Author Topic: Low Cash on Cash Return  (Read 1523 times)

mcampbell

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Low Cash on Cash Return
« on: January 30, 2016, 06:03:51 AM »
The housing market I'm in is Bangkok, Thailand. Its really strange the cash on cash return is regularly like 5-6% on all the condo market. It seems like the market has priced it cause its a pretty tight spread across a very large city. Anyone else in markets outside the US experience this also? It seems like margins are pretty beaten down, maybe people are expecting appreciation?

For example a $250,000 (USD) condo is renting for $1400 a month and this is one of the higher yield units.

NoNonsenseLandlord

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Re: Low Cash on Cash Return
« Reply #1 on: January 30, 2016, 06:10:34 AM »
That is true in a lot of places.  If you want to live there, go for it.  If you are an investor, wait.

GrowingTheGreen

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Re: Low Cash on Cash Return
« Reply #2 on: January 30, 2016, 07:48:50 AM »
Markets are local.  It's tougher to find deals in a lot of the big/capital cities.

zephyr911

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Re: Low Cash on Cash Return
« Reply #3 on: February 07, 2016, 05:45:45 PM »
Yeah, that's not gonna cash flow unless you sink a ton of cash in. Look elsewhere.
Semi-FIREd December 2017, part-time entrepreneur, lover of puppies and saltwater.

Johnny Aloha

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Re: Low Cash on Cash Return
« Reply #4 on: February 08, 2016, 05:20:48 AM »
Have you talked to other investors in that market, rather than getting advice from people who might have never even been to Bangkok?

mcampbell

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Re: Low Cash on Cash Return
« Reply #5 on: February 08, 2016, 05:21:51 AM »
Anyone local who calls themselves an "investor" knows about half as much as people on the board or they are a scam artist

Bearded Man

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Re: Low Cash on Cash Return
« Reply #6 on: February 08, 2016, 01:32:13 PM »
Phil Pustejovsky (sp?) has a great video on this. You can increase your cash flow by doing student or vacation rentals, renting by the room if it has many bedrooms, or if the law allows it there, doing a lease to own agreement. I am going to try that one next time a tenant moves out. You get a down payment which if they don't buy the house within the contract term, you get to keep. This increases your profits.

Also, this is a great way of selling a house without paying buyers OR sellers agent fees.

Johnny Aloha

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Re: Low Cash on Cash Return
« Reply #7 on: February 09, 2016, 01:38:29 AM »
Anyone local who calls themselves an "investor" knows about half as much as people on the board or they are a scam artist

You haven't networked enough.  I have spent a lot of time in Bangkok, so I understand exactly what you are saying.  But I've got a feeling there are some pretty experienced and knowledgeable investors - you'll have to look pretty hard to find them though.

Also, think about your risks.  On top of all the regular RE risks (such as liquidity, credit, etc), you have country stability risks.  What is the impact of those pesky military coups?