hhfarang wrote:I started out with a value of 18m baht (in USD) in savings and a lifetime pension with a value of 120k baht per month (in USD) and a 2 rai building plot already bought and paid for here in Hua Hin ... nearly eight years later my savings are nearly exhausted, that pension is only worth 80k baht per month, and my biggest asset is a house that I've been unable to sell at a 30% discount. What I didn't plan on were... (3) the rapid gain in popularity of Hua Hin that started at approximately the same time I moved here that has caused a cost of living increase locally of (I believe) around 15%; and (4) the worldwide crash in economies, especially housing that has made my biggest asset increasingly non-liquid.
HHF, item (3) should work in your favour with your land, yes food/drink/shopping has gone up 15% (we can compensate for that a bit by eating/drinking locally or at home), but the benefit is that rents in the tourist market (small villa with pool, not too far out), have increased 70% or so. If I was you I'd be getting something like this underway. Re: item (4) you can get liquidity from property very quickly here, 4 weeks or so, banks will loan 80% LTV, but imo value properties around 75% to start with, so the 80% becomes 60%. They want charge over land title obviously, but no pay slips/tax receipts needed by wife, you just 'create' a business, it's almost all about the bank books being busy with daily activity. Regular ATM visits to shuffle the deck, is about it. You'll likely get the loan because of your farang income, not refused in spite of it.
You may spend 2.5m Baht on each build, pool, fitting out, but it's a 5-6m Baht property (sure, it's a different matter actually selling it), but it gives you handy additional income, 60-70k/month combined for both, allowing for 9 months occupancy & finance payments. Also gives you flexibility of borrowing/sale for any future disasters, plus it'll make your own more marketable. I'm not saying this because we built to sell here, priorities changed to renting for an income well over a year ago, I'm saying it because to me it's the single biggest part of this whole unknown quantity of how much we will need in 15, 20, 25 years time. Property costs is the one thing that always outstrips income/inflation/saving rates over the long term.
I'm astounded people shrug off the idea of owning your own property and feel they'll be better of renting, if you're not selling up back home then I wouldn't suggest that, or say if you're like Korky and in the business of the financial markets, and skilled, confident enough to get those better returns then that's different, I wouldn't have a clue.
And we're only talking here about where it's a choice to buy or not, I just can't see what future benefits, options, flexibility renting gives. Every which way I calculate it, based on modest historical averages etc, it all comes back to this, if you opt to put the purchase capital cost, 3m, 4m, 5m Baht or whatever in a savings account it would be doing very well to maintain it's value in line with inflation. But each year you need to drawing down maybe 6-8% to pay the rent, so the pot get's reduced... and it all runs out around year 11 or 12. Say 15 years with a prevailing wind.
After 15 years the rental pot is empty and all you have is monthly commitments that historically will be getting more expensive in relation to your pension income, and we're only talking about if it's an option on the table here, but if I chose renting I would probably
'have' to walk away from my wife & kid (insert future wife, girlfriend, kid) in 10+ years time if we separated and leave her with next to nothing because I need to survive myself. wheras if we had a property we could come to an arrangement. How is choosing the option that doesn't allow me to sort her out the right choice? Someone point out what I'm missing here please?
There's so many possibilities that can occur, and most of them have to one of or other...
- We never planned on a child at all in our planning and we were 37 and 30 when we came over, how many guys in there 60's have young kids here
- Income from overseas crashes 25-30% due to currencies
- Income from business here drops to next to nothing due to recessions
- You get divorce/partner passes away and 5 years down the line you have a new love 20 years younger, you want security for her when you go.
- Triple heart-bypasses, homecare costs, blah blah.
- So many plan on small-business here to provide 'beer money', they're all struggling like hell now
My missus had a nice little out of the way bamboo 'restaurant/cafe', that was enough for her needs but had to close it due to no visitors. A property would be a hedge against all this stuff, don't allow for it at your own peril. Forget the developer pitfall issue, don't buy from a developer we're hopeless, but a bargain reslae (on a finished proect if you want project), buy a larger land plot outside a development so you can build a small place to live in for 1 million Baht if push comes to shove, and rent/sell the main house. Or a house with space to build a self-contained unit on the side, to rent or live in yourself. There's always the option of borrowing too if you have collateral.
Good luck, and sorry for rambling on
SJ
, this is your disposable pot but you still need to have assets (house(s)) preferably 2 one in HH and one in homeland
), my savings are nearly exhausted, that pension is only worth 80k baht per month, and my biggest asset is a house that I've been unable to sell at a 30% discount (of the local realtor appraised value at the time construction was completed) in this market. 
