Entering the Hua Hin Property Debate: To Rent or Buy?

After many enjoyable holidays in Thailand and exploring the countryside, many foreigners come to the conclusion that they want to establish a new ‘home base’ abroad at their favorite location. That location in Thailand is Hua Hin for many of them!

A suitable home is not hard to find. After all Hua Hin offers so many choices from high rise condos to luxurious pool villas to more modest townhouses or perhaps a rural location with a house and land. There are also ‘gated’ communities, village settings or golf course apartments. The choices are almost unlimited. But perhaps the most important first step in finding your new ‘home away from home’ is to answer a fundamental question; are you going to rent or buy? That decision has both financial and lifestyle implications. For some the financial or investment factors are primary, others are guided more by emotional choices.

The internet provides many lengthy debates on the pros and cons of renting V purchasing. However the advice offered varies as different countries have different property markets, financial rules and regulations as well as different safeguards for both purchasers and tenants. Home ownership rates vary country by country based on social, economic, political and historical circumstance. It may come as a surprise that Romania is rated as the country with the highest percentage of home ownership (around 96%) as people consider renting to be a short-term solution and the rental housing market is not well developed or regulated. Countries such as South Korea (56%), Austria (48%), Germany (49%) and Hong Kong (50%) have relatively low rates. Switzerland, with an ownership rate of 37%, is among the lowest and Thailand is somewhere in between at 80%. (Ref: snbchf.com – 2017)

The point is that it may be hard to leave behind well entrenched expectations and experiences from your country of origin when considering the choices that Thailand offers. Of course it’s not just a black and white decision. Variations include renting or leasing with a purchasing option, purchasing the property but not the land or lifetime leasing options. These are just some of the topics that a reputable and experienced property agent must be able to explain to your satisfaction.

Looking at a typical Thailand home maker who is likely to be retired and may not be here for the full year; here are some of the advantages and disadvantages of renting Vs. buying a property in Thailand:

Pros of Renting

More flexibility: When renting a home you can more easily pack up and move when you’re faced with sudden changes; including health issues.

Live in a better area: When renting you may be able to afford to live in a better area or housing complex than you would if you were purchasing a home.

Lower monthly payments: The payments you make towards your rent are likely to be lower than paying off a home loan, leaving you more spending money each month.

Maintenance: The only insurance required by a tenant will be to cover the contents of the home, while all maintenance work on the property is at the owner’s expense, as is the building insurance.

Cons of Renting

You cannot make many changes: The changes you can make to a rental property in Thailand tend to more than in many other countries but depend on the whims of the owner. Don’t expect any reimbursement for improvements made.

No return on investment!

If there is a change in ownership or the owners simply decides they don’t want to give you the option to renew your lease, you’re left looking for a new place to live.

When renting a property, you have no control over rental fluctuations.

There is no guarantee that a lease will be renewed when it expires.

Pros of Buying

Value appreciation: Over time the value of your home should increase, depending on the wisdom of your investment. When you finally decide to sell your home you expect a growth in personal wealth.

Control over the property: Whatever you want to do with your home (legally), you can do it without asking for permission! Change the decor the way you’d like it, purchase the appliances you prefer, make changes in garden etc.

It’s yours: No one can take your home away from you.

Holiday home: You could choose to use your home as a holiday home and rent it out when you are not there. In this way you can have the best of both worlds – somewhere beautiful to vacate to and your investment paying for itself.

Home ownership brings intangible benefits such as a sense of stability, belonging to a community and pride of ownership.

Cons of Buying

A significant financial investment: Even though the cost of purchasing in Thailand is far lower than many other countries, it is still an investment that you must be confident about.

Risk of earning no return: Although the property market in Thailand is prospering, if you’re planning to purchase a property in hope of appreciation, there is always a risk that won’t happen.

Less flexibility: If you purchase a home you can’t just move whenever you please, you must first go through the process of selling your home. If you prefer the stability of owning your home, this could be a pro!

There are additional costs to home ownership. These usually include rates, taxes, insurance, and maintenance for which the owner is responsible.

Legal issues are not uncommon in Thailand when unscrupulous developers or agents misrepresent title ownership or financial arrangements. A definite case of ‘let the buyer beware’!

Which option is best for you isn’t just about your money. Ultimately, the decision to rent or to own is also emotional and about confidence in your vision for the future. Ignore people who tell you that one is always better than the other. Housing markets and life circumstances are much too varied and complex to make blanket statements like that. 

Finally a quote to contemplate: “Buy land, they’re not making it anymore” – Mark Twain