Should I Buy A Condo
A large number of people invest in real estate or own a condominium to build their equity and it is this prime objective that drives more people to invest in real estate. After the financial slowdown, prospective home buyers have started calculating the costs and benefit of such a huge investment. The recent slowdown has affected the real estate market the most and this has prompted the homebuyers to take a more realistic look about increasing their equity, though the drive for being a homeowner is still strong. It is the freedom of redoing your home is what encourages more people to purchase properties, you know there is no landlord who will ask you to leave the condo after a year or increase your rents arbitrarily, etc.
Renting Vs Owning is a constant discussion most expats indulge in Bangkok and is the most pertinent question that will be asked at one point or another. This question bothers most middle aged or older expats who have liked Bangkok and would want to settle down Thailand. Of course, there are a lot of incentives of owning a condo, but before getting more confused, it is better to answer a few questions beforehand.
Reasons why you should rent a condo in Bangkok
Renting a condominium provides you with a good opportunity to explore the area before you decide to make a decision whether to make any long-term commitments. Renting allows you enough time to explore the area and neighborhood. If you are not certain about your job prospects in the country, or you may have to travel to other countries frequently it is better to rent a condo than to own one and be tied down to one particular place. It may happen that you may have to experience pay cut or increase in pay, but all these are uncertain decisions that may affect your ability to pay back the mortgage leaving you in troubled waters.
Paying rents on time will have a good impact on your credit report, which will help you get your mortgage sanctioned fast. The benefit of renting a condo is that you don’t have to spend on maintenance as these costs will be borne by the landlord. But, other than the above benefits you also have some disadvantages too. You will have no control over the rents, which is a huge amount in your budget that is subject to change after every lease term. Under such circumstances planning long-term can be difficult.
Reasons why you should own a condo in Bangkok
When you own a condo you are increasing your equity and when you the mortgage amount you are inching closer to ownership of your home, while renting a condo you are paying off the landlord’s mortgage and adding to his bank account. If you are intending to stay in your home for at least more than five years, then it is sensible to own a condo as the cost of buying a home is more likely to be offset by the accrued equity and the increase in the home value. You can as a homeowner deduct mortgage interest as well as your taxes towards the property.
Low price of property in Bangkok compared to the many Western countries makes the whole deal very attractive for expatriates who are tempted to settle down by purchasing a property in Thailand, but beware the banks in Thailand have virtually stopped lending for real estate due to high numbers of defaulters. Obtaining mortgage will solely depend on the ability of the borrower to repay after studying his credit record and employment status. This means buying a property for an expatriate or foreigner is not easy as it is for the local Thai population. Condos on the other hand can be owned 100% by foreigners and are available at a reasonable cost.
By owning a condo you have enough creative freedom within the house. You can paint the walls in any color schemes, hang any artifact or picture and don’t have to worry about cuts in security deposit. The maintenance headache is solely your responsibility and as a member of the building association you may have to pay a maintenance fee so that any maintenance related issues will be undertaken by the house owners association.
Renting Vs Owning, which one is better?
Whether you decide to own or rent, the cost effectiveness of the decision depends a lot on the market, the place where you are going to live, any home improvements you are planning to make and the maintenance costs. Of course, purchasing a condo costs money and any repairs to appliances, or roof leaks and the cost of repairing these should be borne by the owner. In case you are renting a condo, then the headache is solely of the landlord. Renting means you are completely dependent on the landlord and if he decides to not continue with the lease agreement after it expires you are again looking out for a condo for rent. Renting is good if you are going to stay for a year or two and want to return to your native country, but if you are planning to work for more than five years in Bangkok, it is ideal to consider owning a condominium. If you have your family with you owning a condominium is a better option, but all of these should depend on your job stability, inflation and cost of living.
Moving in and out of condos with your family every year if you are on rent, can be very cumbersome and stressful especially if you have school going kids. Moreover, your friends and extended family members can have a nice time at your own place whenever they plan to visit you and your family.
Renting Vs Owning is a hot topic of discussion among most people in Bangkok. The wise thing would be to rent initially as it will give you enough time to understand the culture, economics and political situation in the country. Once you are sure about your stay in the city and are well set in your job you can consider owning a condominium in Bangkok.