For many, housing costs are one of the highest expenses in their budget. A long-touted rule of thumb indicates that rent is generally up to 30% of gross income. If thinking of buying, this bites into a person’s available capital, as securing a loan in Thailand can be challenging, as this report shows. So, what is best for you?
This really comes down to your reasons for living in Thailand. People without clear plans on how long they will reside in Thailand are definitely best to rent. This could include those on a working permit, unsure if their contract will extend, or even being relocated elsewhere.
Buying a condo, house, or villa may make more sense if you are considering retiring to Thailand or have a Thai spouse. Likewise, you may purchase a condo if you want to invest in Thailand and receive a rental income.
This article outlines some pros and cons of renting and buying to help you decide the best way forward. Several of these points apply wherever you live; however, some may be more unique to Thailand.
Renting a Thailand Property – the Considerations
Renting a condo in Thailand provides flexibility. Even if you take a 12-month lease, you can move easily at the end of that period. Living in the best locations in Bangkok for expats means discovering new restaurants, shopping, and recreation facilities, which can be stimulating and exciting.
Rental costs for one or even two years will be considerably less than buying a condo.
Your rent outlay is known and set, making budgeting a little easier.
When excess rental stock is on the Thailand real estate market, you may be able to negotiate better rental prices or conditions.
If maintenance and repair are needed for ‘wear and tear’, the owners are responsible for organising, fixing and paying for it. For example, leaking roofs, broken air-conditioning, faulty pool pumps, or refrigerator repairs, the owner should pick up the tab.
Obtaining a mortgage as a foreigner requires jumping through several hoops. However, it is doable. Renting certainly avoids learning the intricacies of the Thailand financial lending system.
Similarly, the rules and processes around purchasing a condo or house are undoubtedly different from your home country. Again, it is viable, and many people, especially retirees, are happily ensconced in stunning villas and condos around Thailand.
Many people decide they want to stay in Thailand but are unsure which location is best for them. Renting for at least six months in different provinces, various districts in Bangkok, or in your favoured condominium or housing development provides the opportunity to ‘try before you buy’.
Buying Thai Property – the Considerations
Foreigners buying property in Thailand enjoy ‘putting down roots’ and developing an emotional attachment to their property.
Living in your own property provides more certainty and a sense of belonging. Renting is less certain, as owners may sell or decide to move in, and you are on the hunt for new digs again.
Owning a property means maintenance and, perhaps, making alterations. Whether putting up a painting, installing a new kitchen, or even more extensive renovations – it is your decision. Keep in mind that approval may be required in condominiums and developments.
Homeowners tend to have a greater sense of pride in their property. However, owners also need to upkeep their investment, and Thailand’s consistent tropical climate may require more maintenance than more forgiving conditions. For the DIY’ers, this can be a hobby, but for others, it’s the challenge of sourcing quality tradespeople, plus the additional costs.
Even if you plan to live in the property, it is still a capital investment, as it can be rented out or sold in the future.
Many consider rent money as dead money.
The property purchase process in Thailand is complex and different. However, many people navigate the system with the assistance of a reputable real estate agent and knowledgeable lawyer. This buying property guide provides an outline.
What is best for you? Ultimately, only you can decide. Be honest with yourself and your family, and agree on your longer-term plans to guide your decision-making.