oldie
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Post by oldie on Jun 22, 2018 15:14:14 GMT 7
After giving this idea 5 minutes thought, no way of buying a rental for the son. The thought of someone eating durian or smoking pork belly or diving off the balcony is enough. And that is before the strata fees, insurance and other crap.
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oldie
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Post by oldie on Jun 22, 2018 15:52:51 GMT 7
I am as dumb as dog shit when it comes to money. But we do own a couple of properties in farang land, one holiday shack in Thailand for personal use only; and I have a few coins behind the sofa. With a le kueng kid should I get him a condo someplace as an investment. What has the poor kid ever done to you that you would subject him to a life of Somchaism. Why would a kid brought up in one of the best countries in the world with all its benefits even considering moving here? Of course, if he is as dumb as dog shit and unemployable back home, then go for it. Who said anything about him living there. He is the only living soul who hates Thailand more than me.
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FIREinTh
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Post by FIREinTh on Jun 22, 2018 17:09:37 GMT 7
I'm 42. I think it makes sense at my age to buy one that can be paid off in a few years. There's a lot less risk buying something that's not too expensive that I'm going to live in. I'm not doing for it investment returns. It's mainly to decrease my living costs and to stop wasting money on rent. There's obviously an opportunity cost of not investing the money I'll be using to pay it off. But after about 8 years I'll have more net worth than if I didn't buy it since I'll be saving money on rent. That's even without being able to sell it. Maybe there's something I'm missing, but looks like it's worth the risk. When we bought our condo in Thailand, it was our first property here. We did that by a Thai mortgage though in wife's name guaranteed by me
Like you it was for nesting rather than investing. Knowing my family will always have a place to live if something happens to me - and paid off of course. Having your own place is simply nice too, and not at the whims of landlords.
Buying is also a very good way of fixing your expenses. Rents may be cheap now, but who knows what things will be like in the future, and what if Thailand as a country really takes off, becomes developed and expensive for rentals.
In addition to fixing expenses, you are also mitigating some exchange risk. There's plenty of foreigners who thought they could live off foreign income and rent. Doesn't work as well when the baht goes from THB 70 to THB 40 vs say GBP. Worse still for those that thought they could live off bank interest income of say 6% and rates then tanked to near zero.
So fixing the cost and eliminating the FX risk are two big pluses
Great points Fletch. I just looked at owning as reducing living expenses. I had never considered it would help fix expenses and lessen exchange rate risk when selling overseas investments. I should have been aware of the fixing expenses part though
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FIREinTh
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Post by FIREinTh on Jun 22, 2018 17:14:23 GMT 7
I'm 42. I think it makes sense at my age to buy one that can be paid off in a few years. There's a lot less risk buying something that's not too expensive that I'm going to live in. I'm not doing for it investment returns. It's mainly to decrease my living costs and to stop wasting money on rent. There's obviously an opportunity cost of not investing the money I'll be using to pay it off. But after about 8 years I'll have more net worth than if I didn't buy it since I'll be saving money on rent. That's even without being able to sell it. Maybe there's something I'm missing, but looks like it's worth the risk. A question only you can answer, do you see yourself still being here in lests say 10 years time? I would be considering the following points, job security promotion and an overseas posting personnel development, you might just get bored with Thailand. If you see yourself still being here, then yes I would buy. Those are all good points to consider. I've regularly told myself I'm leaving Thailand over the past 15 years, but I'm still here and enjoying life. That fact helped change my thinking about buying here.
Job security is very high and I now see myself being here for the foreseeable future. Maybe not full-time, but definitely at least part of the year for the rest of my life. I've tried to limit the risk by buying something at a reasonable price.
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FIREinTh
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Post by FIREinTh on Jun 22, 2018 17:23:46 GMT 7
Fletch, your post #4 about different leveraging scenarios is really interesting.
I have some questions about option b - where you take a margin loan but use that money to invest, and then take out a cash loan on top of the initial loan.
That's basically leverage on leverage or a larger margin loan. I understand it works because because the money you invest is earning a higher return from the REITS than the interest you're paying on the loan. But, doesn't that sound like money for free?
In real life there's no free lunch. So if that works, what's stopping someone from leveraging let's say 40% and investing the whole thing in REITS? You could still pay off the interest with the dividends and pocket the rest, right?
It sounds like it's too easy and shouldn't work. What am I missing?
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Post by rgs2001uk on Jun 22, 2018 21:49:53 GMT 7
^^^^, I am with you, no such thing as a free lunch, apart from rising interest rates and decreasing divis from the REITs, not mentioned, exchange rates.
Heard it all before, Brits retiring to Spain, West Indies etc, stick 100k in the bank and live off the 15% interest, not mentioned these FIAT currencies were dropping faster than a bargirls knickers.
Can I offload my pile of Lebanese lira and Argentian pesos to anyone please, at the moment I use them to light up my cigars.
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Post by rgs2001uk on Jun 22, 2018 22:18:27 GMT 7
What has the poor kid ever done to you that you would subject him to a life of Somchaism. Why would a kid brought up in one of the best countries in the world with all its benefits even considering moving here? Of course, if he is as dumb as dog shit and unemployable back home, then go for it. Who said anything about him living there. He is the only living soul who hates Thailand more than me. Good man, sounds like a switched on kid. Heard the same story from so many people from so many different countries its easy to lose count. American/Thai luk kreung told me, "America is the best country in the world", I didnt argue or debate. One of my best mates, lives in the UK, his Thai mrs and luk kreung kid told him, if you want to retire there, you are going on your own, why should we give up the good life we have here? Thais living overseas have asked me, "are you mad, how can you live there?" Years ago, I was offered property in Nakon Nowhere, or Mclaren Vale, guess what I chose, Mclaren Vale has gone throught the roof, nakorn nowhere is still nakorn nowhere, never mind, the latest freshies from farangsville step of the plane everyday thinking to themselves, I can have some of this. If I were you, I would be pumping my money into my super as fast as I could.
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Post by Fletchsmile on Jun 25, 2018 11:34:23 GMT 7
Fletch, your post #4 about different leveraging scenarios is really interesting. I have some questions about option b - where you take a margin loan but use that money to invest, and then take out a cash loan on top of the initial loan. That's basically leverage on leverage or a larger margin loan. I understand it works because because the money you invest is earning a higher return from the REITS than the interest you're paying on the loan. But, doesn't that sound like money for free? In real life there's no free lunch. So if that works, what's stopping someone from leveraging let's say 40% and investing the whole thing in REITS? You could still pay off the interest with the dividends and pocket the rest, right? It sounds like it's too easy and shouldn't work. What am I missing? Yes at the end of the day it's increasing your portfolio and higher borrowings so higher risk, as well as higher potential reward.
Adding REITs because of the higher yield again can be useful. If you have zero REIT exposure to start with it can actually diversify your portfolio better and to an extent reduce the risk on your portfolio. You are still adding financing/leverage risk though. I think it's useful up to a point, and while not a free lunch, it can make your lunch cheaper and add variety
Go too far though and you end up with too much leverage risk, or add too much of one asset class to your portfolio and you add concentration risk. Adding some diversifies, but add too much and you're putting too many eggs into the same basket. I really wouldn't want REITs making up more than 20% of my investment portfolio at the max.
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FIREinTh
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Post by FIREinTh on Jun 26, 2018 8:48:22 GMT 7
Got it, thanks
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