House Costs vs. Your BUDGET

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House Costs vs. Your BUDGET

Postby jazzman » Sun Oct 05, 2008 6:51 pm

This forum - and my mailbox - is full of messages like these:

I’m retiring in two years and I am thinking of settling in Isaan. How much does it cost to build a house there?

How much does it cost to build a house in Thailand?
My instinct would be to rally an equally rhetorical question such as “How long is apiece of string?” or “How deep is water?”

Let’s face it, how many of us go around asking, “How much does a car cost?”; and in the current economical climate, who knows what prices will be in two, or only one year's time?
And even more to the point, how many of us would order a Ferrari, a Morgan, or a BMW, and tell the factory to save on the routine assembly checks? Or tell them to leave out the seat belts, the brakes, and the spare wheel? Or buy a billion inch flatpanel HDTV with home theatre surround sound, and then not be able to afford the transponder & monthly satellite subscription?
Tomissan wrote:(20 years in Thailand). One question I see a lot of throughout different forums is "what is the cost to build". a tough question by anyones standards since there are so many variables; most specifically, "Location". It's well known that the cost per Square Meter in or near the resort areas are far higher than upcountry, sometimes 2-3 times more for about the same thing and there are many reasons......Tom

Let’s start with some very basic facts.

First and foremost, unless you are buying a ready built house on a piece of land (in which case you can skip this article), you will need to divorce the cost of the land from the cost of the house. This will be more difficult for the Brits, because in the UK it is rare to buy one without the other, the selling price there is a lump sum for both, you can’t generally build your own house anyway and your choice is usually limited to a second-hand house or the selection on a housing estate (development).
Land and houses in Thailand are only a fraction of the cost in Western countries. However, if you can’t afford the luxury of a second home in Thailand and the other costs it entails, or if you try doing something even cheaper that is already cheap, don’t bother - stay home and buy a new SUV or a boat instead, or treat yourself to a cruise.

The land
There’s not much you can do about the price of the land and Thai vendors won’t usually bargain with farangs. They would rather not sell and go hungry or sell cheaper to a Thai. There are no nationwide criteria for land selling prices, but most province land offices maintain a land value index for the purpose of calculating land tax. Just to give you an idea, in godforsaken Mukdahan, a small city in the remoter swathes of Isaan, the asking price for land is more than that of prime land 20minutes from the beach in Pattaya !
You will also need to know about any legal costs of acquiring the land and transfer tax.

Houses
If you want a typical Thai version of a modern Thai house, i.e. no kitchen, no running water inside the house, hole-in-the-floor bathroom, and tin roof, you can certain build a 3-bedroom home for 300,000 baht. You won’t live in it, but your wife's family will be happy to invade it.
For the rest, the sky’s the limit.
At the entry level of comfort and convenience for farangs, Dozer and Jazzman have built perfectly acceptable, but modest homes for about 700,000 baht or under $20,000 (at pre 2009 rates of exchange). For any one living here on a Western salary, or anyone still living and working in a western country, this is a ridiculously small sum of money when compared with the cost of an equivalent house in France or Germany, and where you might already own the land. Economy turn-key solutions are still possible from around 8,000 baht per square metre, but most contactors charge from 10,000 and the sky's the limit. If you purchase all the materials yourself, hire your own labour, and manage the project yourself, your DIY project could start from as little as 7,000 baht / m2.

Design work
Money can be saved either by obtaining available free plans (eg from the Crossy site), coming to an arrangement with someone who has already built or had a house built, for his/her set of plans. If you wish to design your own house from scratch, unless you have experience of what is technically possible, you will most likely need some advice - there will always be things you didn't think of. For a reasonable cost an architect or a draughtsman can put your plans into working drawings (shop drawings) which you can also submit to the local authorities for construction permission. However, if you have to employ their creative thinking (conceptual design), or engineering skills, this will cost considerably more: 350 baht / m2 is a starting point, and 5 - 10% of the overall budget are a common fee calculation..

Costs

There are other costs involved, such as planning permission (if applicable), and getting connected to essential utilities. The legal fees, and architects fees, also need taking into consideration. Not calculating these costs into your construction budget could make or break your project. I’m not suggesting for a moment that youeyou hire the best consultant in Bangkok to oversee the construction of your 650,000 baht home; but if you have no construction knowledge a project manager for a ฿2,000,000+ house is worth considering, and is absolutely indispensable if you are not going to be around much while it is being built. The things that are going to go wrong- and will - will certainly cost more than his fees to put right, (see: http://www.coolthaihouse.com/cthpics/th ... p?album=81), and Thai builders rarely honour any guarantees once they have pocketed their last payment and gone back to their farms. Good professionals will offer plenty of free advice and wil only raise a fee when they actually have to move on your behalf or put pen to paper.

Visas
If you are going to build a house in Thailand, chances are that you will stay there for long periods, or visit the country regularly. Consider if the current inconvenience of visas and their regular costs are sustainable on the long term. For many living on a pension, expensive flights back home for new visas, or keeping up to ฿800,000 in the bank, may not be so palatable. Looking into the current regulations, which tend to change with alarming alacrity, and if you think you will be leaving the country every 15 months or so, you might take into consideration the possibility of getting the longest multiple-entry tourist visa available, or a multiple-entry visa 'B' or 'O'.


Your Budget

This is what this article is all about and we can come to a quick conclusion.
You have to ask yourself five distinctly different questions:

    • How much do I have?
    • How much can I afford?
    • How much do I want to spend?
    • How much have I already got in the bank in Thailand?
    • How much is my £, $, € worth now?
If you only have 2 million baht in the bank and decide to build a 2 million baht house you are asking to get into serious trouble, wasting your money, and ending up with a half finished house. Look around and see what you can get built for 1.5 million, calculate the square metre cost and add to the size of your project according to that, and calculate a 15 - 20% contingency mrgin.

If you are reasonably well off, with an above-average British or American salary, have no mortgage, hire-purchase back home, no kids in college back home, consider a total project (land + labour/materials + costs) from 2,000,000 baht.

If you are comfortably well off, with an above-average British or American salary, have no mortgage, hire-purchase back home, no kids in college back home, and money in the bank; consider a total project (land + labour/materials + costs) from 6,000,000 baht.

If you are rich by average Western standards, there is still no sense in throwing around with your money. Unless you're a complete and utter show-off, and if money is absolutely no object, then by all means be ambitious, but don’t build bigger than you need, don’t include more luxury than you really need, and be absolutely sure to engage the services of a proper architect, and a project manager. Otherwise your money will buy you a whole lot of frustration, anger and discomfort. Rich people are supposed to enjoy a laid-back, trouble free life. The experience of others and the free advice the on CTH Do-It-Yourself forum is excellent, and exposes all points of view.

Conclusion
If you are thinking of building a X million baht house, either increase your budget by up to 20% or or set your sights lower, otherwise you are certainly going to be sailing too close to the wind.
In all cases, your budget should include a calculated contingency for all professional fees, whether you use them or not.
After reading through this article and others on the board and having checked out some offers on develpers' and real estate webites, you will have a very basic idea already; your entire project begins with the amount you can, or want, to spend. The kind of question you should be asking is something like:

I have set aside ฿ XXXXXXX for acquiring X rai (or m3) of land in [place name] and building an X-bedroom XX-storey house, at entry-level/stardard level/luxury level; what will this get me?
Last edited by jazzman on Tue Mar 17, 2009 11:21 am, edited 3 times in total.
How to build a $20,000 / £14,000 house and a $???? MOTEL Updated 21 March 09 - with BOQ and costs
Don't let this happen in YOUR house.
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Re: House Costs vs. Your BUDGET

Postby Tomissan » Tue Oct 07, 2008 11:45 am

Jazzman, that is a very valuable post although based on my experience, not many will listen to words of wisdom and will continue on with their project getting all the free information & advice that will almost always dig a bigger hole and end up with a less than desirable house and will spend many years on fixing, replacing, etc. It's unfortunate that some people think building here is easy until they get into it and even more people think that if you are spending several million baht and hiring a 'reputable' builder that it's all downhill........If one takes the time to read through all the information made available in this forum based on 'real experience' & not hearsay from armchair experts, then the possibility of building a house with integrity is certainly possible....on the other hand, for someone with little or no construction experience and doesn't speak Thai or have building experience in Thailand, you're in for a ride, and not a pleasant Sunday drive or walk in the park. Sure, there are exceptions, but very few.

What amazes me more than anything else is that most foreigner's think since this is Thailand then 'everything' should be cheaper. ...example? You can get plans drawn by a Thai Architect usually cheaper than if a farang Architect does them but will they both be identical in terms of 'standards'. How is it possible to expect to get western style and standards from an Architect without 'western' experience? If you look at standard Thai construction plans you will almost always find: bedrooms are too small, bathrooms are too small, kitchens are too small and very little thought or imagination in the design of all the above.

Those who have lived in Thailand a long time know about the lack of: creativity, integrity, honesty, guarantee's, etc., etc. and because they've hired a lawyer to draw up a detailed contract soon learn it's not worth the time and money to take it to court if all goes sour.....so...be smart and do it right the first time even if you think you have to spend a bit more....and one more note....I've not found anywhere else on the internet where you can find so much detailed information about building in Thailand....my hat's off to the administrator's of this site and to those who share their priceless experiences.....personally, I think they give too much.....
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Re: House Costs vs. Your BUDGET

Postby jazzman » Tue Oct 07, 2008 12:13 pm

Thai architects are usually cheaper because they are living in their own environment, don't eat steak, don"t drink wine, and don't have to do visa runs, pay visa fess, and do the occasional expensive trip back home :D

Thai architects waste space on expansive bathrooms or build them too small, don't understand western kitchens, and always forget a utility room, broom cupboard, or boot 'n shoe closet ' - they leave their flip-flops on the stoop...

They tend to build on their perceived idea of what a house for a foreigner should be like, although hardly any of them have ever travelled outside the Kingdom. Their knowledge of Western architecture seems to be more based on the film sets of Hollywood movies than anything else. And they think we have movie-star salaries.
How to build a $20,000 / £14,000 house and a $???? MOTEL Updated 21 March 09 - with BOQ and costs
Don't let this happen in YOUR house.
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Re: House Costs vs. Your BUDGET

Postby chiangmaiexpat » Fri Nov 21, 2008 4:55 pm

Good advice indeed. Planning with a 20% or 30% financial buffer for extras and unforeseen expenses is probably universally valid, not only in Thailand. Even when my parents built their house 30 years ago this was the case. In our ongoing home construction in Chiang Mai, we had unexpected material costs, because the steel price sky-rocketed in 2008. The custom-made windows and doors also turned out to be more expensive than planned. Everything else pretty much staid within the anticipated budget. There will always be some hidden cost, something that you or your contractor didn't think of when beginning the project. The situation is quite analogous to software construction (the field I am working in), so this all sounds very familiar to me. Actually, the financial risk/uncertainty in software development is higher. If one is not comfortable with the risk/uncertainty involved, or if one cannot dedicate enough time to the design process, then building a custom house is probably not a good option. Buying a finished house would be better in this case. Just my 2 cents.

Cheers, CMX
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Re: House Costs vs. Your BUDGET

Postby thomas.fontaine » Fri Nov 21, 2008 6:08 pm

I obviously agree with all the things being said here. I would also add that, if people like us don't buy a house and prefer to built it, is because 1. we like to be involved in the process of making the house and 2. we like the risk and manage it the best we can (are we crazy here?).

When it comes to actual cost of building versus the initial budget, I think it also depends on how hard you want to stick with your budget. In your case ChiangMaiexpat, you could have gone for cheaper doors and windows but you agreed to increase your budget because you liked the custom made ones and could afford it. In some other cases, one has to go for inferior quality or design product than what he initialy planed to stick with the budget.
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Re: House Costs vs. Your BUDGET

Postby geordie » Fri Nov 21, 2008 7:04 pm

hmm good advice all round so far but no emphasis on the current economic climate having just got out of bed in the uk to be told that two weeks time I AM building a house for mum in law it concerns me the way the £ has took a high dive and material prices are going the other way UP; in real terms 20%-30% should be barely enough Ihow do you allow for a budget now I have had dozens of discusions with the wife is it her or do thais in general not understand BUDGET she seems to think a plastic friend in your wallet means elastic and stretches to anything anyway all it means to me is a ruined expensive holiday and a downgrade on the quality of her mums house ie smaller with cheaper doors plumbing roof not a good atitude with which to be building a HOME and not a project to be proud of still it will be an improvement on the current house which floods for six months of the year due to not building up the ground
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Re: House Costs vs. Your BUDGET

Postby jazzman » Fri Nov 21, 2008 10:51 pm

Steel prices and car fuel have now dropped dramatically. This is good news for people who live and earn their money in Thailand. I have been priced out of continuing with the projects I have for my land for nearly a year and a half, but now I can go ahead post haste and get stocks of steel in before the prices rise again. And they will. Right opposite my house is a disused filling station that was closed down when fuel got so expensive people just stopped buying it. I will use the tanks to invest in several thousand litres of diesel.
Not such good news for the people in the UK who haven't transferred their money to Thailand yet with the £ at a record low of only 52.50 baht.
Good news however for Americans with the dollar at 35.24 baht.

There is nothing we can do to influence the exchange rates, but as the lead article to this thread shows, there is a lot we can do to manage our disposable incomes and budget sensibly for construction projects in Thailand.

Whilst Thomas may be right about it being fun to get involved in building your own house, it may not be so realistic to assume that all CTH members are willing to gamble and take risks with their meagre savings or their pensions.
How to build a $20,000 / £14,000 house and a $???? MOTEL Updated 21 March 09 - with BOQ and costs
Don't let this happen in YOUR house.
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Re: House Costs vs. Your BUDGET

Postby geordie » Fri Nov 21, 2008 11:10 pm

I remember savings they are what i had before i married 8 years ago now ijust shrug and add another year to my retirement plans at least I can do that .Given the current rates as you stated jman it must be hell for anyone with uk based funds on a pension fixed income ect Or a wife that is insisting the house must be built NOW;;

JAZZMAN HAVE YOU RECEIVED A PM IVE BEEN HAVING TROULE (TECHNOLOGY//)
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Re: House Costs vs. Your BUDGET

Postby jazzman » Sat Nov 22, 2008 12:57 am

They should be so lucky - nobody will give me a pension :(
How to build a $20,000 / £14,000 house and a $???? MOTEL Updated 21 March 09 - with BOQ and costs
Don't let this happen in YOUR house.
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Re: House Costs vs. Your BUDGET

Postby geordie » Sat Nov 22, 2008 6:47 am

come back to uk and sighn up for one half the world has

how mutch fuel do u use that you need your own gas station or is this instead of a bar?? :lol: :lol:
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Re: House Costs vs. Your BUDGET

Postby chiangmaiexpat » Sat Nov 22, 2008 4:26 pm

thomas.fontaine wrote:I would also add that, if people like us don't buy a house and prefer to built it, is because 1. we like to be involved in the process of making the house and 2. we like the risk and manage it the best we can (are we crazy here?).


No, I don't really like the financial risk, neither do I like all the trouble involved in building a house. :wink: The main reason for us to build a custom house is to get something that is designed to fit our needs. After fifteen years of renting places in TH, I am a bit tired of badly designed houses, wacky interior design, and capricious landlords. Actually, the housing quality in Bangkok isn't that bad, but in the provinces -including Chiang Mai- it isn't all that dazzling. When you are planning to live in a place for a longer time, it may be worth the effort to "roll your own". Another important advantage is that custom house building generally gives you better value for your money. Before we started building this house, we looked around in Chiang Mai for finished houses in the local Moo Baans. In three or four years, I've seen hundreds of Moo Baan offerings both in Chiang Mai and in Bangkok. Very few of them were good offers. Houses that were sold for 4-5 million probably cost less than 3 million to build. They often lack proper kitchens, storage rooms, or have tiny bedrooms. The land prices within Moo Baan compounds are generally double or more of the land price outside. It's very obvious that these houses are built for profit. In my opinion, they only have two advantages: (1) instant gratification, and (2) they come with financing. If you can dispense with both, it's financially as well as architecturally more attractive to build a custom house. We are still living in a Moo Baan. This Moo Baan sells houses of a size and quality comparable to the one we are building for roughly 8 million Baht with 400-500 sqm land instead of 1000 sqm. The location is almost the same (about 1km distance). This means we will get a custom designed house with twice as much land for 35% less. Then, of course, there is the second hand house market. With a bit of patience and enough petrol in your tank, it is possible to find financially attractive offers in this market, but it's likely that you have to make compromises with architecture, interior, and location. So, I still think that custom building is the best option if you can put in the time, sweat, and money.

Cheers, CMX
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Re: House Costs vs. Your BUDGET

Postby Karl » Sat Nov 22, 2008 5:01 pm

I hear you expat, I bought a house like that 2 years ago, cos the rents are ridiculous here and I was sick of staying in hotels.
After 1 year I started doubting the whole idea, walls not straight, useless corners, paint comming off, so there's only 1 coat,...Big potential, but wrongly build
So I bought some land last year to actually build a custom one that I will really like.
I don't really like the risk, nore to be involved, all I would want is to find the one that suits me for the price close to the actual value, but I think I'm 10 years to late for that.
All I need now is the economy getting better and the exchange rate, making my mind up on the layout and then hope all goes well to build it.

I have my business in Spain, on the Costa Blanca. I've seen the same there in recent years as I see here in the last few years. They keep on building, lowering the quality and size and increasing the prices with stupid amounts and now the whole housingmarket is ruined. Now there's loads of houses for sale, only the size of a townhouse here, where you can hear the neighbours from 2 doors down, a 10 sq m garden for prices as much as 10 million baht :lol: But it's next to a golfcourse :roll:
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Re: House Costs vs. Your BUDGET

Postby thomas.fontaine » Sat Nov 22, 2008 5:41 pm

I realise that we have very different motivations for building a house depending on whether we make it to live in or just to stay in Thailand occasionally. I remember now that when I decided to build my house in France it was because I couldn't manage to find one I liked, so I decided to design one that would suit my need at a reasonable price.
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Re: House Costs vs. Your BUDGET

Postby jazzman » Sat Nov 22, 2008 7:20 pm

geordie wrote:how mutch fuel do u use that you need your own gas station or is this instead of a bar?? :lol: :lol:
No, I' not thinking of reopening the gas station - it's just to get some stock of diesel in while the prices are so low. We live in an extremely remote area and with 38 km to the nearest 7-Eleven, 80 km to any proper shops, and frequent 1,400 km round trips to the rest of civilisation, we certainly get through some fuel.
How to build a $20,000 / £14,000 house and a $???? MOTEL Updated 21 March 09 - with BOQ and costs
Don't let this happen in YOUR house.
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Re: House Costs vs. Your BUDGET

Postby chiangmaiexpat » Mon Nov 24, 2008 9:20 am

Karl wrote:I have my business in Spain, on the Costa Blanca. I've seen the same there in recent years as I see here in the last few years.


Compared to Spain, prices in Thailand are still very low, though -as you already mentioned- land prices and the cost of construction materials increase steadily. I've been in Spain more than a dozen times, first in 1976 with my parents, shortly after Franco died. Back then everything in Spain was as inexpensive as in Thailand, including property. Within the following 20 years this has totally changed, however. Whenever I came to Spain during the 80s and 90s, I was amazed at the development year by year. By now they have a seamless concrete rim that covers the entire Mediterranean coast from Lloret de Mar all the way to Huelva. What surprised me in Spain is that they even built in locations that would be considered unbuildable elsewhere, such as cliff lines and bare rock. Unfortunately, many of these new artificial villages have a certain "ant colony" feel to it. :D

jazzman wrote:We live in an extremely remote area and with 38 km to the nearest 7-Eleven, 80 km to any proper shops, and frequent 1,400 km round trips to the rest of civilisation, we certainly get through some fuel.


Wow. Maybe you should think about acquiring a pilot license and a small aircraft. :D

Cheers, CMX
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