Retire Overseas. Why Not Krabi Thailand.

Krabi: Finding your place in the sun

The high cost of living in the West; the cold weather; and the lack of community in big cities: these are just some of the reasons more and more people are choosing to retire overseas.

In a warm, sunny country like Thailand, a small pension will go much further: you can live comfortably for as little as 1000 euros a month though many pensioners get by with less. And with a little more, you will find you can also enjoy luxuries that were unaffordable at home: for example, employing a housekeeper so your retirement really is all about leisure.

In a holiday destination like Krabi, recreation is at the foremost of most peoples minds. Outdoor living is the norm here and you can spend your days on anything from gardening to golf. The beach is never far away and there are any number of excursions both inland and out to the islands to be made.

Expats both young and old will always mention the quality of life here as one of the primary reasons for moving. Of course there is good food, good weather and a low cost of living, but there is also a nice balance of East and West: enough expatriates and western goods to make life familiar, yet also a friendly, vibrant local community used to having foreigners around and accommodating their needs. You can really get the best of both worlds.

With advanced technology making communication with loved ones easier, emotional ties back home need no longer stand in the way of a move. Skype and Google allow you to stay in touch with children and grandchildren with regular video chats. And when your family and friends find out you are moving to Krabi, you are in fact likely to have the opposite problem to solitude: too many visitors!

Finding a place to live
Many Krabi retirees choose to rent homes and keep their primary residence abroad. But for those who wish to make an investment and buy (leasehold only), there is not a great deal of choice.

In Krabi, there are relatively few good quality housing developments and the resale market is still very small. This is why many people choose to custom build a home. In this way, you are able to control the materials used, as well as specify the size and design of the property. Should you be investing for the future many younger people are now acquiring property in place of a nest egg, often decades ahead of time these type of houses are also easy to rent out to the holiday market and make some returns while you wait to retire.

Experienced local firms such as Ton Company in Ao Nang provide a one-stop house building service – from design to construction – and have expertise in creating livable homes for older clients with features such as extra security, guest bedrooms, outdoor living space and manageable gardens.

Any type of custom build can be done in your absence: usually only 2 or 3 site visits will be necessary, with progress reports and other communication done via email and Skype.

Getting around
A car will be essential for anyone living long term in Krabi. The regional road network is excellent and well-maintained; Phuket, with its international hospital and large shopping malls, can be reached in under 2 hours. With a retirement visa (see below), buying a car and getting a Thai driving license is relatively straightforward.

The new government marina in Krabi Town, and the increasingly busy international airport also offer important air and sea links both within the Southeast Asia region, and further afield.

Overcoming culture shock
Because Krabi has a very large English-speaking community, as well as many German, Italian and Scandinavian residents, it is not as foreign as other parts of the country. Western food and brand name products are widely available in familiar supermarket settings and most service staff will have at least very basic English skills.

One of the things new arrivals find it hard to get used to is the relaxed pace of life. Things get done very slowly in Krabi and there are often frustrating waits for bank accounts or phone lines. The only solution is to embrace this laidback attitude and learn the meaning of mai pen rai.

One of the positive cultural aspects here is that older people are held in high regard by society and receive more respect than in the West.

Doing the paperwork
Thailand welcomes older visitors: in fact, anyone over the age of 50 can apply for a retirement visa of one year duration before entering the Kingdom. This permission of stay can be extended in subsequent years in Krabi itself, so no need for visa runs.

The only requirement is proof of sufficient income: a copy of a bank statement showing a deposit of not less than 800,000 baht; or an income certificate with a monthly income of not less than 65,000 baht; or a combination of the two totaling not less than 800,000 baht for the year.

Successful applicants have six months from their first entry to Thailand to bring household items from their home country, exempt from customs duty.

Buying Off Plan Real Estate In Thailand Condominium Acquisition And Escrow

Off plan condominium purchase in Thailand means buying a condo in a planning stage or a condominium not yet fully constructed. The standard payment schedule found in an off-the-plan sale and purchase agreement of a condominium in Thailand is:

1. a reservation agreement with a reservation fee of 100,000 baht (approx 3300 USD)
2. a deposit of 10 to 20% of the purchase price on the execution of the condominium sale and purchase agreement
3. periodical installments during the construction of the condominium with a final installment of 1/12th to 1/20th of the purchase price upon transfer of ownership of the condominium.

Who to pay to?

Paying in escrow for a condo in Thailand means that payments are made to an Escrow Act licensed third party financial institution or bank that will hold the deposited monies till the conditions of the condominium sale and purchase agreement have been met, depending on the contract. The use of escrow services in Thailand for property purchases is not common!!

Generally developers in Thailand DO NOT offer escrow payment arrangements. Property developers in Thailand are under the Escrow Act or new Condominium Act and Condo Act regulations NOT required to offer escrow agreements to consumers. Property developers in Thailand are free to require deposits and installments in agreements without offering any protection for the purchaser payments. There is no legal protection structure in place for realty buyers. This part simply depends on the agreed and accepted contract terms and conditions between the seller and purchaser. If the buyer pays directly into the developer’s account this is an accepted risk he as the purchaser takes.

In 99% of the property development projects in Thailand the purchaser makes the payments directly to the developers bank account. Obviously payment made directly to the developer, as opposed to payments made in escrow, carries some serious financial risks for buyers in case of default by the developer. They risk loosing all. In addition, pre-paying the development, the buyer looses all leverage in case of delay or poor workmanship. At the time of completion the buyer has paid up to 95% of the purchase price and the developer is in a much stronger position and can simply refuse transfer of ownership to the buyer.

The developers company

The standard payment schedule by which the purchase price is paid directly to the developers bank account during the construction or even before the start of a condominium project carries risks of losing your payments in case of default or bankruptcy of the developer.

An important part of this arrangement is the developers company. Is it a large SET listed (Thailand stock exchange) real estate developer or a limited liability company with a low share capital and a poor track record? Limited liability for the developer means limited liability and in case of default there is for the buyers little chance of getting any of the payments back.

The Condominium Act supposed to protect the interests of the buyers of condos in Thailand but does not require the establishment of escrow arrangements in an off-plan condominium development.

Paying directly to the developer in Thailand is taking a risk.

Thai Real Estate Investment Soared On Back Of Property Fund Activity

KTAM Aims to Become Thailand’s Leading Property Fund,Increasing Assets Under Management to 11.3 Billion

The Bangkok Post reported on Thursday, 22 February that real estate investment in Thailand soared by 81.8 percent to $2 billion (1.3 billion)in 2012, nearly double the $1.1 billion (720 million) in 2011, as property funds markedly increased their investment activity.

According to property consultant DTZ, Thailand’s real estate market was boosted by the listing of major property funds and a high number of acquisitions, particularly in the office and hotel sectors. Some $1.1 billion (720 million), or 55 percent of total real estate investment, came from transactions by real estate funds or public funds for public offerings (PFPOs).

Investment activity received a major boost from the listing of Tesco Lotus Retail Growth Freehold and Leasehold (TLGF) in the beginning of January 2012, which proved to bethe largest property fund listing for the year. The $594-million (389 million) fund purchased 17 Tesco Lotus shopping malls in prime locations across Thailand in a deal which by itself exceeded half of the real estate investments in the country in 2011.

Other notable property fund investments in 2012 included the purchase during the first quarter of three serviced apartment complexesand residences for $106 million (69 million) by the listed Land and Houses Freehold and Leasehold Property Fund (LHPF). Additionally, the Quality Houses Hotel and Residence Freehold and Leasehold Property Fund (QHHR) bought three Centre Point serviced apartments in the third quarter, for some $107 million (70 million).

KTAM Eyes Real Estate Market

Krung Thai Asset Management (KTAM) has the ambition to lead the market in property funds and,more specifically, to increase its assets under management by 20 percent in 2013 to 516 billion baht (11.3 billion), said chief executive officer Somchai Boonnamsiri, citing the positive overall investment climate.

The Bangkok Post reports that Thai billionaire Charoen Sirivadhanabhakdi plans to raise funds through the funds managed by KTAM, with the subsequent capital increase being dedicated to turning KTAM into the global leader of this type of fund.

KTAM is considering entering new markets including Mexico, Brazil and some European countries. Annualised return for short-term investments in these regions is forecast at 3.5 percent or about one percent higher than returns in the Thai domestic market.

The Thai fund intends to boost the capital of property funds under the direction Sirivadhanabhakdi’s TCC group to as high as 50 billion baht (1.1 billion) this year. The fund also plans to launch ETFs on the Stock Exchange of Thailand in sectors such as food, energy, ICT and the commercial sector.

2013 will be the last year in which Thailand’s Securities and Exchange Commission will allow investments in what has been known as property type 1, with introduction a new type of property fund, the internationally recognised real estate investment trust, set to replace the old structure.

Condominium Ownership Document And Address Registration Tabien Baan

Foreigners buying a condominium in Thailand will receive 2 official government issued documents related to the condominium.

1 the condominium ownership title deed
2 the condominium house registration book

Each condominium unit has a unit title deed issued by the Provincial Land Department or its branch office and a Tabien Baan or House Registration Book issued by the local municipality.

The condominium unit title deed is the official ownership document and its use id proof of ownership. The apartment’s house book primary use is registration of the unit and it’s address and verification and registration of a Thai person’s address living in the condominium.

The normal house book issued for each address in Thailand is the blue version of the Tabien Baan. Foreigners owning a property are usually not registered in the blue book as owner or resident. Opposite Thai nationals foreigners often have an empty blue house book.

There is a separate version of the Tabien Baan for foreigners, the ‘yellow book’. It is possible for foreigners to exchange the blue book for a yellow book if the foreigner meets the requirements for the application. The required documents for a yellow book vary per location but usually require a non-immigrant visa and an ownership document such as the condominium unit title deed, but could also include a work permit or marriage certificate.

A yellow book is unusual in Thailand and it is not necessary for foreigners to exchange the blue book for a yellow book. The majority of foreigners have the blue book together with the ownership unit title deed.

Even though the foreigner is not registered in the house book foreigners usually proof their address through the Tabien Baan and the condominium title deed, or obtain a separate ‘letter of residence’ from the local immigration.

Overall compared to the ownership title deed the house book is not an important document and there is no need for foreigners to exchange a blue for a yellow book.