🔍 The Myth Everyone Believes

The Myth: "30-year leasehold is terrible, so if I get a 90-year lease, I'm basically getting freehold ownership!"

The Reality: Not even close. A 90-year "lease" is usually a 30-year lease with two 30-year "renewal options." Sounds the same? It's absolutely not. Those renewals aren't automatic, they're not guaranteed, and they can be expensive. Worse, they're only as good as the original lessor—if they go bankrupt or sell, your "guarantee" vanishes like morning mist. 🌫️

We've seen cases where buyers paid premium prices thinking they had 90 secure years, only to discover at year 29 that exercising the renewal costs another 30% of current market value. Or that the developer went under and nobody knows who actually owns the land. Fun times! 😅

✅ Who Leasehold Actually Works For

Here's the thing—leasehold ISN'T automatically bad. It works brilliantly for:

• STR Investors: You're planning to cashflow for 10-15 years then exit? Leasehold gives you 50-70% lower entry price. Do the math—your ROI might actually beat freehold. 🎯
• Retirement Home Seekers: You're 60 and buying a place in Hua Hin for your golden years? A 30-year lease gets you through your entire retirement at fraction of freehold cost. Pragmatic choice. 🌅
• STR Operators: Prime beachfront leasehold villa generating 8% net yield? You'll break even in 12-15 years and the rest is profit. Freehold would take 20+ years to break even. 💰
• Nomadic Lifestyle Types: Not tied to one location long-term? Leasehold's flexibility and lower commitment make sense. No generational wealth plans required. ✈️

❌ When Leasehold Is a Terrible Idea

Leasehold is a disaster if you're:

• Planning to pass property to kids: That 30-year lease will be basically worthless by the time they inherit. Not the legacy you wanted. 👨‍👩‍👧‍👦
• Buying for pure capital appreciation: Leasehold depreciates as time passes. The opposite of appreciation. Math doesn't work. 📉
• Getting a "company ownership" structure: This is the sketchy workaround where you "own" a Thai company that owns the land. It's technically illegal, barely enforced currently, but could blow up anytime. Sleep-at-night test: failed. 😰
• Dealing with unclear lease terms: If the lease contract is vague about renewals, costs, or transferability—run. Actually, sprint. 🏃

The Smart Move:Read our full breakdown before signing ANYTHING. We cover the legal structures, the common traps, the questions to ask your lawyer, and the specific scenarios where each option makes sense. This is your money—make sure you understand exactly what you're buying. 📋

Need Someone to Sanity-Check Your Deal?Send us the project details and we'll tell you straight if the structure makes sense or if you should walk away. No sales pitch, just honest advice from people who've seen it all. 🛡️

💡 Why This Matters (Even If You're Not Looking at Manila)

Manila's surge signals something bigger: the Philippines' middle class is finally hitting critical mass. The BPO sector employed 1.7 million people in 2025, earning salaries that make ₱50,000-150,000/month normal. That's condo-buying money. 💼

The rental market is equally hot—2-bedroom BGC condos are leasing at ₱90,000-130,000/month, translating to 5-6% gross yields. Not Phuket numbers, but for a city market with this much appreciation potential? That's the sweet spot. 🎯

The Play: If you've been sleeping on Manila, wake up. Projects launching in Q2-Q3 2026 are your window before prices reset even higher. Look at areas adjacent to BGC—Makati's southern fringe, parts of Taguig near the Metro Manila Subway route—where you're getting BGC proximity at 30-40% discount. Want specific project recommendations? Our Manila team tracks every new launch. 📍

⚠️ Before You Rush Into Bali...

Hold your horses. While this is legitimately exciting news, remember:

• Regulations aren't final yet. Indonesian policy has a habit of being announced, then amended, then postponed, then changed again. Don't put down deposits until you see actual registered properties under the new system. 📋
• The "designated zones" list isn't published. Your dream villa in Seminyak might not qualify. Or it might. Nobody knows yet. 🤷
• Existing leasehold properties don't automatically convert. If you bought under the old system, you're probably stuck there unless you negotiate a conversion (which won't be free). 💸
• Due diligence is mandatory. Indonesia's land title system is... let's say "interesting." Even with new rules, hire a reputable lawyer. Actually, hire two lawyers. 👔

Our Take: This is a positive signal for Indonesia's long-term property market, but it's early days. Wait for the actual implementation, watch for the first transactions to complete under the new rules, then consider moving. Being a pioneer in Indonesian property law is not a badge of honor—it's expensive. 😅

📊 What the Data Means for Your Rental Strategy

Phuket & Islands: Occupancy rates hitting 82-88% in January (typically a strong month anyway), but ADRs are up 12-15% year-over-year. That's the sweet combo—more guests AND higher prices. If you're not capitalizing on this, check your marketing and pricing strategy. 🏖️

Bangkok: City hotels at 75-78% occupancy, but serviced apartments and STRs doing even better at 80-85%. Why? Families and longer-stay tourists prefer apartment-style accommodation. This is your market—lean into it. 🏙️

Chiang Mai: The dark horse. Occupancy at 70-75% even in shoulder season, with digital nomads booking 2-4 week stays. They're paying ฿35,000-55,000/month for quality 1-2 bedroom places. Do the math—that's better annualized return than beach properties with seasonal volatility. 💻

Opportunity Alert: Secondary cities (Krabi, Hua Hin, Koh Samui) are seeing the fastest growth in search volume according to Airbnb data. Everyone's competing in Phuket and Bangkok while these markets have better yield opportunities and less inventory. Interested in exploring secondary markets? We've got local partners who know which projects actually work for STR. 🎯

💰 What Is Cash-on-Cash Return?

Simple Definition: Your annual pre-tax cash flow divided by the total cash you invested (down payment + closing costs + any renovation). It tells you: "For every dollar I put in, how many dollars am I getting back each year?"

Formula: (Annual Net Cash Flow ÷ Total Cash Invested) × 100

Why It's Better Than Simple Yield: Because it accounts for leverage! If you buy with a mortgage, your cash-on-cash return is way different than your property yield. Let me show you...

🧮 The Example That Makes It Click

Scenario: ฿5 million Bangkok condo, rents for ฿20,000/month

Option A - All Cash Purchase:

• Purchase: ฿5,000,000
• Closing costs: ฿100,000
• Total cash invested: ฿5,100,000
• Annual gross rent: ฿240,000
• Annual expenses (40% of rent): ฿96,000
• Annual net cash flow: ฿144,000
• Cash-on-Cash Return: (144,000 ÷ 5,100,000) × 100 = 2.82%

Option B - 70% LTV Mortgage (4.5% interest, 20 years):

• Down payment (30%): ฿1,500,000
• Closing costs: ฿100,000
• Total cash invested: ฿1,600,000
• Mortgage: ฿3,500,000
• Monthly payment: ~฿22,000
• Annual gross rent: ฿240,000
• Annual expenses (40% of rent): ฿96,000
• Annual mortgage payment: ฿264,000
• Annual net cash flow: -฿120,000 (negative!)
• Cash-on-Cash Return: (-120,000 ÷ 1,600,000) × 100 = -7.5%

Wait, What?! The leveraged option loses money annually? Yep. And this is why cash-on-cash return is so valuable—it shows you the actual cash reality, not just theoretical yield. 📉

But Here's The Twist: The leveraged option might still be the better investment if:

• You're betting on strong appreciation (your ฿1.6M could control ฿5M of appreciating assets)
• You can deploy the remaining ฿3.5M into other investments earning >7.5% return
• You're okay with negative cash flow for a few years while building equity
• Rents increase faster than your fixed mortgage payment (rent arbitrage over time)

See how this changes your thinking? Cash-on-cash return forces you to look at actual money movement, not theoretical yields. 💡

💡 The Decision Framework Nobody Teaches You

Here's a mental framework that'll save you from bad property decisions: the Opportunity Cost Multiplier. It's dead simple but incredibly powerful. 🧠

The Concept: Before investing $X in property, ask yourself: "What could this $X earn elsewhere, and how does that compare to my property returns over the same period?"

How It Works:

Step 1 - Calculate Your Property's Expected Return
Example: ฿5 million condo, expecting 3% net annual yield + 5% annual appreciation = 8% total annual return

Step 2 - Calculate Alternative Investment Returns
What could ฿5 million earn in:

• Thai government bonds: ~3.5% risk-free
• S&P 500 index fund: ~10% historical average
• Thai stock market (SET): ~6-8% average
• High-yield savings: ~2-2.5%
• Another property market: varies

Step 3 - Apply The Multiplier
Multiply the alternative return by a "hassle factor":

• Passive investments (index funds, bonds): Multiply by 1.5x because they require zero effort
• Active investments (stocks, other businesses): Keep at 1.0x
• Higher-risk investments: Multiply by 0.8x to account for risk

Example Calculation:
S&P 500 at 10% × 1.5 hassle multiplier = 15% "adjusted return"
Your property at 8% needs to offer 15% worth of value (returns + lifestyle benefits) to justify choosing it over passive index investing.

When Property Wins Despite Lower Returns:

• Personal use value: You'll vacation there 3 weeks/year (add ~2-3% value equivalent)
• Currency diversification: Worth ~1-2% in portfolio protection value
• Forced savings: Property you can't easily sell forces discipline (valuable for some personalities)
• Inflation hedge: Physical assets protect against currency debasement (worth ~1-2% in volatile countries)
• Legacy/emotional value: Passing property to kids has non-financial value

When Property Loses:

• Returns below 5% total while alternative investments offer 10%+ with less hassle
• You're paying professional management (eroding your advantage over passive investing)
• Property requires active oversight and you hate dealing with it (emotional cost)
• Market is mature with limited appreciation potential (you're just getting yield, which bonds can match)

Real-World Application:
You're considering a ฿10 million Phuket villa expecting 6% net yield + 4% appreciation = 10% total return. Alternative: Invest ฿10M in diversified index funds at ~10% with zero effort (adjusted to 15% with hassle multiplier). Property loses... unless you're using it personally (add 3%), get lifestyle value (add 2%), and appreciate the forced discipline (add 1%). Now you're at 16% "total value" vs 15% adjusted alternative. Property wins. 🎯

The Bottom Line: Property isn't automatically good or bad. Run the Opportunity Cost Multiplier test for every investment. If property can't beat (or come close to beating) passive alternatives after adjusting for hassle, think twice. If it offers comparable returns PLUS personal benefits, go for it. Math + lifestyle = smart decisions. 💡

🔥 Highest Transaction Volume Growth (February vs January):

• Manila BGC: +47% (post-CNY momentum)
• Bangkok Sukhumvit: +32% (expat relocations)
• Penang Island: +28% (strong local demand)

💰 Price Appreciation (Year-over-year):

• Manila BGC: +11.2%
• Ho Chi Minh District 2: +8.7%
• Bangkok Prime: +6.4%
• Singapore Core: +2.1% (stable as always)
• Kuala Lumpur Central: +3.8%

🏆 Top STR Markets (January 2026 Performance):

• Phuket Patong: 88% occupancy, $168 ADR
• Koh Samui: 86% occupancy, $185 ADR
• Bali Seminyak: 81% occupancy, $142 ADR
• Penang Georgetown: 77% occupancy, $98 ADR

📈 Best Gross Rental Yields (Verified Properties):

• Phuket Rawai: 7.2-8.8%
• Chiang Mai Old City: 6.8-8.2%
• Manila outer BGC: 6.2-7.4%
• Penang: 5.8-7.2%
• Bangkok suburbs: 5.4-6.8%

🎯 The Barbell Concept

60-70% of capital in Conservative Core:

• Singapore, Bangkok CBD, Kuala Lumpur Golden Triangle
• Freehold properties in established areas
• Completed projects with proven rental history
• Expected returns: 4-7% total (yield + appreciation)
• Purpose: Stability, capital preservation, steady cash flow

30-40% of capital in Aggressive Satellites:

• Pre-selling projects in emerging areas
• Secondary cities with infrastructure development
• STR properties in high-growth tourist zones
• Leasehold bargains with strong cashflow potential
• Expected returns: 10-20%+ (or complete loss—high risk)
• Purpose: Growth, outperformance, portfolio juice

Example Barbell Portfolio (฿10 million / $285k):

Conservative Core (฿7 million):

• ฿4M: Bangkok Sukhumvit freehold condo (5% yield, steady appreciation)
• ฿3M: Penang prime area property (6% yield, stable rental market)

Aggressive Satellites (฿3 million):

• ฿1.5M: Pre-selling Manila BGC condo (betting on 15-20% appreciation)
• ฿1M: Phuket leasehold STR villa (8% net yield, cashflow machine)
• ฿500k: Speculative investment in Johor near RTS (high risk/reward)

Why This Works: If your conservative core performs at 5% (฿350k/year) and satellites hit 12% (฿360k/year), your blended return is 7.1% while protecting most capital. If satellites underperform or fail completely, your core keeps you afloat. If satellites outperform spectacularly, your returns jump to 10%+ total. 🎯

The Psychology: The barbell lets you sleep at night (conservative core) while still having upside exposure (satellites). You're not all-in on boring stable returns, and you're not gambling everything on high-risk plays. Balanced approach = sustainable long-term wealth building. 🧘

Want help structuring your own barbell portfolio? Chat with our team—we'll help you allocate capital based on your specific risk tolerance and timeline. 💼

🚀 STOP READING. START MOVING.

The Hawook Weekly
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Back next Tuesday with more insights, opportunities, and the reality checks you need. Stay sharp out there! ⚡

Disclaimer: This newsletter provides information and education only—not financial, legal, tax, or investment advice. Property investment involves significant risk including potential loss of capital. All data is sourced from publicly available information and third parties believed reliable, but accuracy cannot be guaranteed. Market conditions change rapidly and past performance doesn't indicate future results. Rental yields, appreciation rates, and projections are estimates based on current data and may vary significantly. Currency fluctuations, regulatory changes, and economic conditions can materially impact outcomes. Indonesian foreign ownership regulations mentioned are based on announced policy proposals and are not yet finalized or implemented—investors should not make decisions based on these announcements until official implementation occurs. Always conduct independent due diligence and consult qualified legal, tax, and financial professionals before making investment decisions. The views expressed are Hawook's opinions and don't constitute recommendations to buy, sell, or hold specific properties or investments.

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