Useful tips about buying houses and renting condos in Chiang Mai

Tips for renting and buying in Chiang Mai

Property advertising is quite vague and unstructured here. The expensive places (20,000 baht and up) will be advertised in the all the local ex-pat magazines, but a good method is to pick an area that appeals to you, enlist a Thai friend's help (for translating) and then drive around looking out for house with 'For Rent' signs outside. Often this is the only way they advertise and can be a good way of finding a gem. But real estate agents are also very helpful at fast tracking this.
Do your homework properly, take your time and gain advice from several quarters. Fleecing foreigners is a popular activity among some here. Generally people are honest but you have little recourse to the law as a foreigner renting here. You'll also have little luck claiming back lost deposits and fees from your agent if things go wrong.
When renting a property for business purposes there will likely be a 'key-money' charge involved which amounts to six months rent or more, depending on the property's location. This is an old Asian tradition which amounts to 'daylight robbery' but is considered the administration fee. Often there may be a middle man involved who is sub-leasing the property and pocketing the key money. Since key money can be secured every time a new tenant arrives it remains in their interests to see your venture fail so you can move on.
Thais have very different tastes when it comes to houses, preferring houses built for status rather than practicality. Since their lives are quite communally oriented, they prefer densely packed new housing estates, rather than secluded and remotely located places. Where Europeans may prefer tropical living with plenty of fresh air, warmth and natural light, Thais prefer to bolt themselves up in air-conditioned rooms with small windows. Of course there are exceptions to the rule and it means that you're more likely to find a great, cheap, place that no one else wants.
Noise is a national pastime in Thailand, and it's likely to really irritate you until you get used to it. Despite being a sleepy city, there's seldom any complete peace and quiet as karaoke machines ring out, village announcements are made over tannoy systems at 6:30 in the morning, neighbours continually build onto their houses and dogs bark all night. Before signing a lease, come back at different times of the day to assess the noise.
Maintenance is a very vague concept here. Once something is built there will be very little upkeep no matter how much effort went into making it look beautiful initially. Things continually break because they weren't installed to a high quality and you'll have to fix them all yourself for the owner certainly won't be willing to.
Water features are popular and many places have pretty little ponds, canals and lakes but these all bring mosquitoes - lots of them. They do, however, help cool things down in the hot season. A big shady garden keeps the glaring sun out but retains the humidity in the rainy season and makes the house interior very dark on cloudy days.
The 'village headman' is an outdated extortionist you may have to deal with. These appointed figureheads may have some sway over the suburb where you plan to build. It won't be long before they show up at the 'farang's doorstep' demanding some sort of fee for an obscure building law.
Many places come with their own furniture, though this varies considerably. Cheap cane furniture can be bought here to supplement what they have given you. Cheaper places may have really uncomfortable beds. The Thais are used to sitting on the floor or sleeping on rock hard coconut husk mattresses.
Check that the phone line works or can be easily installed before taking the place; it could take ages to get one installed and connecting to the internet could be a problem if you are in a condo that cuts calls after 15 minutes.
Addresses are very vague in Thailand; you'll need someone to take you to see the place as directions will be useless.
When signing a contract make sure that you have verified (independently) that the English version you are reading is consistent with the Thai version, for it is the latter which will be used in settling a dispute. In any case, Thais prefer to settle things out of court (courts aren't always impartial), so make sure you have the upper hand.

The Thai property riddle

The property market in Thailand, and especially Chiang Mai, has some rather unorthodox characteristics which seem to defy all sense of economics and common sense. For sure, Thais see property as a wise investment and during the country's rapid growth over the last thirty years there has been a building boom that has changed the suburban face of the country. Activity has reached fever pitch as new buildings spring up everywhere; housing complexes, highrise apartments, hotels, restaurants, bar shacks, you name it; yet look all around you and you'll notice Chiang Mai has an awful lot of empty and abandoned properties, some of them on very good land and in great locations. In fact, you'll soon also notice there is little zoning here and hardly any distinction between good and bad areas. While some locations might be more expensive than others there is no such thing as the 'rich' suburb here. A huge mansion may sit beside a shack, a plush looking housing estate full of expensive mansions might have several empty overgrown plots scattered about, and a prime riverfront piece of land might have a ramshackle old house on it. It makes no sense; however, the housing market in Thailand (outside of Bangkok) only really began maturing some twenty years ago when laws were changed, granting full ownership of land to inhabitants and allowing free sale.

In the early nineties when Chiang Mai begun opening up to tourism, wealthy Bangkok and Hong Kong speculators moved in and snapped up lots of property hoping to make a quick fortune, but the locals couldn't afford the inflated rents and then the crash of '97 arrived. Housing consortiums went bankrupt, land fell into disuse and the banks cleaned up. However, there's more land than money here and people here don't like giving up anything to a buyers' market, so the prime land remains undeveloped and large luxury houses uninhabited, meanwhile new developers have moved further out, buying up large tracts of former rice field and turning them into 'the great Thai urban dream'. These remote 'densely packed villages' have become immensely popular among the new upwardly mobile class, while the 'old money' land nearer the city remains empty.