in the area – even when the block is a little dated.
But I don't have that sort of cash to shed out, do you?
On an average condo it is far more risky.
Let's say I buy a 3 million Baht 1-bedroom condo, fairly near a BTS station in Bangkok. I rent it out for 20k a month and it's always occupied.
It would take me 12.5 years to make my money back, let alone a profit.
Now, tell me, what are the chances of always having a tenant?
And when those 12.5 years are up, what are the chances of being able to sell the condo for more than I paid for it?
And if I did get my 3 million Baht back, the value of that money will have depreciated anyway.
Oh, and you have to pick up all the maintenance fees, too.
Some would argue that I'm wrong.
If I continued renting out the condo for another 12.5 years, even at a reduced price and low occupancy, I could make around 2 million Baht over 25 years, and still own the condo at the end of the term.
That's around £45,000 at the current exchange rate. Surely that's not bad, for one investment. Moreover, even if I sold the condo after 12.5 years for 2 million Baht, that's still a good return.
What do you think?
6. Are You Being Blinded by Furnishings You Won't Get?
The showroom condo might look like this, but you'll probably need another 1MB+ for this level of furnishing.
I'll never forget the time I accompanied a condo-buying friend to a showroom in Tong Lor, Bangkok.
We were given free smoothies and chocolates, just for looking around.
It was five-star treatment that made you feel like you'd won the lottery, and that “buying one of these condos is the missing piece of your life”.
We were showed around a beautifully decorated condo. It was small but felt cosy and looked really well-finished.
Then it struck me to ask the sales lady, “So which type of unit comes decorated like this”.
“None sir. This is just for show”.
I'm not kidding. From the kitchen units down to the silver plug sockets, you didn't get any of this decor for your 6 MB.
I finished my smoothie, drinking down the realization that the entire setup was an oasis.
They'd used a European fitted kitchen and other high-end furnishings that would cost the price of the condo itself to buy and fit (properly) in Thailand.
Without this stuff, it was a mere hamster cage, without the pretty running wheel and drinking bowl.
So, before you put that deposit down, make sure you fully understand what, if any, furniture and fittings you will be getting. And at what price the top-end stuff in the show home will set you back post-purchase.
7. Is Your Deposit Refundable?
Question: Name a way to make money out of building a condo block other than selling the units?
Answer: Get truckloads of people to be so overwhelmed at the prospect of a free iPad and “special price today only” that they leave deposits with your commission-hungry sales staff.
Believe or not, condo developers in Thailand make millions of Baht every year from non-refundable deposits.
First they lure you in with as much free water as you can drink and a few snacks and smiles from some extremely attractive “pretties” (before the feminists hang me for using that word, it's not something I made up. This is a real term used in Thailand for women who stand at sales events looking pretty).
Next they show you the amazing decor you won't be getting. And lastly, they tell you that the “today only” price is yours for a small 20,000 Baht deposit – if you “just sign here, sir”.
Do yourself a favour and make sure the deposit is refundable within 14 days (or other negotiated period). Get this in writing. Or, if you can afford to throw away 20k, go ahead and enjoy another free bottle of water.
8. Is Your Dream Condo Part of a Condotel?
A condo hotel, also known as a hotel-condo or a Contel, is a building, which is legally a condominium but which is operated as a hotel, offering short term rentals, and which maintains a Front Desk.
This little detail often comes as a post-build shock to those buying in the early stages of construction. It should be stipulated in the contract but is easily missed or conveniently left out.
So what's the problem?
Well, unless you fancy herds of tourists around the pool, coach parties gathering for trips in the lobby, sex tourists shaking the floorboards at all hours and the perpetual feeling of staying in a hotel, I'd enquire as to how many, if any, of the condos in your block are to be set aside as hotel/short rent rooms.
Maybe you aren't bothered about living in a condotel, but it's worth asking about, and you really should be told if units are to be allocated for this purpose.
9. How Do You Feel About the Thai Construction Industry?
Low pay, poor safety standards, lack of equipment = sub-standard building
Thus far, this post has been all about the reddies, the wonga, the Benjamins, the best bang for your buck and how to make sure you don't waste your hard-earned money on a condo that's not right for you.
But what of the workers who build the condos?
What about the unscrupulous developers who cut every possible corner, including worker safety and paying below the minimum wage to unregistered immigrant workers?
It's rife.
I've been observing the building of a massive condo development near my home for the last year.
Every day I see the workers shipped in from their campsite/worker digs in what look like WW2 trucks, stuffed over capacity and the workers forced to endure the black smoke pouring out of the exhaust.
It's a painful sight.
To their credit, these men and women have built an amazing two building complex with very few power tools.
Usually armed with little more than a hammer and chisel, they scale the structure dangerously, day and night, rain come shine, to erect condos they themselves will never be able to afford – not that they'd want to pay such an extortionate amount of money for a tiny space in the middle of the sky.
Thinking about it, knowing what the materials cost and what they get paid, they're probably having a good laugh at us for paying so much!
But seriously…
When you employ the cheapest labour you can get, based solely on the fact that the workers don't have the qualifications to ask for more, or the voice to be treated fairly, and you give them the bare minimum of tools, making it extremely difficult to do the job, it is, in my opinion, slave labour.
As for worker safety, you only need to look at the flip-flop-blessed feet navigating the wooden scaffolding to make a judgement on how much the Thai construction industry values the lives of its workers.
I'm not trying to start some sort of “farang union” here, but I believe in fair.
The workers should be given better training, better tools, more money and be better protected by health and safety standards.
I don't know about you but it makes me feel uncomfortable seeing people treated this way, and a free Samsung Galaxy and a couple of bottles of water won't make me forget these facts.
In Summary
Buying a condo isn't a bad thing. If you know exactly where you want to live in Thailand and have the cash, then why not.
If you're buying with a view to living in it for the next 25 years, then you will likely make good on the investment versus what you would have paid in rent.
It could be difficult to sell, though. Always bear that in mind.
It's a buyer's market and you probably won't make a profit. If you suddenly need to leave Thailand, or want to move area, a quick sale will likely be to an investor at a below market rate.
The key takeaway is to not rush in. Renting is cheap in Thailand, and you're spoilt for choice when it comes to condos. Take your time. Rent a while and live in a few different areas before making a decision.
——
Got a condo-buying experience to share? I'd love to hear about it below in the comments section.
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Last Updated on
ronald Fleming says
Apr 23, 2024 at 5:26 pm
Peter K says
Sep 01, 2022 at 10:53 pm
Phuket says
If you can buy a freehold for local prices the ROI is not to bad as well if you sublet. But that is quite long down the road and if you borrow to buy it will be very hard to turn a profit.
Sep 02, 2022 at 7:18 am
Mistake says
Sep 02, 2022 at 6:16 pm
TheThailandLife says
Sep 02, 2022 at 7:06 pm
Mistake says
Sep 02, 2022 at 7:22 pm
John says
When buying a condo, and before closing, will the juristic office provide a copy of the annual condo report if requested? Are they required to?
Thanks for your help, great site!
John.
Nov 15, 2023 at 6:36 pm
Mica says
May 27, 2022 at 2:50 pm
TheThailandLife says
May 27, 2022 at 4:42 pm
HAROLD W ROONEY says
Apr 20, 2022 at 12:40 am
TheThailandLife says
Apr 20, 2022 at 3:42 pm
Harold Rooney and Sonja says
Apr 20, 2022 at 8:16 pm
Mistake says
Apr 21, 2022 at 2:48 am
Peter K says
Sep 04, 2022 at 11:44 pm
Thomas says
Dec 05, 2022 at 12:24 pm
Ken F says
Oh, one more thing. If you are looking into condo rentals in Thailand online be aware that they tend to not remove listings even long after they are rented (at least here in Phuket). When I moved back here last year I ended up wasting A LOT of time foraging for places I liked online that were within my budget only to find that none of them were ever actually available. Finally I got fed up and decided it would be easier just to contact all the realtors and ask what they had available in Patong, which at the time was pretty much nothing other than a few obscenely overpriced places. There is certainly no shortage of condos in Pattaya though so you should have plenty of options there I would think.
Dec 05, 2022 at 11:18 pm
Mistake says
Jan 30, 2022 at 1:10 pm
John says
Ontop of that a potential buyer who does a due diligence check will find out about the out standing maintenance fee too and there for might pull the plug with proceeding to buy your condo .
My best advice for you ,
1. Read the complete Thai condo Act .
2. Read the rules and regulations of your condo
3. Read The rental agreement
4. Read your purchase agreement
Jan 30, 2022 at 10:59 pm
Mistake says
As soon as I received the notice that I hadn't paid on time, I sent them the payment. How I became aware that I was "late", was when I inquired about my January 2022 rental guarantee payment that I didn't receive. That's when they informed me I was in "default."
I've read my contract, and rules, but not the complete Thai condo Act. It's obvious that they're trying to stiff me on my payments. I'm just curious if hiring an attorney will work out favorably for me, or is it a waste of my time and more money. We all know there is an element of corruption in Thailand, but is it that bad a meager condo invester can't get a simple justice?
Feb 02, 2022 at 2:15 pm
john squire says
Lets go back to failure to pay maintenance fee...normally this would have been taken from the guaranteed rent payments being made to you. It might well be that the management did not want you to pay the money so they could use your none payment as an excuse to not pay you the money they owe you
Jan 31, 2022 at 7:38 am
Mistake says
Their reasoning for suspending the rental guarantee wasn't due to covid. They stated because I paid the maintenance fees late. I wasn't initially informed of when the payment was required. I only found out after they emailed me a notice one month after it was due. I'm still well within my rental guarantee timeline, so it hasn't expired. You mentioned any fees would normally be subtracted from the guaranteed rent, which is what I thought could potentially catch any fees I may have missed, if I ever did. Another point you mentioned, that I also agree with, is they most likely sent me the notice late, so they could say I was late, and void the rental guarantee portion so they don't have to pay me, but still collect rent from the current tenant. When covid first hit, I was weary that something scandalous like this would happen. And it did. I'm curious if hiring an attorney to mediate this or take it to court is worth it.
Feb 02, 2022 at 2:07 pm
john squire says
Feb 02, 2022 at 6:06 pm
Mistake says
I was actually planning on going to Pattaya in July 2020 to sell my condo, had my flights and lodging all lined up....but that darn Covid showed up and ruined it.
Feb 05, 2022 at 11:56 am
john squire says
1) changing/falsifying my complaint and then saying my complaint was a lie
2) sending my mother's will to the wrong address and then physically throwing me from the office because i called them stupid
3) claiming i was lying about not receiving legal papers ...then it was discovered the lawyer had put a uk domestic stamp on the envelope to pay for postage from uk to thailand
4) On three occasions i discovered my lawyers were helping the other side
5) On one occasion I did my own conveyancing the vendors lawyer purposefully made mistakes in order the conveyancing would fail......After I forced them to correct their mistakes they then admitted to making a mistake calculating the money i owed, and that they owed me 200 euro but would not pay the money they owed to me because I was not a qualified lawyer
Feb 06, 2022 at 3:55 pm
Mistake says
I hope I can find a competent lawyer, and get justice. Usually these companies have connections and justice for the victims doesn’t happen. I just don’t want to waste more time and money.
Feb 07, 2022 at 6:19 am
john squire says
Property managers have a lot of contacts and you might suffer the same as me ie you might employ a lawyer to help you and later discover said lawyer decided to act for you and the people who are causing you problems
Feb 07, 2022 at 5:02 pm
john squire says
Oct 19, 2021 at 11:01 pm
Matt says
Oct 20, 2021 at 12:56 am
PeteBKK says
The owner of each condo unit pays common area fees whether they stay in the unit or not. If they fail to pay they will be charged interest on the arrears and will not be able to sell their condo until fully paid up. Some condos will also shut off water supply. All on these "rules" are stipulated in the "Condo Regs" that gets lodged with the Lands Dept when the condo gets registered with them. Be mindful however that it is the condo developer that writes these regs and many clauses can, and will be illegal to favour their interests not yours! They can even write that they will not be liable for common area fees! To get any obviously illegal or unfavourable clauses changed or deleted requires the consent of the Juristic Manager and/or a 3/4 majority vote in the AGM. For newly constructed condos the developer typically appoints their JM stooge and dominates the AGM as they will still own most of the floor area of the condo and therefore maintain majority voting rights. It's a Catch 22.
As mentioned for a newly constructed condos the developer must register the completed condo with the Lands Dept (to obtain title deeds etc) before commencing condo sales and therefore they will own all the unsold condo units. From the date of condo registration they then required by law to pay the stipulated common area fees for the unsold condos. HOWEVER typically the developer will set up a subsidiary company (under another name) who will manage the condo -at least initially - and be the body to bill and collect sinking fund and common area fees. So it's a case of the fox guarding the henhouse. ALSO, as the developer typically will own most of the condos at the start they have a majority of voting rights the AGM to 'install' their own people as juristic manager (the guy who signs all condo service contracts and legal docs in the name of the condo, including appointing an annual audit company) and 'install' condo directors who re typically employees in the developer's company. Other unit owners are none-the-wiser who these directors or managing company really are because they are all new neighbors and don't know one another.
Jan 12, 2022 at 1:44 pm
john squire says
Oct 19, 2021 at 10:51 pm
TheThailandLife says
Oct 20, 2021 at 12:02 am