Buying an apartment in Taiwan

Thank you stragbasher.

As I said, I bought a dirt-cheap fixer-upper. I had read piles of those stupid get-rich-quick-through-real-estate books, that tell how easy it is to buy a house that’s underpriced due to death, divorce or just desperation, to fix it up and turn it around for a quick profit, or rent it out for a few years, refinance it and use that to buy another, etc., etc.

While those strategies might work sometimes, those books for the most part are full of shit. Buying a house involves a lot of time, money, uncertainty and often hidden costs. One might turn it around for a quick profit or one might get stuck with headaches and a loss.

My house sounded great: 6 bed, 2 bath, 2 car garage, 2300 sq ft foreclosure property for less than $100,000. I worked my butt off on that house, lived in it for longer than I wanted to, rented out rooms, tried desperately to sell it, eventually had to sell it carrying the papers because no one wanted to buy the lousy place, got screwed when the buyers quit making payments, got tied up in a lawsuit with the bastards, and lost money on the terrible thing. It wasn’t a total loss, though, because I gained precious first-hand knowledge.

If one is certain one will live in it for at least a half dozen years chances are pretty good that purchasing a house will be a worthwhile investment, if one does ones homework in advance. If one believes all the get rich quick nonsense and hopes for a quick profit one will most likely be disappointed. That’s why I say to make sure you buy a house you will be happy living in for 10 years, because you might be stuck doing that even if it wasn’t your plan.

What if…Just what if?
It could go either way.
It could happen in Taiwan.
It could happen in America. (Not the Reunifcation issue)

Prices can go either way. In the end according to your scennario you owe 8 million on a 10 million dollar house. At least you will walk out with 2 million dollars. Not a great scenario however, it’s slightly more than not getting back 60000 from a security deposit. Actually thats a shit case. It would truly suck. However that is a worst case. Not a best case.

People can buy a house for many reasons. If I had a house back home or needed one then I probably would have opted to rent but for a fist timer and very little possibilty of leaving Taiwan in the next 5-10 years it was a good choice.

In the end as most people I hope that the market improves. Prices go up and I can sell in 10 years for a few million more than I paid. Best case scenario. Worst case…China invades and we run back home. Chances are … prices will rise. Remember prices are moving up in the Taipei area. 20-30% last year around here. (Neihu).

Ski

Houses are also a good hedge against inflation. Last year, I was concerned about deflation in the U.S.; this year, with oil and steel prices skyrocketing, I almost wish I’d held on to the dump. Of course, if I had, I would have had to deal with being an absentee landlord. . . . Oh well.

But still, I would be very careful when buying anything here in Taiwan. Not only is it uncertain what will happen to the house prices, whether a mainland misile attack will reduce your investment to rubble etc, but you also have another problem to contend with: shoddy construction, which is something you need to factor in as well before investing into the house.

For instance up here on the hill, most houses are build using at least a bit of sesand. Those houses will not remain standing a lifetime, and I give my house at the very most another 10 years before it’s unsafe to live in. Things might be better than they were in the 1980’s, but a house you buy because you want to live in it for say 30 years, might not last that long without major renovation. Compare that to my parents house, who were moderately renovated in the 1970’s and where all bathrooms are from the 1930’s and remain in good condition. Here, you will have leaks after 10 years at most because a tarpaper humidity barrier isn’t used.

If you buy a flat, the quality of the building is basically in the hands of the guy owning the top floor flats, as the roof is his. If he allows it to leak, too bad. I live in a 3 storey townhouse, and well, the guy maintaining his house the least decides when the whole block is ripe for demolision.

A free-standing house, which you can tear down & start over after 10 years is the best solution, but unless you live in the sticks somewhere, then it will be somewhat expensive to buy.

You all have your opinions and make valid points.

As for Mother Theresa and Stragbasher, real-estate speculation, much like stock or any other kind of speculation, involves a great deal of risk not only in Taiwan, but anywhere in the world. I would tend to agree with ski, that the decision to buy should, first and foremost, be grounded on how long you intend to stay here. I wouldn’t suggest speculation unless you have a lot of money to play with and can afford to take a big risk. :wink:

One comment for Mr. He: Obviously we’ve all heard the horror stories about shoddy construction and buildings sliding down the hills during typhoon season. Of course, these are important considerations. But one thing that I found out when we insured our place is that the actual building and the materials used to make it only constitute a fraction of the price of the house (less than 30%, if memory serves). The rest of the value is the actual land that you own, however big or small. With this in mind, one would gather, as I think Mr. He mentioned earlier, that buying a unit in a 3-5 storey building nets you a bigger share of the actual land that the building sits on than if you bought into a 10-12 storey building. The downside to these 3-5 storey places, of course, is that they’re all 15-20 years old and you will innevitably end up putting a lot of money into renovations just to make them livable. :s

Just some facts that I found when doing my research when my wife and I bought. :slight_smile:

Cheers,
CK

They still build new 3-4 story places down here, and in the outskirts of Taipei, I think.

The land is important, but getting a place rebuilt may run up to NT$40K per ping. I would just buy teh land and then have a house built to my specs. However, we would be looking at at least NT$12m before I had a livable place in a location I like.

How come no one’s mentioned anything about earthquakes? Purchasing a house in an area prone to earthquakes would make me think twice about the whole thing. Or have you all taken out an earthquake insurance on your property?

[quote=“Mr He”]They still build new 3-4 story places down here, and in the outskirts of Taipei, I think.

The land is important, but getting a place rebuilt may run up to NT$40K per ping. I would just buy teh land and then have a house built to my specs. However, we would be looking at at least NT$12m before I had a livable place in a location I like.[/quote]

Are you familiar with process/procedures to lay water and sewer pipes, connent to electrical power and phone lines etc. I have no idea how feasible this is if you find a piece of land that is for sale, and you want to build your dreamhouse.

Input for those practical details, anyone?

[quote=“X3M”][quote=“Mr He”]They still build new 3-4 story places down here, and in the outskirts of Taipei, I think.

The land is important, but getting a place rebuilt may run up to NT$40K per ping. I would just buy teh land and then have a house built to my specs. However, we would be looking at at least NT$12m before I had a livable place in a location I like.[/quote]

Are you familiar with process/procedures to lay water and sewer pipes, connent to electrical power and phone lines etc. I have no idea how feasible this is if you find a piece of land that is for sale, and you want to build your dreamhouse.

Input for those practical details, anyone?[/quote]

There are very few contractors in taiwan that will not try to rip you off. This is a fact. Several relatives have experience turning worthless run-down stand-alone houses into tall 8-10 story apt buildings. Its a long process requiring permits, hongbao, personal supervision of all work, and more hongbao, and more permits. Example: each time cement is poured, u need to take samples for ‘independent testing’(this never made sense, since ur testing the cement AFTER its poured…not like u can say, ‘i didn’t think that last batch was quite up to snuff, please re-do it’)

Then there is the ‘certification’ process in which fantasticly flexible gov’t inspectors check your new building to see if actual construction adheres to original design specifications. Hongbao and more hongbao. Maybe take the inspectors out to dinner, or take the whole Building Certification team out to dinner/hongbao. Often times buildings are not built ‘exactly’ as planned…due to poor surveying/marking/foundation-built-incorrectly, lazy ‘cha-bu-duo’ work ethic, and cutting corners. If u can’t get past certification, u cannot legally apply for electricity, gas, water. Then ur building gets to sit there. Useless. Uninhabitable.

If u plan to build ur own house/apt/townhouse…be prepared to accept either a LONG frustrating process…or completely shitty construction quality. U need to supervise EVERY movement on the construction site.

While u might be able to find a nice apt with quality construction, i guarantee that nearly every ‘repairman’ that comes to perform service(adding telephone lines, repairing leaks, changing gas lines etc) will cost quite a bit of money, and they will very likely try to cut corners. If u do not have a moderate understanding of basic plumbing/electrical work, prepare to get fleeced and cheated each time that betalnut gnawing man walks through your door. Even if u do understand what they are doing, and ask them to do things ‘your way’(ie. properly)…prepare to get a lot of attitude and a ‘why the F aren’t u doing this work urself, seeing as u know SO much’-response from the repairman.

end of rant.

goodluck!

-chris

This is certainly our experience in so far as we are only renovating the floor and removing a wall.

We have made lots of mistakes, including firing the original contractor whose work was cheap and didn’t satisfy my wife’s original specs.

Yes, supervise, supervise, and supervise the workmanship as quality control is minimal from the workmen.

Kenneth

Munga and Ken,
Thanks a lot for the heads up. Troublesome, as expected, and then even more scaring.
Guess it is back to looking at already build, move straight in, places.

I know that it’s tough, but I do know foreigners with extensive experience building stuff here. They know the processes asn should be able to pull thru.

However, up here where I live, a decent plot runs at some NT$60k+ per ping, and I would need at least 200 pings for the yard alone befoer bothering. The only good news are that it’s all zoned for residential use up here.

Great discussion here. :slight_smile: We’ve decided to rent for another 6 months or so, and have a couple of agents showing us places.

I recently saw a friend’s house in the mountains (Danshui, I think–anyway, waaayyyyy out there). Beautiful house… three stories, beautiful western kitchen, awesome bathrooms (bathrooms and kitchen are very important to me), HUGE.

Sigh.

Anyway, she happened to mention that the walls are made of brick and then there’s an outer layer of cement (not sure how thick). Then the roof (maybe all three levels?) are made of reinforced concrete. I’m curious whether most small buildings here are made this way, and how well do they hold up?

Where I’m from, most if not all the walls, even of single family homes, are made of hollow concrete blocks, with rebar from ground to ceiling, and concrete poured to fill the hollow block. Not very pretty but definitely sturdy. Since we get typhoons here often, I assumed walls were built the same way.

I have seen construction in progress here, and that leads me to the conclusion that houses here are built like crap.

Seriously, they will usually make the skeleton using RC, and then they build brich walls which they cover with concrete. I would wonder a bit about how earthquake proof that would be? The big thing it has going for it is that it’s cheap.

What you might want to do if you can get the expertise needed, is to build using steel frame, as that will work better during quakes. If done properly with isolation and the right materials, they will be better isolated, and more soundproof as well.

We bought a house here last June/July. We started looking because there were some tensions between my mother-in-law who lives with us and my sister-in-law who owns the house we were staying in before. It turns out that with all the SARS stuff going on, the market was fairly depressed. Unfortunately, the market still was not ideal. Agents were still listing houses at only slight discounts, and the foreclosure/quick sale places often were not very attractive for one reason or another, and often you couldn’t actually take a look inside.

My wife was quite anxious to take advantage of a bargain and kept dragging me off to all parts of Taipei city/county only to look at the outside of some building. We finally found one that we all agreed was good except for one thing: 5th-6th floor, no elevator. Still, everything else was good. Location is behind Landis Hotel, just down from my wife’s beauty shop, and right on the Xinzhuang MRT line being built, several very popular bus lines running through the neighborhood, on a nice wide lane that is relatively sedate by Taipei standards. Plenty of room (52 ping) for everyone to live comfortably even with guests over. Great price, and we found the owner direct so only had to pay a broker a relatively modest fee to handle the sale. Was in fairly good condition, so the remodeling needs were fairly modest. Three decent grocery stores nearby (PXMart, Wellcome, Sungching). Small park at the end of the lane behind the Landis. And right around the corner from the old place, so we were already familiar with the neighborhood.

As MT has emphasized, location is very important. It is important because when you want to sell it, this will be what everyone else is looking for. You don’t need to only look in trendy neighborhoods, but your house should be located near the necessary conveniences. You also need to keep in mind the quality of the building and what your neighbors are like. While Taiwanese in general aren’t very concerned about the appearances, there’s still a wide range of practices. You’ll have some places which are relatively tidy with at worst scooters crammed in the entryway and some shoes in the stairwells all the way to the other extreme of the common areas being barely passable, and the entryway blocked by a chou doufu or betel nut stand. Bottom line, you should be comfortable with the way your building looks and the way the neighbors keep up their part.

Also remember to budget something for remodeling. Most places will come stripped to the bare walls, so unless you have very low requirements, you’ll probably need to do some amount of remodeling. Sometimes you’ll need to do a lot. Be sure to budget this in beforehand.

Some of you have mentioned that you want to buy a standalone 3 story so you own the land. Actually in a lot of multi-unit buildings, you do own a portion of the land. This could be pro-rata, or sometimes different owners own different amounts of the land. The registration for the house should state how much of the land comes with the house. Sometimes only one of the residents actually owns any land, but not always.

Wow, I totally missed this topic. [url=http://tw.forumosa.com/t/buying-property/1451/12 here I was typing away over in the Real Estate forum[/url]

Why IS there a real estate forum if we are all discussing real estate over here :frowning:

There’s a real estate forum? Someone should tell the moderator so he can move this thread!

I guess this one was started here by someone who had heard the old adage about your home being the biggest investment that most of us make. Maybe a merge is in order.

I have a complication here. My American friend has been living and working in Taipei for 10 years and not yet allpied for the permanent residency or citizenship. He bought a house last year under my name, and I made a loan of a few million from the bank, cause he is not allowed to do either, according to the broker. The question is:

  1. Can I transfer the house and the loan to him?
  2. Any tax or cost in doing so? How much?
  3. Can he be tax-exempted then?

I guess I should go directly to the tax bureau but not sure if they can even handle this kind of issue. Would really appreciate if someone can help. Thanks.[/b]

Those who’ve purchased property here, did you hire a property inspector to look over your place before you sign your name and close the deal? I know in the US this is de rigueur, but is there such a mechanism here in Taiwan? How do you make sure your building is not shoddily constructed or seriously damaged internally by the 921 earthquake?

Just a little tidbit. A friend is looking for housing in Neihu and went to the real estate agents. She noticed that not a lot of owners are selling their place but letting the RE companies deal with it. So far it seems like the RE companies are using a tactic like “Oh look! No one is selling their houses on the street. See? NO red for sale signs.” Infact if you go to another RE company they will say the same thing but will lead you to the same area the other real estate company said there were no places in that street/area for sale. I think they might have a collusion thing going on between the RE companies.

Also, the RE companies will take the place they want to sell and fix it up and take a big markup on it.