Thread: Buying another rice farm - drawbacks?

Originally Posted by BillyBobThai

I live in Phichit provience and my wifw tells me that land here rents for about
500 baht per rai a yaer. Sounds like somebody is trying to blow smoke up your ass. Before investing money, ask plenty of questions.

I'm truly surprised that no one has really questioned these figures. I'd be suspicious. Best he scout around the immediate region and compare...

Can anyone tell me the value of a Rice farm if I were to sell it? I have 27 Rai in Kong district, Korat about 140 k/m North of Nakon Ratchasima and about the same South of Kon Kaen, right next to a small village. It is situated at the end of a concrete road about 150 metres from the village. It is bordered by the main Klong. I was offered $20,000.00 USD but that seemed a little cheap as I paid nearly that much for it 10 years ago. It has a title which has been oficially surveyed by the government with surveyor marks. I think it is called a channote title. Excuse my ignorance but I have left most of this to my Thai wife. I asked the local bank but they said they could not help me. Can one get an official valuation of the properties' worth? Any help would be apreciated

Originally Posted by ozthai

Can anyone tell me the value of a Rice farm if I were to sell it? I have 27 Rai in Kong district, Korat about 140 k/m North of Nakon Ratchasima and about the same South of Kon Kaen, right next to a small village. It is situated at the end of a concrete road about 150 metres from the village. It is bordered by the main Klong. I was offered $20,000.00 USD but that seemed a little cheap as I paid nearly that much for it 10 years ago. It has a title which has been oficially surveyed by the government with surveyor marks. I think it is called a channote title. Excuse my ignorance but I have left most of this to my Thai wife. I asked the local bank but they said they could not help me. Can one get an official valuation of the properties' worth? Any help would be apreciated

Try the tax office or land office, they will charge transfer and land sale tax, stamp duty or what ever they call it. They will assest the value and tax it at their rate even if you sell for less. That is of course , if you paid the taxes in the first place. Thais hate tax and more often than not get the village head or sub district Governer to do a reciept for the sale. Then you own the land, but according to the land office the original owner is still on the title. That is if it really has charnote, Thais call any land with a piece of paper charnote. The little pegs only mean that the land has been surveyed. Jim

Originally Posted by ozthai

Can anyone tell me the value of a Rice farm if I were to sell it? I have 27 Rai in Kong district, Korat..

How long is a piece of string? Some great advice has already been given. The only other suggestion that I might add is to visit the area and inquire what other rice farms are bringing.

Good luck and please let us know what happens.

Originally Posted by MakingALife

What do you do with your rice land in the dry season?

Mostly watch it turn brown. Trying a bit of tobacco this year to see how it does. Will let you know if worth the effort.

Sorry for late reply. Missed your question.

Thanks for your help guys but i am not currently in Thailand so I cannot go to the land office. I have tried phone calls but that has only caused frustration. Has anyone else bought or sold a farm in that general area half way between Nakon Ratchasima and Kon Kaen?

Once again your best bet is to come to Thailand with your wife and ask around. Doing land deals concerning Thailand rice farms over the internet is risky at best. What I mean by this is that regardless of any official quote (which in reality there is none) prices can vary greatly.

Sorry, I realize that this is not what you wanted to hear, but in my experience this is the way to go.

Surely there are real estate agents who deal in this sort of thing. Look up rice and other farms for sale in Thailand on the net, take a few names and numbers of the agents offering and call them. Dont take advice from just one, take a few and suss it out from there.

Originally Posted by Norton

Originally Posted by MakingALife

What do you do with your rice land in the dry season?

Mostly watch it turn brown. Trying a bit of tobacco this year to see how it does. Will let you know if worth the effort.

Sorry for late reply. Missed your question.

Hey Norton, No problem about any late reply. I have been away from the board for a while, and have just checked in... After selling a big block of last seasons Jasmine (Homily) crop.

My posting (# 27) was all wet as far as yeild went. It was based on what every said the bags were holding when the rice was bagged up after processing the rice from the plant. My original yeild was 225 bags. (told they were 50 Kg bags). Selling off 140 bags the other day, after truck weights before and after the bags only held about 36 Kg. Thus my yeild for the fields was closer to 340 Kg / Rai.... Not the 560 Kg I has assumed, based on many folks involved in the processing to seperate the rice out, saying the bags were 50 Kg. Even the wife agreed they were 50 Kg bags...

At any rate. This changes that yeild from 11. 5 MTons to 8 metric tons. Its a shock to reset the actual crop recovery to that value, with 11.5 metric tons was the expected yeild.

About three weeks, before this sale happened..... We are embarking on a strategy change for some of our field crops. We are entering into a contract fish farm arrangement with a very large conglomerate food producer. We also sunk (2) deep wells on our farm in April 2011. And recently upgraded the size of our water storage pond, so we have the water resources in place to follow through on the (10) fish ponds going in.

The conglomerate is the technology partner as well, and provides all the training and mentoring, vet inspections, and program manager for this endeavor. My scheduling looks to be loading fish beginning in late August, spread out over ponds grouped in cycles, 3, 3, 2, and 2, staggered a week apart. This will spread out the harvests. We have people who will assist as needed and have bought in (3) Cambodia workers who we just got all the labor documents completed for.

I will let you know how this alternative works out, over time. How did your tobacco work out ??

The original poster was searching for feed back on rice cropping and determining land values. As I said before, Your numbers seemed to be good for Issan, now I am finding my yeild number matches yours as well.

I remain hopeful that the rice price, receives good supports moving forward in time, for the sake of many farmers in the game, and that Thailand doesnt end up in a price war with Vietnam or Cambodian production pricing on rice.

As far as land valuations for the OP. I think 10 to 12,000 Bhat is the typical pricing for rural unimproved land, if and when it can be found. Closer to larger cities, or on paved roads, and near water sources the pricing can really accelerate upward from those values. Our land was purchased from a land speculator who collected the pieces, in collecting debts owed against the land. He held the property for about a decade, and leased out the bottom land to folks who cropped rice there. Looking at the stack of old document that came with the land... He made back about 4 times his investment, because he bought the property at distressed pricing (taking it when debt wasnt paid). The guy was Thai Chinese and at one time was holding a lot of blocks in the small town. In 2007 he started rolling out of them, and we were lucky to have found the parcel we purchased (around 45 Rai, although the documents said 53, it was short on the walking survey of the boundaries done at property transfer. I have talked to folks who paid 3 x the raw land price we paid, and others (close to Korat) who paid 8 times the land price for a small 2 rai farm plot. As many in real estate say.. Price is based on location...

All the best.

Originally Posted by ricefarmer

y'all explain what 23 rai is to Arkansas rice farmer in acres. Enjoyed the thread, sounds like I need to buy land in Thailand.

.
---- a rai is 40% of an acre ----
.
and no you don't want to buy land in Thailand as an INVESTMENT. Like elsewhere in the world, the return on farmland is not good. Including Alabama.
.

Originally Posted by ozthai

Can anyone tell me the value of a Rice farm if I were to sell it? I have 27 Rai in Kong district, Korat about 140 k/m North of Nakon Ratchasima and about the same South of Kon Kaen, right next to a small village. It is situated at the end of a concrete road about 150 metres from the village. It is bordered by the main Klong. I was offered $20,000.00 USD but that seemed a little cheap as I paid nearly that much for it 10 years ago. It has a title which has been oficially surveyed by the government with surveyor marks. I think it is called a channote title. Excuse my ignorance but I have left most of this to my Thai wife. I asked the local bank but they said they could not help me. Can one get an official valuation of the properties' worth? Any help would be apreciated

.
---- 2 or 3 years ago I bought 25 rai of good rice land outside of dan khun todt for 800,000 baht. It was considered a good buy at the time.
.

Ricefarmer, if I am not mistaken, there are different grades of rice. I do not think the rice you are growing is the same they are growing in Thailand. Prices vary according to those grades from what my Thai lady tells me.If we have any southeast asia rice experts in the crowd, am I wrong or am I right?

Originally Posted by who

Originally Posted by ozthai

Can anyone tell me the value of a Rice farm if I were to sell it? I have 27 Rai in Kong district, Korat about 140 k/m North of Nakon Ratchasima and about the same South of Kon Kaen, right next to a small village. It is situated at the end of a concrete road about 150 metres from the village. It is bordered by the main Klong. I was offered $20,000.00 USD but that seemed a little cheap as I paid nearly that much for it 10 years ago. It has a title which has been oficially surveyed by the government with surveyor marks. I think it is called a channote title. Excuse my ignorance but I have left most of this to my Thai wife. I asked the local bank but they said they could not help me. Can one get an official valuation of the properties' worth? Any help would be apreciated

.
---- 2 or 3 years ago I bought 25 rai of good rice land outside of dan khun todt for 800,000 baht. It was considered a good buy at the time.
.

Pricing is a difficult call. I will interject that the parcel we purchased was supposed to be 53 Rai, but as we walked the property line with the mayor, the selling owner, and adjacent land owners, It appeared to be less. The correct size was around 43 or 44 Rai. We have now been waiting 1.5 years for the land office surveyors to survey the property. We could have obtained the updated property deed, if all adjacent owners appeared and signed off that the property lines (as shown on the old documents) were correct. But some owners live 300 Km away so our path to a the new style land document can only be done by completing a survey.

You have that already in hand, so your property is ahead of the curve by being surveyed and certified on record. To me the price of 20,000 seems cheap. We paid the USD equivalent of about 17,000 USD for our piece that 43 Rai piece which is .7 Km outside a small village. This land only had about 8 Rai of what I would call bottom land that was suitable for rice. The balance had too much slope to be feasible for rice. One portion was 15 to 18 meters higher and was a jungle...

My guess at valuation, being near a village and concrete road, and all usable as rice land (if that assumption is correct)... It would be capable of generating 150,000 to 200,000 in rice revenues before expenses, or close to 5,000 USD per year.
My guess is that the land should be worth 6 to 8 times its earning potential. This may seem expensive to some, but Thailand Ag land has very low carrying costs for taxation, or any other costs. So anyone who buys it, will recover their investment within a decade. My guess would be a fair value in the range of 1,200,000 to 1,600,000 Bhat. The difficulty is that this amount is a lot of money for anyone local to consider.

As an example the parcel we paid 17,000 USD, cost the former owner about 1/4 that price, but he owned it for about 10 years and loan sharked local people to took their land, when they could not pay. At one time he owned 50 parcels around this small hamlet, and it took him about 4 years to liquidate those holding. Almost all the buyers, had family who worked outside Thailand to have the cash ability to make those purchases.

So your challenge is to find a buyer with the green to sell it for a reasonable valued price, approaching double what your paid, or you price it at the offer provided and recover your investment. So your time line and overall comfort in waiting will drive your decision. My suggestion is to hold and sell for a fair value.

In my town, even small parcels with very traditional economy built homes, are out there with 1 M pricing, because locals tell themselves the land and village location will command this price. I dont really agree with that analysis. People with the financial ability to make a 1 M Bhat purchase are not going to flock to a small backwater village in Issan..

good luck and make the call that fits your needs best. Recycling your money invested as well is a good call, as 20 K can be harnesses for a lot of things in TL as well...

Nice thread this,

Having some cash saved up for the future, I am speculating using them on some land in Surin.

Fertilizer (800) and harvesting prices (500) mentioned earlier in this post seems to still be about right according to my mother in law, but she is saying they harvest bestween 700 and 1000 kg per rai (selling weight).

Does that seem right?

Originally Posted by mikeR

Nice thread this,

Having some cash saved up for the future, I am speculating using them on some land in Surin.

Fertilizer (800) and harvesting prices (500) mentioned earlier in this post seems to still be about right according to my mother in law, but she is saying they harvest bestween 700 and 1000 kg per rai (selling weight).

Does that seem right?

If you live here an idea, if not forget about it. You can't be an absentee farmer, not the way it works. Jim

[quote=Lobster;1124115]My wife's parents are not rice farmers, but they do own 12 rai of rice land which they rent out to the tune of a little over 100k a year.
======================
Most farming areas in Thailand would go for max 36,000 THB/year for 12 rai.
They must grow very special rice, for that kind of rent there is no profit to make with regular rice.

Originally Posted by jamescollister

Originally Posted by mikeR

Nice thread this,

Having some cash saved up for the future, I am speculating using them on some land in Surin.

Fertilizer (800) and harvesting prices (500) mentioned earlier in this post seems to still be about right according to my mother in law, but she is saying they harvest bestween 700 and 1000 kg per rai (selling weight).

Does that seem right?

If you live here an idea, if not forget about it. You can't be an absentee farmer, not the way it works. Jim

555 ..guess it's the Walter Mitty in all of us, still I guess if nobody ever did seemingly stupid,irrational stuff be a bit of a dull world.
Seems as if farming is the same category as buy a beach bar et al .... ie loads of money coming in, pour a few drinks, free beer, loads of women,living in paradise & voila heaven on earth.
Ex dabbled in restaurants,bars and retail stores heavily subsidised by my career. Now I've somehow become a euphemistic rubber farmer by default...okay it has and continues to pay for itself..pretty nice life style although a bit boring at times....not sure would have done it if I had gone into a an analysis paralysis mode. In hindsight would/should have I done it? Will never know.......

Originally Posted by crepitas

Originally Posted by jamescollister

Originally Posted by mikeR

Nice thread this,

Having some cash saved up for the future, I am speculating using them on some land in Surin.

Fertilizer (800) and harvesting prices (500) mentioned earlier in this post seems to still be about right according to my mother in law, but she is saying they harvest bestween 700 and 1000 kg per rai (selling weight).

Does that seem right?

If you live here an idea, if not forget about it. You can't be an absentee farmer, not the way it works. Jim

555 ..guess it's the Walter Mitty in all of us, still I guess if nobody ever did seemingly stupid,irrational stuff be a bit of a dull world.
Seems as if farming is the same category as buy a beach bar et al .... ie loads of money coming in, pour a few drinks, free beer, loads of women,living in paradise & voila heaven on earth.
Ex dabbled in restaurants,bars and retail stores heavily subsidised by my career. Now I've somehow become a euphemistic rubber farmer by default...okay it has and continues to pay for itself..pretty nice life style although a bit boring at times....not sure would have done it if I had gone into a an analysis paralysis mode. In hindsight would/should have I done it? Will never know.......

Nothing ventured nothing gained, I live on rubber money, nothing else. I took the chance, but it's an all or nothing game farming. If you just want to play absentee farmer, buy shares in a farming company. Jim

First of all I just want to look at the numbers, and I was abit puzzled that this thread mentioned significantly lower outcome than my family-in-law supposedly has. I wonder if there are some misunderstandings here.

Originally Posted by mikeR

First of all I just want to look at the numbers, and I was abit puzzled that this thread mentioned significantly lower outcome than my family-in-law supposedly has. I wonder if there are some misunderstandings here.

Don't think you will find any Thai farm or small business that is not making money, according to the owners. Same same farang bars etc all money winners.
Ask to see the sales dockets for the last few crops and do the numbers from there.
Very few rich small time rice farmers, your money and up to you if you want to play .Jim

OK my numbers on average over the last four years of rice growing. 13 Rai each year. Net of all costs 65 to 79,000 baht retained currency. Fact!

Originally Posted by IsaanAussie

OK my numbers on average over the last four years of rice growing. 13 Rai each year. Net of all costs 65 to 79,000 baht retained currency. Fact!

And you are not only the best farmer I know, but as honest as you can get.
Doing things out here are harder than most think. It takes a lot off dedication and sometimes hard work. Not for must, better to buy shares.

Will try and give you a call tomorrow AI . Jim

Net of all costs 65 to 79,000

Two crops?