Discuss culture, living, traveling, relocating, dating or anything related to the Asian countries - China, The Philippines, Thailand, etc.
I think i'll just buy a house and lease the land. I don't want to get married only to have a woman have that much power over me. In fact at this point in my life I don't want to get married at all. I'm not falling for a filipina scammer and I know they only want money, im not stupid.
At this point I just want to buy a cheap house somewhere in south east asia (probably the phils) and live cheaply and alone.
How much is a small house in the phils (including the price to lease the lot for a 50 year period)? I've looked online but I'm sure the ones they advertise online to westerners are the one at rip-off prices. Like most of the ones I see online are fancy looking ones priced at 10 million PHP (over $200,000 USD).
I don't have any experience with leased lots and building a house in PH, only shopping for condos. In PH builders do "pre-sale" of condo units before they're built at a discount. This means, you pay (or at least in part) ahead and wait 2-3 years for the condo to be built. The new condos are "bare" and you need to spend additional funds to furnish kitchen, bathroom, etc. If you buy from companies like Ayala, you probably won't be ripped off, but you'd pay higher price. Lesser companies are cheaper, but higher risk. Walk around the malls in Manila and you'll find all kinds of builders trying to sell you condos. Some even have show rooms with model floor plans.
Alternatively, you can walk into existing condos, such as those around Greenbelt in Makati, and ask the read the bulletin board. There's usually a pretty young receptionist in front along with a security guard. Owners sometimes post for sale ads on the bulletin board. So the units are already built and furnished. Existing, older condos will cost less than new ones, because people like "new". If memory serves, my buddy bought 3 pre-built units for ~$80k each in 2007, and I saw postings for similar existing units for $70k OBO on bulletin boards.
Before you buy anything overseas, understand that your primary residence is a cash-flow liability. Given choice I'd much prefer to invest in something with cash flow in the US, and use the cash flow to rent overseas. If I buy something overseas, it'd be to diversify my holdings. Currently, interest rates in the US is really, really good and the property prices are down. I just locked in rate at 4.75% for a property. At 4.75%, 30-year fixed rate, $100k loan is roughly $500 per month. For $100k I can buy a condo in California and rent it out for $1100-$1200/month (look along the I-15 FWY). Do the math and you'd find positive cash flow of couple hundred dollars after expenses, taxes, and management fees. Take that positive cash flow and use it to rent a nice, cheap place overseas, while your tenant is paying down your loan. If you don't have enough $ for down payment on ~$100k property, look in North Las Vegas for 2 bed condos around $50k-$60k range. For your first condo investments, don't buy anything older than 10 years.
Doing things my way will carry some risk. You could get a bad tenant who rips everything, including the toilet and leave without paying. Earlier this year, I had a tenant who told my property manager that she was bringing a "small dog" with her, and it turned out that the dog was much, much bigger and tried to attack the neighbors, and 7 residents threaten to sue unless the dog was removed. I called my property manager and told her "go take care of it" and she went to the HOA board meeting to kiss ass for me (I pay her $70/month). I didn't even have to pay a fine. Yes, it's troublesome, but I consider these risks to be lower than that of buying a property on leased land in a foreign country that I have little experience with. If you insist on owning the roof over your head overseas, then my best recommendation is to at least rent and live there for few months before buying. As a non-local, people WILL try to rip you off. Like if you go to Costa Rica, you're not going to get Tico prices unless if you spend time there and get to know people.
1. Here's a link from a biased Thai source so info may or may not be accurate: http://www.doingbusinessthailand.com/th ... -asia.html
2. From experience, I can tell you its easy and fairly cheap to buy quality Thai condos in places such as Bangkok, Pattaya, Chiang Mai, etc. Its all good for most decent condo buildings as long as aggregate foreign ownership does not exceed 49% of total floor space. Thus, for a building with 100 equal sized units, foreigners could buy up to 49 of them. After that, the project or building owner has to sell the remaining units to Thai nationals. Given the current political crisis and quasi civil war going on, I suspect prices are extremely low at the moment, especially in greater Bangkok. And Pattaya had a major condo building boom in the late 2000s. There's a big supply overhang at the moment.
3. A popular nugget of wisdom thrown around by some old hand expats in SE Asia goes, "If it flies, floats, or f***s, rent it, don't buy it". I think this principal can be extended to real estate. Generally, if net rental yields are less than 7% and there is not a very strong case for why property values of the area in question should appreciate markedly, you really should consider just renting.
a. Opportunity cost of capital: As a foreigner, you will not be able to secure a competitively priced mortgage, so you will have to plunk down 100% cash. Consider the investment rate of return you could generate with this cash if you invested it effectively. I believe 6-8% at low risk is still very doable. Why not just use part of this investment return to pay your rent?
b. Loss of mobility: Many real estate markets are very illiquid. Selling may take months to years or require steep discounts to market and possible transaction taxes. Why tie yourself down to one location?
c. Risks of ownership: If you own a unit in a building and something goes wrong like a fire, you might be held liable for all the losses and injuries in the building. That could entail jail time. If you do some sort of complex land lease / buy building sort of deal, locals might find a way to shorten or cancel the lease and take possession of your building. Ditto for those company structures common in Thailand. What if your neighbors or some gal got angry at you and planted yaba on the premises? You might have to quickly abandon your asset, heavily pay bribes, or experience some long hard local prison time.
The real estate market should be full of great +CF deals these days. But remember, when you deduct condo fees, property taxes, and depreciation (or repairs and maintenance as a cash proxy) from your rental returns plus management expenses/commissions (if done externally) and vacant periods, it becomes much more challenging to make money.
Perhaps no-frills buildings (low fees) in markets with high rental demand are doable. But you need some experience and knowledge to locate these deals. An inexperienced newbie at this stuff will probably just loose money. Also, 30 year rates have risen to above 5% I believe, even if you have stellar credit. And where in SoCal can you buy a condo for $100K?
You guys make it sound so ideal/tempting to expat to cheaper countries. If i ever get divorced, i'll probably do just that. Otherwise, i'll wait
until retirement to bail. Most likely China unless living costs continue to inflate until it's no longer manageable there.
And yeah, renting is much more ideal than actually owning overseas. In China, rental rates haven't changed much. The actual real estate prices have skyrocketed though.
Alot of this is due to the real estate taxation policies of the gov't. And in China, the property can be seized by the gov't arbitrarily. Consider how corrupt the gov't is and you'll
realize why it's a bad idea. Also, if you buy an apartment, you have to realize that when the buildings condition deteriorates enough, the local gov't will usually seize the property
to demolish and build a new one. You lose your property and they'll give you a little chump change, pay you on the head, and shoo you away. The only reason to buy property
is to provide insurance to your GF, Native spouse, etc in case you bite it, or you get divorced.
Call me when you're in LA. If there's time I can show you a few areas, and go over the numbers with you.
And one more thing- Thai visas are notoriously unstable and mainly favor tourists. Permanent ones are a headache to get. Plus Thailand is such an unpredictable country which does not particularly like foreigners that buying there is a can of worms.
There is something to be said about being a humble ESL teacher/online teacher who just rents, does not marry, and who easily relocates to another place if SHTF. Somehow following traditional formulas for happiness- get married, buy a house, raise kids, just does not seem to work very well there. One needs to come up with novel paths of attaining happiness and headache free life - not the ones our parents taught us, though.
A brain is a terrible thing to wash!
Thanks momopi. I will be back in LA area in 3 weeks or so. I am always interested in good investment deals. But with real estate, it seems challenging to manage it when you do not live in the area. I have done this before but always have a fixed tenent or someone who can manage it for me. One thing I like about real estate in many other countries is that property taxes are much lower, sometimes even non-existent. They are very low in Taiwan and Brazil and you don't pay anything in Thailand until you sell your property.
Anyway, when I get back there, it would be fun to meet up, have some beers, and talk shit about Winston.
http://en.wikipedia.org/wiki/California ... %281978%29
California State Proposition 13, People's Initiative to Limit Property Taxation, amendment of the Constitution of California (1978):
Section 1. (a) The maximum amount of any ad valorem tax on real property shall not exceed one percent (1%) of the full cash value of such property. The one percent (1%) tax to be collected by the counties and apportioned according to law to the districts within the counties.
Note: Annual increases in assessed value (for purpose of taxation) of real property is tied to inflation, not to exceed 2% per year.
For more info, please see Howard Jarvis Taxpayers Association: http://www.hjta.org/
Look at the proposed route here for some ideas:
Bumping this rather grouchy but absolutely truthful post.
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