Cost of living in Hua Hin

[Whaler]

Seems a lot of unneccessary hassle working the house money for the next 30 years just to pay for the house SJ

Exactly my concerns and thoughts as I said previously most understand property and renting having the skill to get the extra 2 or 3 % or more is another thing IMO

I certainly agree to sell up in UK to buy 4 to rent 3 scenario needs very careful planning

I was more advocating the fact that many start on the route to HH by planning to buy their dream retirement home in HH but still keeping a property (maybe downsized already) in the UK. In this case it may be worth considering getting 2,3 or 4 instead of just one large one that’s easy to be lured in to giving the relative costs of building in HH

Taking SJ idea on from the start and adding 1 or 2 self contained granny annexes with a plunge pool that can easily be subdivided to allow renting off etc seems good contingency planning

SJ I think you have seen the purpose built handicap home and maybe this is the only thing this chap has not considered because of the shared pool it makes a little harder to split the plot. This way he could of still run with the handicap holiday home on one side and long term rental for the other.

[Korkenzieher]

SJ:

I thought the stock market's average was only 9.75%, which is not repeatable in near future

It is an average, rather like the housing average at 3.5%. Short run outperformance periods are common - the stock markets have pretty much doubled over the last 2 years but market-timing probably isn't something you should be building into a retirement spreadsheet! But the long run average is what it is. Nothing can be safely extrapolated into the future indefinitely, housing included, but we have to start somewhere. In all cases, some people will do better and some will do worse. It is the aggregate result which creates the average.

But the discussion does seem pretty UK centric. There's nobody out there saying 'yes, I'd keep the house in Munich' or Paris or Detroit or wherever. And it is that UK owner-occupier mind-set which is driving the philosophy. It seems to be pre-supposed that there is intent to return to the UK either at some time, or if the situation goes bad, or 'at the end'. Why? Again, that is a notion of an individuals future requirement or expectation. Nothing wrong with it, but understand at least that it is an emotional response! I personally cannot see any reason whatsoever to have a large part of my net-worth locked up (a small part, maybe, out of convenience, but not a large part) in that way, probably losing in currency terms steadily for the next decade or so.

I also don't see any reason to pre-suppose that if I had to leave (force majeure) that it would be back to the UK. Malaysia, the Philippines or Vietnam are more likely. And I don't honestly think in my dotage that I would have much cause to return to the UK. That's me though, and it hasn't been tested yet. Ronnie Biggs couldn't cope once he fell ill, and who can say I won't be the same when the heat is on.

So all that considered, aren't I looking for something that perserves value rather than preserves a connection to someplace I have no intention of returning to (to live at least)? Then if we kick out the emotional side of it we probably have a better chance of coming to a conclusion. The reason I bought property in the UK after leaving was exactly that kind of emotional response.

Ok. So we have those emotional responses. Does that make it wrong to have property? Of course not. But I prefer to see it purely as an investment. If I could reliably get that 9.75% (call it 10) there is no way I would leave 5m baht sitting in bricks and mortar. That is simply because
the 500k baht return is more than the rent (and other costs) I would save by buying a property with it. Part of the reason is that rents in HH are relatively depressed - probably closer to 5% than 10% and partly because I keep the option of liquidity.

[margaretcarnes]

Good points made earlier as well about 'distance' letting - ie letting a property back home while living in HH. Lomu is best placed to comment on this. From what I've seen personally it's a catch 22 minefield even when living very close to the property you are letting. Much depends on the attitude of the tenant which can be very much pot luck. My present landlords have their own company with over 30 properties, and it's a full time job for them to run it. But using an agent in the UK these days will cost around a sixth or more of the gross rental value (in the North of England.) Plus agents take a percentage of the value of any improvements carried out by the owner - one to watch.

Margaret we have let our house in the NW of England for over ten years now I would say we have had occpancy for 9 years as you loose some time between tennants ( we also had a burst pipe and lost 4 months) and have averaged over 825UKP income post fees and maybe you can deduct an average of 10% of this for maintenance/replacement etc for some good vs bad years.

Not sure who you use, but our agents fees are under 10% and we have found it's not the tennants it's the agents attitude and thier vetting policy thats important plus the ability to handle the little problems. I don't understand your comment on improvements, our agents certainly dont take any percentage other than based on the rent value (eg if you add a 4th bedroom and the rent value goes up)

I agree if you buy to rent especially to DHS then this is a can of worms. I think SJ's pension numbers are not to bad if you consider them as average joint pension.

If you also buy new or nearly new properties the likely maintance costs should be less, certainly for the first 10-15 years.

Much depends on the size and location of property Whaler which we haven't detailed. I'm only a tenant - but before moving last month I was renting a 2 bed detached bungalow in North Lincs where average rental values for that type of property are around the £450 mark, and 2 bed terrace houses about £425. My landlord there trawled the agents after I moved out and was shown the small print about the agency fees on landlord impreovements (which btw include a percentage on the VAT as well!) and was surprised.
Of course larger properties and premium site apartments etc will command much higher rents. Some marina side penthouse apartments in Hull for gawds sake are fetching a grand or more pcm now.
Sorry wildly off topic but - as we are seeming to be comparing UK wigh Thailand - the housing benefit situation in the UK changed a couple of years ago and I do think is causing more hassle for landlords now, and certainly leaving more of a shortfall for some benefit tenants to make up. The days when the 'DHSS' payments went straight to landlords are long gone.

[Korkenzieher]

Mags - in Hull, with the Marina side appts are you referring to those at the end of the old fruit market opposite 'The Deep' (Nelson St / Queens St)? I looked at those about 5 years ago with a view to buying and simply couldn't believe the asking price. The area has a lot of 'upward potential' lets say. Basically, a dump!

[Whaler]

But the discussion does seem pretty UK centric. There's nobody out there saying 'yes, I'd keep the house in Munich' or Paris or Detroit or wherever. And it is that UK owner-occupier mind-set which is driving the philosophy. It seems to be pre-supposed that there is intent to return to the UK either at some time, or if the situation goes bad, or 'at the end'. Why?.

That's a nope for me we have no intention of settling back in UK. We only keep it for income/investment and for grant status of my youngest whilst he finishes off Uni. Once that is finished we may sell or down size.

It certainly would be nice to hear other view points or suggestions in different locals. My friend has just built a palace in the Philippines but that’s due to him re-marrying but cost seem similar to HH. India also has some merit as maybe Mexico/south America way and forget Dubai or Abu Dhabi you can’t get a coffee under 160Bhts and property laws change weekly.

Maybe purchasing a condo for investment in an up and coming resort would be a better investment to offset costs in HH than UK.

[Whaler]

Much depends on the size and location of property Whaler which we haven't detailed.

Margaret, agreed I was just showing a typical family home in the NW in a small town has a reasonable income, stick it in a major town or city and double it, or treble for London.

Even the right parts of Aberdeen can have amazing return a lot is luck where you were born or settled too some years back. Trying to buy in now to the high income areas is not very easily done

[Super Joe]

I thought the stock market's average was only 9.75%, which is not repeatable in near future

It is an average, rather like the housing average at 3.5%.

They're different measures, the 3.5% has been adjusted downwards for inflation the 9.75% hasn't, so the comparitive figure is 7.3%. Also the stock market return contains 4.5% of dividend payouts, the property figure doesn't have it's equivalent earnings included, ie: rental/usage. Therefore a like-for-like comparison, unadjusted for inflation, is more like:
Capital Growth: Stock Market 5.25% & Property 7.3%
Earnings (Dividend/Rental): Stock Market 4.5%, Property 6% (approx.)
Total (combination of the two): Stock Market 9.75% and Property 13.3%

But the discussion does seem pretty UK centric. There's nobody out there saying 'yes, I'd keep the house in Munich' or Paris or Detroit or wherever. And it is that UK owner-occupier mind-set which is driving the philosophy. It seems to be pre-supposed that there is intent to return to the UK either at some time, or if the situation goes bad, or 'at the end'. Why? Again, that is a notion of an individuals future requirement or expectation. Nothing wrong with it, but understand at least that it is an emotional response!

American's do in my experience, Germans no, but property there shows no real growth, it's flat-lined with inflation since the 80's, so why would they hold onto it. I think with Brits it's mostly just a financial decision, you usually only ever hear us say how glad we were to get out of the dump. It wasn't an emotional decision for us we sold the house we had bought together after getting married and kept the tatty 1950's maissonette I've never slept in once, easier to let and better yields next to Heathrow airport. Some must hold on for the safety net of being able to get back in if Thailand doesn't work out, but I'm sure most is because pensions are cack and property has proved a solid, dependable investment that's never let them down.

If I could reliably get that 9.75% (call it 10) there is no way I would leave 5m baht sitting in bricks and mortar. That is simply because the 500k baht return is more than the rent (and other costs) I would save by buying a property with it. Part of the reason is that rents in HH are relatively depressed - probably closer to 5% than 10% and partly because I keep the option of liquidity.

It's 6.8% in real terms after adjusting for inflation which gives you 28k/month on 5m. There's no pool villas on the forum's and another main agent's databases for that money, they both have them around 32k/month up. You can buy those properties for 4m Baht. I'm not saying everyone wants to live in these places at all, or that there's not deals to be found around 5-6% rents


SJ

[Pagey]

Korky quoted 'Mags - in Hull, with the Marina side appts are you referring to those at the end of the old fruit market opposite 'The Deep' (Nelson St / Queens St)? I looked at those about 5 years ago with a view to buying and simply couldn't believe the asking price. The area has a lot of 'upward potential' lets say. Basically, a dump!'

Korky - Those are our (Hull's) best bits !!

Good thread with some good debates , opinions and theories from all contributors.

Now who will tell me if my 'pot', investments and small property, will last 15 years before I claim my pension ?

[margaretcarnes]

Mags - in Hull, with the Marina side appts are you referring to those at the end of the old fruit market opposite 'The Deep' (Nelson St / Queens St)? I looked at those about 5 years ago with a view to buying and simply couldn't believe the asking price. The area has a lot of 'upward potential' lets say. Basically, a dump!

Yes those - but mainly the ones across the other side of the marina in the warehouse developments. Very nicely done out I must admit, but even back in the 90's the prices were well out of order IMO for the actual space you got.

[Super Joe]

Now who will tell me if my 'pot', investments and small property, will last 15 years

Keep it refrigerated in a dark bag with the air removed and you'll have a good run, imo. Investments and small property?... I really wouldn't like to say

On a more serious note, despite the difference of views been expressed about which investment vehicle might be the most advantageous, stock market, property at home or in Thailand, safe old deposit accounts etc, there seems to be concensus on one thing that I had certainly never paid much attention to while working full time... that inflation can be an absolute killer when it comes to living off savings when no regular index-linked income is coming in. And it's not even at a particularly high rate at the moment

Here's some interesting interest calculators from the UK, over the last 30 years 'average' UK inflation has been about the same as Thailand's around 4%, so a good a reference as any
Historic calculators for various comaprisons: http://www.thisismoney.co.uk/historic-i ... calculator

SJ

[dozer]

Property as a long term investment may not be for everyone, but for us it has worked out very well and I would say now with prices deflated, it is a good time to buy.
We first got into the property market here in 1988 and we now have eight 2/3 bedroom houses which are all out on long term rentals and looking to add at least another two within the next couple of years.
One of the keys to success is being on-hand to manage the properties, as finding a reliable/honest property agent is no easy task here in HH.

[STEVE G]

My main concern about financing a retirement by buying rental property in Thailand would be the amount of capital that you would be risking considering the ownership issues and potential changes in laws regarding foreigners.
A change in either your personal situation or the government could leave you with nothing in the worst case.

[chopsticks]

From research report released today :

" Some 3.5 million homes bought in the UK over the last five years are now worth less than their purchase price, according to property website Zoopla."

[Whaler]

My main concern about financing a retirement by buying rental property in Thailand would be the amount of capital that you would be risking considering the ownership issues and potential changes in laws regarding foreigners.
A change in either your personal situation or the government could leave you with nothing in the worst case.

Steve evaluating risk is hard at the best of times

I would guess as dozers investment has been over 8 years probably his outlay is similar to what some maybe paying for single large condo these days.

I agree it's wise not to have all your eggs in one basket and basing financial commitment on what others are doing is a ficticous comfort factor

At the end of the day it’s what you think is best. However, Your own perspective or gut feeling can often cloud the true realities or risk.

Look at how many people build/live in the US hurricane zone, this seems ridiculous from a European perspective. Look at the greed fed housing market in Dubai or how many sad stories from Spain and Portugal over the years. Yet many are still buying.

Personally I think Thai laws to foreign ownership changing for the worse are much lower than risks many take for granted in other places around the world

[Super Joe]

My main concern about financing a retirement by buying rental property in Thailand would be the amount of capital that you would be risking considering the ownership issues and potential changes in laws regarding foreigners.
A change in either your personal situation or the government could leave you with nothing in the worst case.

I think you're referring to the old Limited Company route, or foreigners who let their partners own the property without registering land usage rights on the title for themselves, ie: lease, usufruct etc. Everything you read and hear in this regard eminates from the Land Codes, and this is all to do with land 'ownership', ie: freehold. A foreigner whether single, farang wife, Thai wife or future Thai wife can register, under the law, lifetime rights to the property, and also has the right to let out said property. Usufruct's have been recognized and unchanged in international law since 1450, and Thai law for nearly 200 years (I think), certainly over a century...

The law of the land (Thai Civil & Commercial Codes):
USUFRUCT:
Section 1418: A usufruct may be created either for a period of time or for the life of the usufructuary. If no time has been fixed, it is presumed that the usufruct is for the life of the usufructuary.
Section 1422: Unless otherwise provided in the act creating the usufruct, the usufructuary may transfer the exercise of his right to the third person.

Having said that, if I were soneone concerned about the legalities, or whatever, of property in Thailand then my advice would be to invest in it in the UK/US or wherever their home country.

From research report released today :
"Some 3.5 million homes bought in the UK over the last five years are now worth less than their purchase price, according to property website Zoopla."

Everyone planning to retire for a limited period of time, post-recession, take note

This old addage springs to mind... 'time in the market, not timing the market'

SJ