Building a House – It Will Cost More Than You Planned For

I have written before on Expats buying land and building in Thailand. I have suggested that renting might be the preferred way to go for a number of reasons. A lot depends on your relationships to Thais and Thailand, and how much money you can free up; money that you won’t need for day-to-day living and health care.

(Full disclosure: I have bought and built here in Thailand.)

The biggest problem we Expats face of course, is that foreigners are forbidden to own land in Thailand. So any purchase of land would have to be in a Thai’s name (although there are a few loopholes to these laws). When something you think you own is officially in someone else’s name misunderstandings and trouble often follow. The second is that as we get older it is probably a good idea to have a large part of our cash in liquid form instead of in hard to sell real estate. (My rule of thumb is, Do I have enough cash to pay for a heart bypass operation?) In Thailand many find that buying a property is easy, but when you need the cash, selling, not so much.

If you are like I am, you have lived a life where owning property is what you have dreamed of and striven for most of your life. It is very possibly written into our DNA. I heard someone say once again last week when I broached the idea of renting, “I just feel better when I own something.”

Not sure I agree with that thinking but there is probably no changing that guy’s mind. And there are lots who think the same way. So I thought I might share a bit of experience I have in buying, and building here in Thailand. There are lots of books and posts on buying land and building here, and you should Google all you can.

This post instead, will focus on the hidden and unexpected costs we will incur when building that dream house, or even just a place to lay your weary heads. Not sure I have covered everything but it will at least give you an idea.

Caveat: A lot will depend on if you will be building in a gated community or out in the “real world”. Some gated communities advertise that all you will need is a suitcase to be able to move right in to the house you bought. Much of the following extras I cover below will be incurred if, 1. You decide to change a gated community’s house and garden design specifications, or 2. You decide to buy and build out in the “real world”.

(Full disclosure: I have done both.)

Note: A lot of these costs will be incurred building a house anywhere in the world.

*****

Transfer fees and taxes

Fees and taxes aren’t too high here but how much you will owe will depend on the official estimate of the price of the land you bought and/or the price you paid.  The fees and taxes can be paid in three ways. 1. The buyer pays the full amount. 2. The seller pays the full amount. 3. The amount is split with the buyer and seller paying an agreed upon part. This will have to be negotiated before money changes hands.

Architect and blue printing costs

You’ll need to get a building permit from the local land office. To obtain this you will need official blueprints from an architect and inspections will have to be made. Architects can charge you in one of two ways. 1. They will charge using an agreed amount, so much per the square footage of the house. 2. They will charge a lump sum. Again, negotiations will determine this.

The land

When preparing the land for the dream house to be built upon there are a number of costs you will incur above and beyond the price of the land. Some of the following will be included in the builder’s estimate, especially in gated communities. Some not.

Land fill

If you buy low lying land, such as rice field land, you may have to raise it up above flood level, or have it reach the level of the road that passes by. This cost will depend on the type of fill you use; top soil, mountain soil (where nothing much grows), clay, sand, etc. You will be charged by the truck load. Also you will need to hire a tractor or backhoe to spread out and even up the land. The cost will depend on the quality of the land fill and how high you will need to go.

Garden and lawn

Once the land is to the level you need you may have to wait a season or two for it to settle. The longer you have the better and more solid your foundation will be. Then you can start your garden. Trees, flowers, hedges, lawn. How much you spend will depend on the cost of your plantings (houses in gated communities will usually include this in the home price although you may want to modify or add to it). The larger the trees the more expensive. One thing to consider, depending on your age and how long you think you have left to enjoy your plantings, is smaller and less expensive trees will take much longer (sometimes many years) to mature and enjoy (especially fruit trees).  A large mature tree can cost 100 times what a seedling would cost. You may have to wait to complete your planting until the house is built but trees and large plantings can go in early.

Wall and gate, automatic gate opener

Almost every house in Thailand, as opposed to say an American house, is surrounded by a large wall. Depending on the safety of your neighborhood (in a gated community, outside in a village, in the countryside, in a large city, etc.). The cost of this wall will depend on the building material, its height, and how large a piece of land you will be surrounding. Then you’ll need a gate and if you want, an automatic gate opener. You can get a very plain gate or one of the fancy “estate” type gates. The costs can differ greatly.

Driveway

Your builder may have added the cost of paving your driveway in the initial estimate, or not. Check carefully. The builder may have given you an estimate for a driveway of simple concrete. You may change your mind and want fancy tiles. Everything will depend on your desires. The cost will of course depend on this.

Garden, gate lighting

For safety and aesthetics, garden lighting is something to consider. You can go with fancy lamps or simple. LED lights or solar powered are good ways to go for the long run as they and will decrease the electricity needs, but the initial costs must be added to your estimate.

Patio and patio furniture, barbecue

You may have included a patio in your design. If you haven’t and decide to build one the cost will be affected. Price will depend a lot on its size, the flooring tiles, (Screen enclosed? Roof covered?). Then it will need to be furnished with patio furniture. You can get simple wooden or plastic furniture or real fancy stuff. Outdoor barbecue? Quite cheap in the west, quite expensive here.

Walkway paving

Your garden may require walkways. Paving stones are good for this but can vary greatly in price. You can install them yourself (almost killed myself doing this) or hire workers.

Water connections

Your land may have city water running right up to it or you may have to pay to get it to you. Another way to go is digging a well (cost will depend on various kinds of wells and the depths you’ll need to go). You can also collect rain water. Because city water can sometimes be sporadic you may also need a large water tank and a pump. See what your neighbors are doing.

Electricity connection, poles

Check to see if the power poles pass right by your house. If they don’t you may have to buy and install these poles and pay for connections. Cost will depend on how far you’ll need to get to the nearest power poles.

Garden tools

Depending on how much gardening you intend doing you’ll need the tools. This can become a considerable cost. There will be things like lawnmowers, weed wackers, shovels, hoes, ladders, saws, axes, hammers, wrenches; the list can go on and on.

 

The house

Your new house will be empty. Some things like closets, cabinets, and the like may have been included in the builder’s estimate. Some will not.

Windows and doors

Drapes, rods, hangers

These are big items in Thailand and are much needed to protect your house from the sun and peering eyes. Drapes can be simple things, even homemade, hung by the home owner, or very expensive and fancy, professionally installed. Count how many windows you have and the quality of the drapes. Costs can vary considerably.

Door knobs and locks

You need to count the number of doors you have. If you choose to go with doors and door fixtures above and beyond those chosen by the builder, the costs can rise big time. You may also want more secure locks than come with the house.

Bars

Almost all houses in Thailand will have bars on their windows. But new houses often don’t have them and it will be your responsibility to buy and install them if you so desire. If you decide on window and door bars, count your windows and doors and hopefully you won’t be too shocked.

Screens

May or may not be included in the initial cost estimates.

 

Kitchen

Some of the following will be included in the builder’s estimate, some not. And these are often changed later depending on the home owner’s needs and preferences.

Sinks and faucets (can go really fancy here)

Hot water heater (normal or higher powered)

Counter top (granite, tile, marble, etc.)

Kitchen Island (built in vs. free standing, electricity connected)

Dishwasher (lots of new homeowners choose this way to go)

Cabinets (teak, vinyl, wood, metal built in vs. ready-made)

Refrigerator (normal, side by side, separate freezer)

Microwave

Stove (electric vs.gas, with or without oven)

Bathroom

Thai bathrooms are very simple affairs. Expat bathrooms can be rather elaborate and of course more expensive. Make sure your architect and builder know your needs and preferences.

Faucets (simple to solid gold, yours to choose)

Bathtub (Very few in a Thai home, Expats love them, choose built in or stand-alone)

Hot water heater (like the kitchen you can choose depending on the wattage)

Bedroom

Beds, sheets, pillows, covers (quality decides the cost)

Closets (quite often not included in the house design and in the estimates, built in vs. stand-alone)

Dresser (teak – particle board, and all in between, your choice)

 

Other

Washing machine (size, with/without dryer)

TV., TV service (70” curved 3D or 24” flat screen, and everything in between, TV service has many prices levels and you may need to buy a satellite dish or get cable connected)

Computer, Internet service (Wi-Fi, boosters, speed)

Carpets, floor covering (few Thai house use carpets, wall-to-wall or otherwise, although straw mats are very popular and comfortable – and smell good too. Expats seem to prefer a softer floor covering especially when they are not used to walking barefoot indoors)

Living room furniture (Thai teak, vinyl, Lazy Boy, Louis XVI, lots to choose from)

Dining room furniture (table for 2 – table for 12)

Bookcases

Wall art

 

Changing your mind (and the house plan)

How big a change and how often plans change will make a big impact on your costs.

“I know the plan calls for the bathroom to be on the right side but let’s put it on the left.”

“I think we could use a sky light right here.”

“The windows are too small. We need to enlarge them.”

“The porch stairs are on the wrong side. We will need to move them.”

“I don’t like these tiles. Tear them out and use the new ones.”

The above are quotes that I have actually heard (and, now I’m not admitting anything, maybe said myself).

 

Cost of renting a home while you wait for yours to be finished.

While your home is being built (6 months – a year or more) you’ll need to live somewhere. A lot of us forget this part. Say you go towards the middle and pay 10,000 a month for rent. Six months will be 60,000 baht; a year will be 120,000 baht. Pay more for rent?  You do the math. This cost will need to be prepared for.

*****

To conclude, when I remodeled my house back in Seattle (three times), after some experience, I found that I needed to take my initial cost estimate and multiply that number by 1.5 if I were to end up having enough to complete the project. So if I estimated that the work and materials would cost $10,000 I would prepare $15,000. It turns out that that worked out just about right to protect myself from the inevitable shock of seeing the final price.

Buying and building here in Thailand has so many variables (workers’ dependability like leaving for 2 weeks during Songkran or simply not showing up for days at a time, builder working on more than one site at a time and needing to pull workers off your project to work on another, undoing mistakes, redoing changes of mind, rainy season delays, unavailability of the materials you need, your neighbors making legal complaints, inflation in the cost of materials, etc., etc.) It makes it harder to come up with a specific number like I could in Seattle.

But here is a suggestion that worked for me, and I advise anyone thinking of buying and building to talk to as many Expats who have done the same and find out their thinking on this. From my experience it has gone something like:

1. Land seller gives me the cost of the land.
2. Builder give me his estimate on what the house I am planning on will cost.
3. Add the two numbers together, or if buying in a gated community, take the quoted home price.
4. Multiply this number by 1.5 if you are building in a gated community, at least by 2 otherwise.
5. Now, with this number in mind, you’ll have prepared enough and you won’t die from a heart attack when you add up the final totals. And you’ll survive and be able to take that suitcase and move right into your dream home.

Lots, and lots of luck.

Cost of Living in Thailand Part II

We continue with how much living in Thailand might cost you.  All prices are Chiang Mai prices and are as of today, Mar 1, 2010, and of course are subject to change.  All prices are approximates.  Local prices will vary greatly.   Check the daily exchange rate at www.bangkokbank.com .

Getting around town

You’ll need to get around, from one town to another, or from your home to the local market, etc..  Here is some idea of how much it will cost to get from A to B.  When you first arrive in country you will probably be using public transportation.  This can be an interesting experience. Here are some typical prices in Chiang Mai.

• Metered Taxis, house to airport, approx 10 kms, ฿150
• Red taxis (converted pickup trucks), ฿15 anywhere in town, longer rides negotiable.
• Public bus, when you can find one, ฿10
• Other pickup taxis, usually upcountry between towns and villages, ฿20 or more depending on the distance.
• Bangkok and some towns will have motorcycle taxis where you ride on the back to your destination.  These are quite inexpensive as the rides are usually very short (main road to your house).  Some towns have motorcycles with side cars or other homemade additions.  These will cost about the same as Chiang Mai’s red taxis.

Later, out of convenience, most people opt to get their own transportation.

Travel in country

One of the joys of living in Thailand is that there are so many interesting places to visit in country.  You have many choices on how to get around.

Air travel – There are quite a few airlines that service the different cities in Thailand.  Here are a few popular destinations on Thai Air. Other airlines may be quite cheaper.  Prices quoted are for round trip and are taken from the Thai Air web site.    Check with a travel agent or the airline itself to see what promotional deals they have.  It can save loads of money.  (e.g. We just bought a round trip ticket Chiang Mai – Phuket for ฿8,500 on Air Asia which is much less than the price for Thai Air quoted below).  Also, prices will vary depending on the season.

• Bangkok – Chiang Mai           ฿5,200
• Bangkok – Phuket                  ฿6,500
• Bangkok – Ubon                     ฿6,400
• Chiang Mai – Phuket              ฿14,400
• Chiang Mai – Mae Hongson   ฿3,250

Trains

A nice way to get around.  For long hauls the sleeper cars can be comfortable although they are quite slow.  Prices are for 2^nd class, air condition, sleeper cars.

• Bangkok – Chiang Mai           ฿881
• Bangkok – Ubon                     ฿761
• Bangkok – Hat Yai                  ฿945

Bus

Seems like there are buses going from everywhere in Thailand to everywhere else.  There is a range from really inexpensive, non-air conditioned buses to beautiful tour buses with air conditioning, music, TV, and DVDs.  Here are some prices for the first class, air condition, “tour” buses.

• Bangkok – Chiang Mai           ฿1,197
• Bangkok – Ubon                     ฿1,080
• Bangkok – Hat Yai                  ฿1,243

Automobiles

You’ll need a driver’s license to drive a car or motorcycle in Thailand.  Officially you can use your old home license for one month.  Only residence of Thailand (with long term visas) are allowed to apply for a driver’s license.

• Rent    Small compact car, liability insurance included, ฿1,500 per day with monthly rates cheaper
• Buy     Used 5 year old Toyota, good condition, ฿275,000

Motorcycles

Many people rent motorcycles as soon as they get in country.  This should not be the first thing you do.  The first thing is to make sure you know how to ride a motorcycle.  And riding one in Thailand can be a harrowing experience.  Be careful, drive defensively,  and always wear a helmet.

• Rent    125 cc new Honda Dream, ฿150 per day
• Buy     New 125cc Honda Dream, ฿36,000
• Used 125 cc Honda Dream, 3 years old, ฿24,000

Accommodations (when traveling in country)

Thailand has so many places to visit and explore, from the big cities, to the mountains up north, to the beaches and islands in the south.  For a good idea of what is available check with travel guides like Lonely Planet.

• City hotels – There are luxurious world class resorts in many places and their prices are also world class.  But nice comfortable hotels in population centers, even in Bangkok, will cost between ฿1,200 – ฿3,000.
• Upcountry hotels – Not a lot of world class hotels up country unless you are in a tourist destination.  Nice clean places can be had for ฿500 – ฿1000.
• Guest houses – Can be as low as ฿200 – ฿600.  You’ usually get what you pay for.
• National Parks – Thailand has a great national parks system and they all seem to have cabins and bungalows available (except on national holidays and in the high seasons).  A very nice bungalow can be had for ฿1,000 per night.
• Camping – For  ฿50 – ฿100 you can bed down in a national park tent (provided).  When Thais go tenting they tend to stay up singing and drinking all through the night.  So be aware that tranquility is something not found much in the tent grounds.

Communications

It used to be keeping connected to friends and family, and with your culture back home was quite difficult.  The 21^st century communications system takes much of the isolation away from living so far from what we used to call “home”.

Cell phone

• Cost of phone – ฿1,000 – ฿10,000
• Cost of call (using prepaid cards) In country –  ฿1 per minute in country
• Cost of call (using prepaid cards) Overseas – ฿5 per minute

Skype

• Computer to phone –  less than ฿1 per minute anywhere
• Computer to computer – free (webcam available)

Home phone – Very expensive to get a line to your home.  If one already exists then it is a flat rate of about ฿150 per month plus whatever calls you make at between ฿2 and ฿5 per minute depending on your plan.

Internet

• Internet cafes – ฿10 – ฿30 per hour depending on speed.
• Home internet – This is usually part of your phone bill.  High speed Internet can be around ฿1,600 per month.

Postage – Quite inexpensive in country.  Just a few baht per letter and packages are also cheap to send.  International mail is very expensive, especially EPS, or express mail.  A small package sent EPS overseas can be more than ฿600.

Food

One has to eat, and in Thailand this becomes as much of a recreation as it is a necessity.  As with everything, one can live very frugally.  You could survive on ฿100 per day if need be.  Or lunch alone could cost many thousands of baht.  We’ll give supermarket prices here leaning more to the frugal side.

Cooking at home (condos may not have kitchens)

• One kilo of chicken ฿65 per kilo
• One kilo of pork ฿105 per kilo
• Fish (talapia) ฿89 per kilo
• Shrimp ฿125 per kilo
• Eggs ฿89 for 30
• Milk ฿70 per liter
• Soft drink ฿124 for 12 bottles
• Kale ฿24 per kilo
• Iceberg lettuce  ฿55 per kilo
• Tomatoes ฿23 per kilo
• Cabbage ฿22 per kilo
• Rice ฿18 per liter

Eating at restaurants

As with just about everything in Thailand, you can end up spending very little for a nice meal, or you can spend as much as you would in a major world city.  We’ll go with the lower end of the spectrum here.

Single plate dishes

• Servings with rice  – ฿25 – ฿60
• Noodles – ฿24 – ฿40
• Family style – prices vary, ฿50 –  ฿100 per dish, usually a meal has at least 3 dishes

Western

• Pizza – ฿300
• Burgers – ฿150
• Spaghetti – ฿150 plate

Fast Food

• McDonalds Big Mac meal –  ฿130
• KFC – 3 piece meal – ฿120

Buffets

• From ฿70 – ฿140 at less expensive places
• As much as ฿600 at the nicer hotels

Drink

A large number of expats fill a large portion of their day imbibing.  Probably not a great idea for longevity but to each his own.  Whichever kind you choose, Thailand’s hot climate makes it so you’ll have to fill yourself with liquids.  Here is a list of of what some of these will cost.

• Bottled water ฿10
• Soft drinks ฿20
• Beer  ฿50 – ฿100 depending on size.  Some bars will be much higher
• Wine – ฿400 and up
• Whisky, gin vodka, etc.   ฿1,000 per bottle and up
• Fresh juice, shakes – ฿20 – ฿40

Coffee

• At a Thai shop ฿20 – ฿60
• At Starbucks ฿150 or more

Miscellaneous

We’ll just list a few here.  If you have specific questions please ask it in the comments section and I will see if I can get you an answer.

• Visa renewal – This is one thing that lots of people forget when they make a budget.  All visas, and renewals, currently cost ฿1,900.  This is charged whenever you leave the country and get an exit visa, or renew your retirement visa, or you make a run for the border.  This can get pricey depending on how often you have to do this.  Although all long term visa holders must report to Immigration every 90 days, there is no charge for this.
• Gasoline 1 liter of 95 octane ฿35
• Men’s haircut – ฿70 at a barbershop, ฿350+ at a hair stylist

Reading material

• Bangkok Post & The Nation newspapers – ฿25
• Readers Digest – ฿150
• National Geographic – ฿250
• English paperback books ฿300 – ฿450
• Used paperbacks – ฿40 – ฿80

Electrical goods

• TV – 42” plasma, ฿30,000
• DVD – ฿2,000
• Desktop computer – ฿15,000 – ฿25,000
• Laptop computer – ฿20,000 – ฿30,000

Entertainment

• Night out (bar hopping) – This question was asked on the www.ThaiVisa.com web forum and the answer depends on what activities you partake of, how much you imbibe, and whether you answer the ringing bell and buy the whole bar drinks. You can spend anywhere from 1,000 – 30,000 in a night.
• Movie at a theater – ฿100
• Movie rental – ฿10 – ฿30
• Massage – ฿100 per ½ hour
• Use of a hotel swimming pool (when you are not a guest) – ฿100

Happy spending

Cost of Living in Thailand Part I

One of the biggest questions we had before retiring in Thailand was how much would it cost us?  And the second questions was, would my Social Security pension be enough to live on here?  Everyone is different.  I know someone who is perfectly content to live on ฿10,000 a month. Then there are others where $10,000 a month wouldn’t be enough.  For some people Social Security is more than sufficient and others will have to supplement their pensions with investments and savings.

So instead of trying to answer those questions for you I thought I would break down our living expenses and let you know what we, and friends we know, pay for stuff.  That might help give you an idea of what you will need to live here.  Be aware that prices in Bangkok can be lots more than what we are quoting here and they can also fluctuate (that usually means “go up”) wildly.  The prices given are what we generally experience in Chiang Mai, the country’s second city.

All the prices we give are in Thai baht.  You can see the daily exchange rate on the first page of  http://www.bangkokbank.com.

Accommodation

The big question is “To Buy or Not to Buy”.  Foreigners can own a condo, and they can own a house, but they cannot own the land that the house is on.  Some people need to own things and they look for loopholes in the Thai legal system where they can “own” property here.  Others are content to rent.  My advice, at least when you first get here, is to rent.  (Go to http://www.retire2thailand.com/retire2-real-estate.php for a longer discussion of Thai real estate.)

You can rent or buy just about any level of accommodation imaginable, from a guest house room, to a dormitory, to a one room condo, or a luxurious high rise, to a nice house in the suburbs, to a mansion in the heart of town.  It will all depend on your needs and finances.  You get what you pay for of course so the prices here are estimates and given in a range.  The larger cities will be more expensive, the small towns cheaper.

Guest house –   Cost depends on if you are in a tourist center and how close to the action you are.   Some places may have monthly rates which would be cheaper than daily rates.

• Cost to rent:     ฿200 – ฿600 per day

Dormitory –      You can find these near colleges and universities.  Will definitely have no-frills but will have all the good and bad of living in a dormitory.

• Cost to rent:     ฿1,000 – ฿2,000 per month

Small condo –   Usually rented by the month, are quite a bit higher scale than the dorm rooms, but still very basic.  One room condos are usually about 36-45sq ft.  Cooking is usually not permitted but they may have a refrigerator.

• Cost to rent:     ฿2,000 – ฿3,500  per month
• Cost to buy:  ฿1,000,000 – ฿2,000,000
• Service fee (for owners) : ฿500 per month

Apartments –    Thailand has many nice condo apartments for sale and rent.  These will have air conditioning, security systems and guards, swimming pools, exercise rooms, etc., and be close to shopping and restaurants.  The upscale Bangkok apartments can be rather pricey but will be quite comfortable.  Of course there are luxury apartments for lots more.

• Cost to rent:     ฿7,000 – ฿15,000  per month
• Cost to buy:      ฿2,500,000 – ฿10,000,000
• Service fee (for owners): ฿1000 per month

Houses –          There are many three bedroom, 2 bathroom house in compounds both for rent and sale. These will usually have a living room , kitchen ,and small dining area, and have a small yard and garden.  There are also many upscale housing compounds where houses can rent for many times higher.  Many compounds, especially the higher scale, will have swimming pools, exercise rooms, 24 hour guards, and CCTV.

• Cost to rent:     ฿10,000 – ฿30,000  per month
• Cost to buy:      ฿3,500,000 – ฿10,000,000
• Service fee (for owners): ฿1000 per month

Untilities

Whether you own or rent you will still need to pay for utilities.  These include garbage pickup, water, telephone, and electricity.  Each household will use these utilities differently so I’ll just say what we pay.  There are 2 of us and we live in a 4 bedroom house in a small compound.  These are monthly rates.

• Garbage pickup – ฿20
• Water – ฿1,200
• Electricity Cool season – ฿1,500
• Electricity Hot season (using Air con) – ฿2,000

Next post we’ll cover food, transportation, entertainment, etc