buy or rent house




The Pros and Cons - What’s possible?

A lot of foreigners fall in love with Thailand, and it’s even more true within Chiang Mai city. The question that raises after a short while is: How long do you want to live in Thailand? It’s a complex question, since it will define a big part of your life afterwards. Renting a house and buying a house, which one is better for your situation? We will go through the pros and cons of buying and renting a house in Thailand.

Bests reasons to buy a home in Thailand

-First and foremost, you really want to live in Thailand and you are ready to stay here for several years. This should be the number one reason of why you want to stay in Thailand. That means also to have a plan for your VISA. Too many foreigners get in trouble after just a few months or a few years because their paperwork is not in order anymore. Planning the VISA for the years ahead in parallel with your house hunting is the wise way to go about it.

-Second, being a retiree! The retirement VISA is one of the easiest way to stay in Thailand, and if you have a Thai spouse, getting a house freehold shouldn’t be too complicated. You can enjoy your retirement in a beautiful house with the mountain view and your lovely second half, while your retirement money from your home country is coming in. Not a bad retirement life, not bad at all!

-If you can afford the Elite VISA package (minimum 15k USD), which grants you 5 to 20 years of freedom in the kingdom of Thailand depending on the package level, it is certainly a nice opportunity for buying a house, especially if you take the 20 years package. It comes with a lot of advantages like annual health check up, limousine, airport services, the elite card etc.

-Next, one of the bests reasons to buy a house in Thailand is that you can rent it out, as an airbnb for example. A good way to rentabilize your investment if your house is located in a nice area and that you are not always home. This avenue will require a lot of research and knowledge about the surrounding areas and the main features of the city. For example, Chiang Mai is divided into rings, that you can actually see on Google maps. They are essentially important highways that are connecting everything. Being aware of the main roads and trendy areas will make your house investment so much better in the long run.

-One of the most obvious points; you don’t need to answer to a landlord. You can upgrade, modify, rearrange your house to your liking. Having a nice land with your house is also very useful, you can grow many different fruits and vegetables like banana trees or papayas.

-Last but not least, if you are planning on registering a Thai company or you are already part of one, you can buy a home through said company. Additionally, if you are American, you are in luck since there are some laws making it easier for US citizens to register a company, under the US-Thailand Treaty of Amity.

On the negative side of buying a house in Thailand

By now, you probably know that buying a property such as a land or a house/villa in Thailand as a foreigner is not something directly doable, and difficult if you don’t have a Thai spouse or that you don’t have a big budget. It is not allowed for an alien to own a land freehold, thus why many will take the leasehold route, which has also its own pros and cons! If you don’t know how, or don’t want to be a shareholder of a company, and if you are not a retiree nor a very fortunate business owner who can afford the costly Elite package, then a long term rental for a house is your best choice! In Thailand, you can rent a property for up to 30 years and then renew the lease for another 30 years.

-Bank property financing to a foreigner for the house mortgage is almost impossible to get since it is clearly indicated under section 702 of thailand Civil and Commercial Code that the mortgagor must have the right of the ownership of the property. So unless you are a shareholder of a Thai company, getting financing for such a purchase will be very hard.

-If there is a bankruptcy of your company, in which case troubles will arise if the house and the land have been bought through said company.

-Finally, you will have to pay the different property taxes suchs as transfer fee, stamp duty, withholding tax and business tax. All this add up pretty quickly, on top of the mortgage payments and its interests, VISA paperwork, legal and house maintenance fees...

The bests reasons for renting your home in Thailand

-As previously stated, the main advantage of a leasehold property in Thailand is that it requires a lot less paperwork and less general work around. A foreigner is allowed to rent a house on a long term lease, up to 30 years and after which, the lease automatically expires and will need to be renewed by both parties. Once the leasehold property purchase is finalized, it is possible to transfer the house on the land to the foreigner’s name.

-It is easier to cancel the lease if anything comes up than it is to leave a house freehold in which you probably sunk a lot of money into already. If the situation arises, both parties will have to sign an agreement and you will probably have to find a new lessee to transfer the lease to.

-If you are in a couple and if anything happens between you and your spouse, it is also less headaches than having the house freehold under the name of your Thai spouse for example.

-No property taxes to pay, along with a mortgage and whatnot. Just the monthly lease payment, with the water and electricity and other usual fees.

-If there is a death of the lessee or the lessor, in which case, there could be complications. Some bad stories came out of such case, where the heir of the lessor would inherit the property and then would put the property on sale. Be careful with the clauses of the contract.

-If you are dealing with a company that owns the land and the house, and that company a few years later goes into bankruptcy, what happens then? Nothing good, usually. Again, be careful with the clauses, and consult one of our real estate experts before going forward. 30 years is a long time and many things can happen during those years.

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Gold & Tree Real Estate

Pantip Plaza Chiang Mai - Room No. 403, floor 4
152/1, Chang Klan Road, T.Chang Klan, A.Mueang
Chiang Mai 50 100