Family Money: Get real about real estate
- Part 3
Managing director of Westminster Portfolio Services (Thailand) Ltd.
Rent or buy?
Before deciding whether to rent or buy a property in
Thailand, look at the ratio between the purchase price and the rent being
asked for the same property.
In the West, the ‘standard’ rule-of-thumb for
value/rental is around 100-120 times. In other words, if your house is
worth ฃ100,000 and in a prime location and good condition, you could
get perhaps ฃ830-ฃ1,000 a month rental income from it.
(Of course, after paying taxes, rates, maintenance
costs & repairs, insurance, agency fees, etc., you may end up with
only 4%-5% per annum net return on your investment property. Considering
the inflexibility of the investment, not a very enticing return.)
Here in Pattaya, however, the rule-of-thumb ratio seems
to be more like 200 times.
For instance, the ‘average’ shop-house sells
nowadays for around 1.6 million baht , depending on location. That same
shop-house would rent for perhaps 8,000 baht per month. Which means the
purchase price is about 200 times the rental price.
In other words, if you bought the property you would
have sunk an amount of capital into it equivalent to paying 200 months’
rent (which for those who don’t have a calculator handy is 16 years and
Alternatively, the same 1.6 million baht wisely
invested in secure medium-risk offshore investments could reasonably be
expected to generate an income stream averaging 8% p.a. over the longer
term - or 128,000 baht a year, while leaving the capital intact and
Renting that property for a year would have cost you
only 96,000 baht from this income-stream, so you would still have money
left over for fun or whatever.
Simple arithmetic tells you it makes better economic
sense to rent rather than having your capital tied up in a property which
is unlikely to appreciate much in value and almost certainly not beat
inflation, if past history of the local property market is any indication
of future trends.
Location, location, location
Another point to consider is location. That property
may be located in a ‘nice’ area now, but who knows whether that area
will have become more popular or less popular 10-15 years hence?
“Ah,” you say, “But that’s how I’ll make a
capital gain!” Yes, if the area improves. But you might have to swallow
a capital loss if the area deteriorates - and that has happened many times
in many ‘select’ spots of Pattaya which are booming one year and
deserted the next. (And, I freely admit, vice versa.)
So making a capital gain on an investment property is
very much pot luck.
Housing estates and even condominiums are subject to
the same whims and fancies, it seems, although less than commercial
But consider whether you would be content living in the
same house in the same location for the next 16 years. Because that’s
the rental equivalent of purchasing the property outright.
It is more likely that you will want to move to another
location - perhaps quieter, cleaner, newer - sometime during that period.
Then you’ve got the problem of finding a buyer for
your house - perhaps in a deteriorating neighbourhood. After 16 years what
repairs will your house require? Just look around a few 10-15 year-old
houses to gauge the answer to that one.
An investment or a millstone?
Buying a property to live in is one thing; buying it as
an investment is another, whether in Thailand or indeed anywhere.
While the property market in Thailand is still
relatively depressed, homeowners could suffer a considerable capital loss
if they sell their properties for what many buyers would regard as true
market value. Naturally enough, they are reluctant to do so. This is one
reason why property prices have not come down as much as was anticipated
after the currency crisis of 1997.
If the homeowner bought the property on a mortgage or
financing arrangement, the loss will be compounded by the interest he or
she will have paid in the meantime, which until very recently was
inordinately high - not to mention the taxes that may have to be paid on
the property, either by the seller or the buyer.
Thus if you are looking at property purely from an
investment perspective, it could take many years for the overall costs to
be recovered. Even in developed markets, property values over the long
term just about match inflation.
In the meantime, there are all sorts of ‘charges’
on the investment to be considered: taxes (discussed next week);
insurance; maintenance and repairs - which could be a major expense should
the tenants run amok and trash the place, as has happened to some friends
of mine right here in Pattaya!
I know of other cases where a property was bought as a
long-term investment, and has become a millstone round the owner’s neck.
The property is sitting idle with no prospective buyers in sight, no
rental income, but still incurring a tax liability each year. It is
therefore a depreciating capital asset which is a drain on resources,
rather than an income-generating investment.
At the end of the day, it is entirely up to you whether
you buy or rent your home, and this is often an emotive rather than
But after taking into consideration the significant
capital outlay, bureaucratic complications, peripheral costs, taxes and
inflexibility, my advice would have to be “Rent don’t buy.”
(To be concluded next week)
Personal Directions: Being assertive generally
leads to winning situations
By Christina Dodd,
founder and managing director of Asia Training Associates
I was talking with some colleagues the other day about
young managers and, how today, there are so many areas of responsibility that
they have to attend to and deal with. One skills area or should I say -
behaviour - that is a necessity in any successful form of management or
managerial style is being able to assert oneself. Now some of you may say that
there are enormous cultural boundaries with respect to (and which affects) the
way people behave and, to an extent I agree. But I don’t like to focus too
much on cultural differences because sometimes they get in the way, turn into
excuses as to why people don’t perform, and lessen our ability to view - and
understand - the real person beneath what we see.
Just what is
Assertiveness emphasizes self-confidence and a persistent
determination to express oneself or one’s opinions.
It’s about improving interpersonal skills, being more
effective in communication in order to better handle problem people and
It’s about being positive and in control - of thoughts,
tone of voice, body language - the ability to communicate.
What does it
It involves greater self-awareness, getting to know, like
and be in-charge of the real you!
It involves listening and responding to the needs of others
without neglecting a person’s own interests or compromising their
Being assertive generally leads to winning situations,
where both parties feel good about themselves.
For a little bit of background on this, let’s take a look
at conditioning, and its contribution our patterns of behaviour. When we first
entered this world, and until we were about six months old, we knew and
demonstrated two forms of behaviour: aggressive, demanding behaviour and
passive, dependent behaviour.
In our early development we were conditioned by people and
events, and soon adapted to please parents or other adults responsible for our
social training and up-bringing. We were told what was good and what was bad;
what to do and what not to do. Good behaviour was rewarded with smiles and
favours, but sometimes bad behaviour was rewarded too - with attention. And so
the passive / aggressive pattern builds and as adults we slide into the
adapted behaviour to achieve our own ends, to keep the peace or to satisfy
others - often forgetting and sacrificing our own well-being.
Passive and aggressive behaviours come naturally to us and
often seem the easy (though not usually the most effective) way out, whereas
assertive behaviour requires a cognitive process rather than a gut reaction.
Assertive behaviour is learnt - we were not born assertive.
Depending on our own mood, the situation, the people
involved and so on, we frequently respond somewhere between
passive-through-aggressive, without giving a thought to the assertive option
which recognizes the needs, feelings and opinions of both ourselves and the
Conditioning plays an important part in the way we act and
react as an adult. As a child we may have learned that it is not polite for a
lady to express anger, or that it is a sign of weakness to cry in public, or
that men should enjoy physical contact sports and so on. This quiet
conditioning has coloured the way we see ourselves and others, but the good
news is that conditioning has not fixed our personality forever. We are
constantly developing and changing. Things learned can be unlearned,
alternative behaviours can be rehearsed and practiced until they become
It should be stressed here that it is not necessarily a bad
thing to react passively or aggressively, just as being assertive might not
always be the best behaviour choice. There is such a thing as appropriate
behaviour choice and passive and aggressive behaviours are sometimes
appropriate, depending on the situation.
Before I go any further, I would like to add that being
assertive is a quality not only desired in today’s managers, it is quality
desired in just about everyone in view of the richness of life it can give to
individuals and to society as a whole.
Assertiveness training can be of huge benefit as a means of
self-development. People with good assertiveness skills will also have
increased self-awareness, greater confidence and self-esteem, honest and
powerful effective communication skills. They will have respect for themselves
Most central to this is positive thinking. Assertive people
have a positive self-image; they will use positive language; they will look
for positive outcomes to interactions; they will work with the other person to
provide positive solutions to problems by which both sides win; they will be
positive in their respect for the other person’s views and opinions, whether
or not they share these views.
In preparing to be assertive there are many such factors to
consider, such as, self-awareness and self-esteem, positive self-image, body
talk and body language, positive verbal skills, voice volume, intonation and
projection, position and status.
Out of all these factors, let’s take a brief look at
positive verbal skills. Assertive communication means be able to express
oneself concisely and clearly in a direct, honest and spontaneous way.
It also means to:
* State exactly what you feel or think; don’t expect
people to be mind-readers
* Tackle the problem, not the person
* Match vocabulary to the listener
* Deal with specifics, not generalizations
* Don’t over-apologize - once is enough if sincerely said
and in an assertive manner. Don’t apologize for everything and to everyone!
* Don’t give excessive explanations
* Take ownership of your message. Have the confidence to
say “I” and take responsibility for individual opinion!
Being assertive generally leads to winning situations.
Unfortunately, in the same way as you will not become slimmer and trimmer by
watching a fitness workout video, you will not become assertive just by
reading words on a page. You need to be actively involved and you have
to get out there and practise. Start with something small and if you make a
mistake, forgive yourself and try again!
For more information on our programs including
Assertiveness for Managers, please don’t hesitate to contact me at
Until next time have a very positive week and please
continue to send in your comments or opinions, should you wish to share them.
The Doctor's Consultation by Dr. Iain
Corness: SARS - a pimple on the bottom of an elephant!
by Dr. Iain Corness
The other day I heard of a dog that was going to the UK was
refused his kennel on the plane because the authorities in an airport in
Europe, where Rover was going to be shifted onto another flight, would not let
him out because of SARS!
My incredulous response was that dogs don’t carry SARS,
but it seems that the ban on Rover the flying puppy was because the ground
handlers wouldn’t touch anything that came from Taiwan! Entreaties that
Taiwan and Thailand were totally different countries fell on deaf ears. As far
as the ground handlers were concerned, Taiwan and Thailand were in Asia and
that’s where SARS came from! Rover is still grounded at last report.
So should the ground handlers be that cautious? No! The
simple answer is that SARS should only be thought of as a pimple on the bottom
of an elephant. It is truly that insignificant!
Now, I would not blame you for being suspicious of my stand
on this disease, after all, the media all over the world elevated SARS to a
continuing front page saga, after the war in Iraq fizzled.
However, I would like you to think about the following
facts. As I write this, the latest figures from the World Health Organization
(WHO) indicate that the cumulative number of SARS cases in the entire world is
8,240. Please note that this is not the number of people currently lying in
hospital. This is the total number of people who have the disease now added to
the ones who have HAD the disease over the past six months (and got over it in
the vast majority of cases)! Total deaths stand at 745. That’s 745 in the
entire world in the past six months.
Now I want you to look at these figures - last year, in
America, 36,000 people died from Influenza. That’s right, 36,000 DIED from
the flu. In addition, the latest figures I have from Australia indicate that
in one year there were 24,600 cases of pneumonia, and 1,746 of them died. Yes,
that’s 1,001 more people died in one small population than have died in the
entire world from SARS.
In the light of these figures, especially 36,000 deaths in
the US, shouldn’t the WHO be issuing travel warnings to America? Well,
don’t cancel your ticket, they haven’t - but they did issue a travel
warning to Vietnam because of SARS. You want to know why? Well, in Vietnam, 5
people died from SARS in a population of 81 million people. That’s right
FIVE deaths in 81 million and the WHO pulled the plug on Vietnam.
Using the WHO’s own figures, the death rate from SARS is
still less than 10% and the vast majority of those who succumb are the old and
frail or those with compromised immune systems. Remember too, that the WHO
bases its figures of SARS sufferers from the lists in hospitals. What about
all those who had SARS, didn’t go to hospital because for them it was a mild
illness, and so never got counted in the list of those who got better? The
death rate from pneumonia in a developed country like Australia is 7%, so I
would expect the death rate from SARS (a form of pneumonia), to be about the
same. It is. It is not a killer disease. It is a pimple on the bottom of an
I’m just curious to know. Does (sic) all foreigners
marry or have relationships with bargirl/freelancer prostitutes. I’m
asking this because all the men that I know of have those girls as
companions. And I was told by Thais that if they see foreigners and Thais
together, its (sic) usually is between prostitutes and her/his customers.
I think it is high time that you took a closer look
at all the men you know. Are these people the only ones you know? Change
your circle of friends, my Petal. And soon. You are also doing a great dis-service
to the majority of women in Thailand, such as accountants, architects,
business women, doctors, hospitality professionals, opticians, nurses and
many other women who may be married to someone from another country. It is
not that difficult to spot the difference between the way a prostitute
dresses and behaves, compared to other women - in any country in the
world, not just in Thailand. If you don’t believe me, try a quick trip
to Soho in London, Kings Cross in Sydney or Amsterdam. However, you are
correct, that if a foreigner is seen with his arm round a scantily dressed
girl in a bar in a red light area, then it is most likely that this is an
association between a prostitute and her customer, be it in Vietnam, Hong
Kong, Australia, Germany, Holland, America or even Thailand. There’s jam
tarts, apple tarts and plain tarts. It’s about time you knew the
difference. You men make me sick sometimes. Pay more attention to your
spelling and grammar and less to the bar room small talk.
Dear Khun Hillary,
I am in love with your column! You maybe do not have an
idea how much your reply to Mr. Cheesed Off has just hit right to my core
heart! I am called “a Thai” of course... I would suggest to anyone who
is always busy and has missed that issue that pretty soon you might need
to have the alarm set on your personal computers to remind you for when
the next great new Mail is due out. I apologise for my poor plain English,
however I will try to improve and write to you more. A big thank you to
the great Optimistic Hillary.
Dear Thai Woman,
A big thank you to you too, my Thai Petal. It is
always nice to know that somebody appreciates the hours Hillary spends
slaving over a hot keyboard, with only chocolates and champagne for
nourishment, just to get the column finished in time for the ungrateful
editor (who never sends me choccies, even at Xmas time). Your English is
fine and your writing very legible, which is more than I can say for some
of the other contributions from native English speakers who should be able
to string a few sentences together in readable script.
Like Traffic Jam Johnny (two weeks ago) I am heartily
sick of the never-ending story of road repairs. Even when they lay new
concrete, they will come along two months later and dig it all up to lay
water drains. Don’t they have anyone to coordinate the work so that they
don’t have to dig up the same through roads twice? You might wonder what
this has got to do with Hillary, but they have been digging outside my
house for the past six days and I can’t get to sleep in the daytime and
it is playing hell with my love life. Got any suggestions?
Traffic Jam Jim
Dear Traffic Jam Jim,
I must say I certainly did wonder what the local
road works had to do with me. I was beginning to think that I was supposed
to rush out in the early morning, hair in curlers, in my pink chenille
dressing gown and start laying concrete or similar physical nonsense. Now
to your insomnia. Have you thought of going somewhere else during the
daytime? Ear plugs perhaps? But why do you need to sleep during the day
anyway? Surely you haven’t got a job that has you on night shift? In the
meantime, why don’t you go out there yourself and give them a hand.
I’m sure they will appreciate it, and the extra physical activity will
make you so tired you will go to sleep immediately.
Do you have the answers to constant requests from
people in the old country who want to come over here and think they should
automatically get a spare bed in my house. Some of these people aren’t
even close friends, or worse still, friends of friends. I have lived here
for a couple of years now and in that time have had 11 different house
guests. None of them ever say thanks, or offer to pay for anything, they
drink the refrigerator dry and leave the towels wet and sopping. They want
my maid to do their washing and ironing and don’t pay her either. How do
I stop this?
Dear Harry Hotel,
This is very easy to fix. Learn these two words next
time you are asked, “Sorry! No!” There, that was easy, wasn’t it,
Camera Class: Get a new
by Harry Flashman
Successful photographers are people who have learned to
develop their art of ‘seeing’. When you boil it all down, photography is
really just about ‘seeing’ and presenting images. Successful photographers
are very often ones who have discovered a “different” way of seeing the
subjects that they (and you and I) photograph.
One obvious example was the British photographer Bill Brandt,
famous for photographing nudes using a wide-angle lens on the camera. This gave
a very distorted figure, but one that became “arty” and produced fame for
Brandt. Whether you find Brandt’s viewpoint aesthetic does not matter - the
important fact to remember was that it was different.
This does not mean that I suggest you race down to the
closest beach with a fish eye lens glued on the camera and try and persuade
people to remove their clothes! Far from it. What I am suggesting is that you
should stop for a while and consider something unusual, compared to your
“standard” way of taking shots.
You see, it makes no difference whether you have an SLR with
multiple lens choices, or just a humble point and shooter with a fixed lens, we
eventually get into a “habit” while taking photographs. Habits include the
lens you stick on the front of the camera. I will wager that you have a
favourite lens that stays on the camera body, and the others are only used when
you cannot get the subject in the frame and have to use an alternative. And
habits certainly do die hard, even if it is just the one of always taking shots
in the horizontal (landscape) format. Look at your last parcel of pictures. How
many were vertical format?
What I am suggesting is to devote one complete roll of film
to some new or different ways of doing things. Many times it is impossible to
predict what the final result may be. You may have discovered a radical new
approach, a highly individualistic way of presentation. The end result may not
be to everyone’s taste (like my idea about Bill Brandt’s work), but you will
never know till you try. And what is a roll of film worth compared to the fun
(and fame and fortune, perhaps) that this weekend could produce for you.
To get you going, here are a few ideas you might like to
explore. The first I will call the child’s eye view. Our viewpoint is
generally around 1.75 metres from the ground. That’s where our eye level is
and that is the viewpoint we use in 99% of our pictures. Now imagine you are a
three year old child. Your viewpoint on life is very much closer to terra firma.
You spend more time looking up at the world. It would certainly be worth
re-viewing some items from this very low viewpoint. OK, I know you will end up
looking up people’s noses - but it just might work. You won’t know till you
get the pictures back.
The opposite end of the spectrum is the “Bird’s eye
view”. This takes some more thought and planning - and sometimes a stepladder
as well, but again you will get different shots. Ever noticed how many rock
bands have photographs taken from above, with the members of the group looking
up at the camera? Ever wondered why? It is because you end up getting a very
powerful shot - and a different, memorable shot. Try standing on anything high.
Just don’t drop your expensive camera or fall off! It is actually quite easy
to become unbalanced looking through the viewfinder when up high.
For those who do have choices of lenses, or do have zoom facility in the
point and shooter, you can try using the two extremes that you have, even though
you may think that the lens choice is unsuitable for what you are photographing.
After all, remember Bill Brandt! It is even worthwhile taking the same subject
matter with both of the two opposite extremes - wide angle and telephoto.
Recipes from Rattana: Larb Gai
This is a traditional dish which originates from North
Eastern Thailand. Being an Isaan item can have problems for the western taste
buds, with the extreme degree of chilli ‘heat’. This recipe has been
modified, to retain the original taste and texture, but tone down the
spiciness. However, if you wish to increase the amount of chilli powder
indicated this will increase the ‘fire’.
Larb may be prepared as beef, pork or chicken. The recipe
presented here is for chicken as I believe it is the most popular variation.
Serve with side dish of iced sliced cabbage and runner beans.
Ingredients Serves 2-4
Ground chicken 200 gms
Onion diced small 1
Shallots chopped 15gms
Dry-fried rice 1 tbspn
Fish sauce 1 tbspn
Lemon juice 1 tspn
Chilli powder 1 pinch
Mint and dill leaves for garnish
Dry-fry rice in a pan or roast in oven till golden brown.
Grind or pound it coarse with mortar and pestle and set aside.
Cook the chicken in a non-stick pan over a low heat. Mix in
the other ingredients, stirring well. Check the mixture for seasoning, adding
more fish sauce or lemon juice to suit and serve, garnishing with mint and dill
on the top.
Ask your local US Consul
I tried to get something notarized on Thursday afternoon
and was told I had to come on Monday or Wednesday between 1 and 3:30. What
is the deal with you people at the Consulate working a 7-hour week?
- A. Noid
Dear Mr./Ms. Noid:
You know what annoys me? Hollywood actors. I mean, think
about it: Tom Hanks received millions of dollars for “Castaway,” and
worked for, what? All of 145 minutes?
My point being, gentle Noid, that we can quibble about
whether Hanks’ salary is any less obscene if we figure in the time he
spent growing a bushy beard for the role and gaining and losing 55 pounds,
but he most certainly worked for more than the 145 minutes we see him on the
screen. The same thing, of course, goes for work at Consulate, except that
the beard was a lot harder to grow (the weight was a cinch to gain), and the
salary isn’t even a little burlesque.
American Citizen Service window hours is the small,
7-hour tip of an iceberg. The other 43 hour-per-week submerged slab of cold,
hard reality is comprised of visa window hours; processing time for visas,
passports, reports of birth, reports of death, and federal benefits checks;
inventorying and shipping the estates of the deceased; visiting prisoners;
repatriating destitute citizens; accounting paperwork (fees and materials);
reports; correspondence (telephone, letters, and fax); and responding to
various taskings from both the Embassy in Bangkok and the State Department
in Washington. All this is the routine stuff; I’m not even mentioning the
crises and emergencies, which are also routine in frequency, but harder to
describe (ranging over but certainly not limited to bites from monkeys,
pachyderms, and bargirls; naked hotel loungings and defecations; medication
eschewals; and internecine warfare. And that’s just the Consulate staff).
In a larger embassy, such as - well, just about anywhere
in the world other than Micronesia, really - there are different,
specialized sections to deal with each of these issues. In Bangkok, for
instance, there are 30 employees who do nothing but consular affairs every
day. In Chiang Mai, which covers the same breadth of issues, albeit on a
smaller scale, there are 3. For the needs of sanity and fairness to those
with crisis situations (the ones not mentioned above - child abductions,
death threats, and life-threatening injuries), we have to corral routine
transactions into certain specified times.
Because the U.S. expatriate community has been growing,
and, with it, demands for citizen services, we expanded our hours as of
March this year. Now, if you need a non-fee service, such as extra passport
pages, registration, or picking up checks, forms, or completed passports -
not notarials, sorry - you can opt to come in between 8 and 10:30 on
Tuesday, Thursday, or Friday mornings, thus doing your bit to reduce the
lines during the regular hours. Next year, with the addition of another
officer, we hope to do more of our bit, garnering a little more screen time
and opening for all services on those mornings as well. Watch this space for
In the meantime, you can save yourself some hassle by
arming yourself with the facts before you make the trek in. Our
long-promised informational recordings are now on-line, where you can learn
about the types and times of services offered, what to bring, visa
categories, and even whether the passport you applied for is ready. Just
phone 053-252-629, and press “1” to get to the consular section menu.
And please give my regards to your brother, Para - he’s
a very loyal customer of ours.
Have a question about visas, passports, travel to the
United States, services for American citizens, or related issues? Ask the
Consul. Send your e-mail to [email protected] with “ask the consul” in
the subject line. If your question isn’t selected, you can get an answer
by calling the Consulate at 053-252-629, from 8 to 4.