Best way to appraise rice paddy price?

Stargazer

Stargazer

Surin Legend
My wife is trying to get me to buy some of her brother's rice paddy land for her so he has money to build a house. I don't regard this kind of land in Isaan as a good business investment, given the meager return on rice growing. However, I can afford it and am willing to help, as long as I'm not paying an inflated farang price. The idea is for the land to eventually go to her grandson.

Any suggests about how to get a meaningful appraisal of the property? I know that location matters (land near an irrigation canal, major road (house site possibility), electricity, water, etc. affect value). Otherwise, the prices I hear seem a bit absurd (but so do all land prices in the USA :D). Most land prices these days seem to follow the 'greater fool' idea: it doesn't matter what you pay as longer as there is a greater fool willing to pay more later.

One idea would be to ask a bank how much they would loan on the land. Presumably they only lend a fraction of the value to protect themselves. So 2x the loan offer might be about right.
 
If the land has a Thailand Land title deeds are the documents issued by the Thai government departments, it generally shows a person's rights to land (ownership if it is a Chanote title deed) and registered encumbrances such as mortgages, leases, etc. on a property. A bank will loan on it. But as CO-CO said don't do it.
 
I was a real estate appraiser for a decade both in the US and in Canada. I was licensed in Hawaii and held a designation from the Appraisal Institute of Canada.

Thailand would be a nightmare to appraise in. Without an MLS system accurate and recent sales information will be difficult to obtain. Many if not most sales are private, the buyer and seller meet through word of mouth.

An appraisal if done correctly also looks at what is available on the market. The thought is why would a buyer pay a higher price than the asking price of a similar property.

Competitive listings will give the maximum value a property is worth. I would have inquiries made to find any rice fields that are currently offered for sale in your area. Then adjust the asking price per Rai for the quality of soil, availability of water and of course location.

A small rice field located along a paved road between two villages is worth more ( per Rai) than a larger field that is 5 plots of the road because it's real "Highest and Best Use" is a residential lot. A rice field located adjacent to an intersection of two paved roads HBU is likely a commercial use, perhaps a "Cheap and Good" shop, the franchise that is now providing a 7/11 style selection and automated inventory control.

The next issue would be who to use to make the enquires. You can not, your wife is mia farang and thus viewed as obscenely rich regardless of her circumstances.

Fair market value is determined by the sale prices of real property publicly listed and agreed on by a knowledgeable buyer and seller without duress.

I have yet to meet a knowledgeable seller or buyer in Thailand and in my community the only time a rice field is sold is when the payments to the illegal money lenders are in arrears.

I asked a friend who is manager of the main branch of Bangkok Bank here in Sisaket how appraisals are done. His reply was how much money do you need and are you credit worthy? Neither of which should influence the value of a property. New homes are sold furnished, those furnishings are chattels that can and will be removed from the property in foreclosure and yet mortgages of 100% or greater of the asking price are available from regulated financial institutions if you are credit worthy.

Absolute insanity in my opinion.
 
Thailand is in 11th place for highest consumer debt to income ratio, the ten in front are all advanced western economies.

Interest rates will rise and there will be a bloodbath. Rice farming on small plots by independent farmers is agriculture done they way turn of the farmer in 1900 in the west. No economy of scale. When the manure hits the fan CP will gobble up vast farmland at depressed prices made possible by predatory lending, a government that could give a flying F about the rural vote and an elite that considers the rural population as theirs to exploit.

I contribute to seed and fertilizer costs for my inlaw's rice crops that invariably are more expensive to grow than to purchase the finished product.

However I am reminded that mother's rice is the best in the world. But then so allegedly is her larb gop and I still won't eat chopped up frog
 
Mel Malinowski said:
My wife is trying to get me to buy some of her brother's rice paddy land for her so he has money to build a house. I don't regard this kind of land in Isaan as a good business investment, given the meager return on rice growing. However, I can afford it and am willing to help, as long as I'm not paying an inflated farang price. The idea is for the land to eventually go to her grandson.
Click to expand...

Mel, what age is the brother ?
How much money is required to 'build a house' ?
What is his occupation ?
Is he your friend ?
 
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Mel Malinowski said:
My wife is trying to get me to buy some of her brother's rice paddy land for her so he has money to build a house. I don't regard this kind of land in Isaan as a good business investment, given the meager return on rice growing. However, I can afford it and am willing to help, as long as I'm not paying an inflated farang price. The idea is for the land to eventually go to her grandson.

Any suggests about how to get a meaningful appraisal of the property? I know that location matters (land near an irrigation canal, major road (house site possibility), electricity, water, etc. affect value). Otherwise, the prices I hear seem a bit absurd (but so do all land prices in the USA :D). Most land prices these days seem to follow the 'greater fool' idea: it doesn't matter what you pay as longer as there is a greater fool willing to pay more later.

One idea would be to ask a bank how much they would loan on the land. Presumably they only lend a fraction of the value to protect themselves. So 2x the loan offer might be about right.
Click to expand...
You have already answered your question.

"However, I can afford it and am willing to help, as long as I'm not paying an inflated farang price."

You will nearly always pay an inflated farang price. Even if just marginally so.

Why has brother not rented his rice farm land (or previously put that piece of land up for sale to others) and over the years and saved the money from the sales of the rice gained from the rental to 'build a house'? Has the property been offered for sale to anyone else but you/your wife? How much is being asked for this land bought by you? What will be done with the land once you have bought it, besides it being for her grandson at a future date? Is this good rice growing land, or just a piece of the lesser 'good land' for growing?

The prices are absurd, especially if it is not easily accessible and 'on the road', having water access and having good arable land for growing.

You are seen by wife and family as a good man willing to help your wife, and her family. You are seen as rich enough to do so with no injury to your disposable income. Will you gain anything besides keeping your wife happy and making it so 'brother' can finally build a decent home for himself? Do you see him as a hard working man doing what he can to support his own family if you were not there as the 'farang bank loan officer'?

Just putting out some questions. As they say 'up to you'.
 
Mel Malinowski said:
My wife is trying to get me to buy some of her brother's rice paddy land for her so he has money to build a house. I don't regard this kind of land in Isaan as a good business investment, given the meager return on rice growing. However, I can afford it and am willing to help, as long as I'm not paying an inflated farang price. The idea is for the land to eventually go to her grandson.

Any suggests about how to get a meaningful appraisal of the property? I know that location matters (land near an irrigation canal, major road (house site possibility), electricity, water, etc. affect value). Otherwise, the prices I hear seem a bit absurd (but so do all land prices in the USA :D). Most land prices these days seem to follow the 'greater fool' idea: it doesn't matter what you pay as longer as there is a greater fool willing to pay more later.

One idea would be to ask a bank how much they would loan on the land. Presumably they only lend a fraction of the value to protect themselves. So 2x the loan offer might be about right.
Click to expand...
Check out this thread: https://aseannow.com/topic/1259879-land-prices-in-isaan/.

It may help you approximate the value of your brother-in-law's land.
 
I've no idea why anyone, especially a farang, would want to buy rice land here. The ROI is absurdly low for the money and time invested. Land speculation maybe for sale when prices increase? Subsistence farming for the family maybe? As one member points out he pays for the seeds and fertilizer. Besides labor that IS the total investment needed to grow the rice. What's the point besides helping the family have rice to eat? Which, if they got jobs and worked for money, they could usually afford by buying from the local rice farmers in the village for much cheaper to eat. A family plot for self sufficiency is one thing, but for the amount of work and investment needed does not seem to be a viable 'business' model or means of improving one's lot in life.
 
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