Practical Reasons Why You Should Consider The ‘Try Before You Buy’ Plan
The Pattaya property market today is a minefield to any new comer. They are likely to be confronted with brand new developments priced at 150k baht per sqm and on the other hand resales working out considerably less per sqm and not have any idea why. They are left in complete confusion of where to go and how can there be such a confused market. What on earth could have caused this situation? What is the true value of any property?
Let us try to give a brief explanation and reasoning behind the ‘Try Before You Buy’ promotion.
Any new development has to carry the ever increasing costs of today with land prices, costs of materials and wages always on the up. The developer has no choice but to calculate from these costs to produce their final sales price. The developer sets the true sales value. Bank surveyors will also calculate from today’s costs. This is for the purpose of mortgage calculations and valuations which is something that’s very important to bear in mind.
However, on the resale side of the market, the Tudor Group have something unique. It’s all governed by the strength of the Thai Baht and the advantage of sending the money home. Expats that have lived in the Kingdom for many years probably brought their money in at rates of around 70 Baht to the Pound. They have calculated they can hugely reduce their asking price to make a quick sale and win their money on the exchange rate going home. Instead of making the money on selling the properties like all the rest of us have to, within the normal Pattaya market. That’s how at the moment you’re getting the ridiculously low prices with some of the resales. This is a huge advantage to any buyer with cash on the hip, but if like 90% of the buying market, you don’t have available cash, your not going to be able to buy these properties either. So I guess your stuck and not sure what to do.
This brings us back to my point about the bank and surveyor’s valuations. A property on the resale market at a very low per sqm price is going to be valued by the Surveyors and the Land Office at a much higher rate to establish the true market value according to cost. Some people are currently being caught out at the point of exchange within the Land Office as a sales price at less than market value is simply not accepted. The Government is forcing the exchange tax at the market rate and not the fire sale price. Do you blame them? One can’t imagine any Government wanting to lose out on their tax collection aspect of the sale.
All in all, the Market is a mess. Is there a solution?
The team at the Tudor Group are well aware of the situation but as time waits for no man, the Market needs a different approach. Developers and ordinary people selling their properties need to think out of the proverbial box.
With all the above in mind the solution is simply, try before you buy. Get yourself onto the property ladder at a low rate and allow the market to settle. Property markets normally go in 5 year cycles. So clear the cycle with their 5 year property trial. The promotion is easy. Pay 20% down and then nothing for 5 years.
The trial period. On the amount you’ve paid, they will give you a 10% rental return for the 5 year trial period. At the finish of the 5 years you have a choice. If the market has gone up then buy the remaining 80%. If the market has gone down then sell it back. It’s hedging your bets and getting paid along the way!
See the Back Page of this edition of the Business Supplement for more details on the ‘Try Before You Buy’ promotion.