Cost of living in Hua Hin

[migrant]

Owning vs renting an be tough. I'm an owner by nature, bought my first house at 20.

But when we come to Thailand I will sell here, and rent in Thailand.

I'll sell here because the house is too large if I do come back.
I'll rent to make sure living in Thailand will make us happy, but plan on eventually buying, I like the security of not having a landlord dictating my lifestyle. Thailand's Tessaban tax is much easier than the $5,000 I pay yearly here!!

As said before, each individual is different, we want to travel around Asia, go back to the States once every year, or so, and eat out periodically. The wife is content with Thai food always, but I like my variety.

Like Buksida, I'm not a golfer, but hope to use the dive gear often!

[Korkenzieher]

@Whaler - On the property thing. It is simply about 'efficient' portfolio design and calculating a minimum. I am not advocating that everyone sells up! But owning property, particularly in a foreign land (well, different to the one you are in even if it is very familiar) introduces those risks - interest rate, currency and worst of all liquidity. You could be a property millionaire in the UK, but if you can't liquidate cash then you can't eat in Thailand. It is only about knowing and understanding that - as I discovered to my own cost!

There's a point at which you have enough money that you just don't have to care. Once you get out of the bit where your portfolio has to be 'efficient' then things change. Obviously buying rather than renting is relative protection against long term rent inflation; if you are being taxed on savings or investments at home, it can help to reduce the total pot so that you aren't paying rent out of taxed income. But it still introduces the illiquidity aspect. All of these variables are relatively easy to look at in spreadsheets though becoming comfortable with it takes some time. But we are getting pretty close to 'philosophical discourses on the Efficient Market hypothesis' here, and that is probably best done over a beer!

[hhfarang]

SJ, I love your satellite images both current and future possiblities! You are a Super sleuth as well as a Super Joe.

But the pool blocks the entrance to my garage!

[Whaler]

and that is probably best done over a beer!

Or two

[hhfarang]

I'm not advocating renting over buying. I prefer to own, and have since my mid 30's, but think about the future and don't over extend yourself and become "house poor"; a term my Dad used to use which means people invest more than they should or can afford in a house and end up trapped in it for lack of disposable income (due to the cost of the house or monthly mortgage).

With millions in past years that has meant taking an adjustable mortgage that they couldn't afford after the upward adjustment in a year or three. Where they primarily went wrong was that they assumed that the value of the home would increase to the point where they could refinance when they needed to to cover the bad mortgage when the rate increased. Problem was in most places house values actually fell leaving people in a situation where they couldn't pay the mortgage and the home is not worth what was still owed.

Here, since most pay cash for a home and have no mortgage (I think) that part is not a problem, so if you can simply buy the smallest or least expensive home you can afford (and be happy with) without breaking the bank, I think that is a better option than renting. Just don't tie up a major portion of your assets in it, especially if you are retired and on a fixed income.

[Siani]

I'm not advocating renting over buying. I prefer to own, and have since my mid 30's, but think about the future and don't over extend yourself and become "house poor"; a term my Dad used to use which means people invest more than they should or can afford in a house and end up trapped in it for lack of disposable income (due to the cost of the house or monthly mortgage).

With millions in past years that has meant taking an adjustable mortgage that they couldn't afford after the upward adjustment in a year or three. Where they primarily went wrong was that they assumed that the value of the home would increase to the point where they could refinance when they needed to to cover the bad mortgage when the rate increased. Problem was in most places house values actually fell leaving people in a situation where they couldn't pay the mortgage and the home is not worth what was still owed.

Here, since most pay cash for a home and have no mortgage (I think) that part is not a problem, so if you can simply buy the smallest or least expensive home you can afford (and be happy with) without breaking the bank, I think that is a better option than renting. Just don't tie up a major portion of your assets in it, especially if you are retired and on a fixed income.

I agree....Wise words of wisdom

[STEVE G]

....so if you can simply buy the smallest or least expensive home you can afford (and be happy with) without breaking the bank, I think that is a better option than renting.

That's the conclusion I've come to; I've been renting a house in Hua Hin for eight years and I've now decided to build a home of my own but it's a very modest two bedroom bungalow and is costing less than some of my colleagues spend on cars in Europe.
I've always been a firm believer in the old adage that you never invest anything into Asia than you can't afford to lose.

[Korkenzieher]

Can someone tell me if there is any difference between what the Americans call an Adjustable Rate Mortgage, and what the Brits call Floating Rate? If they are the same, which I suspect they are, then I don't see why they are controversial in the US. The UK has had rate linked mortgages for decades and it is seen as quite normal to remortgage and tie in to rates which are favourable.

On property in Thailand - I think I would need to feel that if I lost everything in Thailand, that I would still have enough to last me. Having more than a fairly trivial percentage of my net worth as a hostage to fortune in the LOS would leave me pretty nervous I'm afraid, but that's just me.

@Steve - are you building in main HH area, or in the sticks? Just curious.

[STEVE G]

@Steve - are you building in main HH area, or in the sticks? Just curious.

Out to the west of Hua Hin about 8km. Luckily we bought the land some years ago when it was cheaper so I'm only paying for construction now.
If I had to buy the land today it would probably be at a price beyond what I would be prepared to lose.

[hhfarang]

Can someone tell me if there is any difference between what the Americans call an Adjustable Rate Mortgage, and what the Brits call Floating Rate?

I don't know what a floating rate mortgage is, but in the nineties and early part of this century adjustable rate mortgages were very popular in the U.S. because they generally had a very low interest rate for the first three years, then the rate would adjust to the rate current (or higher) at the time. People took those mortgages because they could qualify for a much more expensive home as the initial monthly payments which is used to qualify for a mortgage (based on your payment vs your income), at the "teaser" rate, were low enough to enable them to buy much more house than they could normally qualify for.

It was all a gimmick to get people to buy a home they could not normally afford. The thing was, at the time it worked out ok, because after the three years when your rate, and your monthly payment skyrocketed to something you couldn't afford, you home had also appreciated by 30% or more so you could just refinance, get a new loan at the standard rate or another adjustable "teaser" rate loan based on the new increased value of your property. People were actually refinancing every few months in some cases as the value of their home increased just to take cash out of the equity in the home for other purposes.

Everything was great until the housing bubble burst and all of a sudden your home could not be refinanced for more than you owed, in fact most homes were worth less than the current balance on the mortgage.

[chopsticks]

Floating rate mortgages are called variable rate mortgages.

There were also self-assessment mortgages sold during the buying bubble frenzied years, where, in return for the penalty of having to pay a slightly higher interest rate, you could apply using your own inflated income figures without any further checks being made and so 'qualify' for a loan.

[Korkenzieher]

I did a self assessed interest only mortgage at 2% above base discounted for 5 years by 0.6%. So if interest rates were say 5%, it meant I was paying 6.4% for 5 years and then 7% after that. However, that assumes stable interest rates. Now, because bank base rates in the UK are 0.5%, I am paying 2.5%. Obviously, I haven't really understood something about the US system, but at the moment I am paying the lowest I have ever paid and that is purely because the rate adjusts with the underlying bank rate. Is the issue simply that people owe more than the current valuation of the house (negative equity in Brit-speak), or is there something else?

[chopsticks]

It is that of negative equity and also that the loans were made on the assumption that prices would continue to rise and something of the greed factor or a herd mentality of not wanting to miss out.

Now,if still available, the interest tracker-rate type of mortgages will tend to have a minimum interest rate payable. Also most lenders have reverted to requiring a deposit from new buyers, so the days of 100% loans are gone and there's a lack of new entrants to the housing market causing stagnation and price drops.

[caller]

Being a simpleton, most that is discussed here goes way, way, over my head.

But here in the UK, I have a mortgage (shock, horror). Some time ago I took out a 3.8% loan set for 2 years followed by a tie-in to the variable rate for 3. After 2, I paid 5k to buy out and then bought into a new 5-year deal, which meant I more than recouped the 5k.

Wierd things, mortgages. I still have one. I just reduced my payment by 960pa.

[Whaler]

I have always had variable rate, apart from when there was specials if you threatend to leave you often got a 1 to 2% reduction for 2 or 3 years and then return back to variable. I recall many opted for fixed rates based on 3 or 5 year options which were sold by convincing you that you could budget.

Also many were sold endowment mortgage with the hope of getting an additional cash sum at the end of the term (25 years) most of these types had a shortfall instead, if you were lucky you could claim for bad advice and get maybe 25% of the shortfall back.

The best one was banks calculated interest on daily/monthly basis where building societies were often yearly and post adjusted. This often made the banks 10-15K cheaper over the long term