The Low, Low Cost Of Living In Chiang Mai

The Low, Low Cost Of Living In Chiang Mai

“Consider settling down in Chiang Mai, Thailand,” writes intrepid Correspondent Paul Terhorst, “where a retired couple could live for as little as US$1,055 per month if you rent…or for as little as US$765 per month if you own your own apartment or condo.

“We know a single man, an American, who lives on US$200 a month, with half that going for rent. He gets around on a bicycle and eats at noodle stalls…or free when a temple offers lunch. He makes a sport of spending as little as possible.

“We know a Thai American woman who bought an apartment in a small town 15 kilometers from Chiang Mai. She manages on US$600 a month Social Security and, as she is Thai and over 60, enjoys free government health care.

“Those are special cases. Exceptions. You should start with a bigger budget, along the lines of what I detail below.

“House and apartment rent can vary a great deal. We know a couple that rents a place in the countryside 12 kilometers from old town Chiang Mai. They pay US$135 a month for a small home and garden.

“You will certainly pay more for a bigger, newer place in town.

“Foreigners can own an apartment or a condo in Thailand (though, unless you go through hoops, not real property).

“Still, owning is an option, so below I outline a second budget, assuming the purchase of an apartment or condo.

“Note that costs skyrocket if you want to live in Bangkok. Figure that, in the capital, you’ll pay double for rent, transportation, eating out, and entertainment.

“In Chiang Mai, however, here’s how your monthly cost of living will break down:

“If you rent:

  • Rent: US$400 (though, again, this can vary greatly)
  • HOA Fees: US$0
  • Property Taxes: US$0
  • Transportation: US$100 (it costs 60 cents to ride the local bus; average taxi ride is US$2.50)
  • Gas: US$0
  • Electricity: US$50 (depending on air-con use)
  • Telephone: US$15 (for a cell phone, depending on use)
  • Internet: US$40
  • Cable TV: US$50 (including English-language movies)
  • Household Help, part-time: US$50 (once or twice a week)
  • Food: US$100
  • Entertainment: US$250 (including meals out)
  • Homeowner’s Insurance: US$0

“That totals US$1,055 per month.

“If you own:

  • Rent: US$0
  • HOA Fees: US$75
  • Property Taxes: US$0
  • Transportation: US$100
  • Gas: US$0
  • Electricity: US$50
  • Telephone: US$15
  • Internet: US$40
  • Cable TV: US$50
  • Household Help, part-time: US$50
  • Food: US$100
  • Entertainment: US$250
  • Homeowner’s Insurance: US$35

“That totals US$765 per month.

“Thailand is one place where it can be affordable to keep a car. Here’s how the monthly costs would break down:

  • Car Registration: US$20
  • Insurance: US$20
  • Maintenance: US$40
  • Fuel: US$100

“For a total cost of US$180…only US$80 a month more a month than I’d budget for using local transportation if you choose not to invest in a car.”

Kathleen Peddicord


“I don’t think I told you yet,” writes a friend who’s been living in Uruguay, “that we bought a house in Brazil. It’s about an hour north of Recife, on a large island. Right on the beach. It’s 189 square meters plus the terraces and garage. It’s an older house, built in 1987. But it will be fun to use during the Uruguayan winter.

“I just HAD to escape those 58-degree temperatures… (See how spoiled we get?)

“We couldn’t afford it in September, but the owner came down in price, and the value of the real dropped more than 30%. Between the two, I think we’ll pay US$60K to US$63K, depending on the exchange rate when I send the payment.”


“Kathleen, I am currently retired and living in Spain, where our combined retirement purchasing power has fallen by 30% to 40% since moving here two years ago due to the relentless fall of the British pound against the euro.

“Spain is no longer the cheap option, but neither do I wish to return to the UK for a number of reasons, including the climate and the state of the economy!

“For these reasons, I am considering Panama as the ideal solution to my dilemma.

“However, before considering selling up and moving out, I would appreciate your advice on the additional expenses involved in a house purchase in Panama over and above the advertised selling price.

“In Spain, you are looking at at least 10% to 12% extra to cover legal fees, IVA (value-added tax), and other mandatory charges.

“For example, for a US$500,000 house, what would be the additional costs?

“Also, would it be possible for you to repeat this exercise for other countries you recommend?”

— Alan K., Spain

Our resident global real estate investing expert Lief Simon replies:

“In Panama, the closing costs for the buyer are nominal. The seller pays the 2% transfer tax, not the buyer. Therefore, the buyer’s closing costs amount to legal fees and registration fees.

“Legal fees should run around 1%, and registration fees are nominal. As the buyer, you should incur no other costs…making Panama one of the most cost-efficient places in the world to buy real estate.

“You make a good suggestion, regarding the idea of our producing a report that details transaction costs for all the countries we recommend. I’ll speak with our publisher and see what we can work out.

“Meantime, a good source for this kind of information is the Global Property Guide, which publishes transaction costs for many countries worldwide. The trouble is, the information here isn’t consistent, and, frankly, it isn’t always correct.

“For example, Global Property Guide has the only cost to the buyer in Panama as the legal fees, which the site puts at 2%. Find another attorney if the one you’re speaking with tries to charge you more than 1% (with the exception perhaps of a very small transaction, in which case the percentage could be higher; by the same token, if you’re making a very big buy, of, say, US$1 million or more, you should negotiate a lesser percentage).

“You’re wise to consider total transaction costs as you shop for a new place to buy. Depending on the country, these can vary from as little as 1% to as much as 10% or more, as you suggest. “Generally speaking, you’ll pay more for the privilege of acquiring a piece of real estate in Europe than you will anywhere else in the world.”

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