Compass Real Estate > Cambodia Real Estate Information > Beware of property purchase trap in Cambodia.

Beware of property purchase trap in Cambodia.

2020-01-11
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Summary:How can we judge the property is potential for investment or not?

1.Delivery standard 

Although the total price of Cambodia's apartment projects is not expensive, they are decorated. Some developers will also equipped with furniture and appliances. At present, most developers provide property management services. The buyer can entrust the property management service to lease and manage the property, and the investor can rent out for rental.

2. Scope of real estate
Cambodia's real estate is still in the early stages of development, the market is immature, locals have weak purchasing power. Real estate purchasing is mainly for investment purpose. Therefore, the scope of real estate in Cambodia is small, and Phnom Penh R & F City is a large project relatively. 

3. Property Type
New property are basically used for investment or holiday retirement, like apartment. Some projects also include villas and townhouses. There are a few office projects in the market.

4. Property rights
Property rights in Cambodia are divided into land property rights and residence property rights, but they are not jointly owned, and the buyer can only choose one. For example, locals who buy townhouses connected to the land only enjoy the property rights of the land, but not the property rights of the building, while foreigners can only buy the property rights of houses above the second floor, only register the property rights of the building, and no land property rights.There are two types of property rights in Cambodian real estate, namely, freehold property rights and fixed-term property rights. Freehold property rights are hard title, and limited-term property rights are soft title.Hard title refers to the form of property rights recognized by the central government based on the Land Law. Most of the newly built properties are hard title, including land use certificates and house use certificates. They are protected by law and can be mortgaged. Hard title are freehold property rights. A soft title is a property issued by a local government but not approved by the laws of the Central Government of Cambodia. It is usually an ordinary A4 paper, and the term of the property right of the soft title is based on the actual registration period.At present, the newly developed commercial houses in Cambodia are basically hard-title real estate, which is the so-called freehold property rights, but it does not include land property rights. If buyers are interested in real estate, it is necessary to distinguish the property rights.

5. Investment destination
Land and property in Cambodia are very popular, but not all cities are suitable for investment. There are not many cities that can achieve real estate yield in a short time. Siem Reap, a major tourist province, and special economic zones.

6. Rent out service and leaseback
Rent out service means that the developer or agency company looks for tenants for the owner, and the owner must pay service fee to them. Leaseback defined as that in order to attract buyers, buyers pay the owners fixed annual investment yield after purchasing the properties, and the owners manage the properties themselves after the contract expired.There are many leaseback projects in Cambodia, but there are both advantages and disadvantages. You must consider factors such as house price and location. Leaseback yield is not the only element buyer may concern about.

7. Floor area
Cambodian property is generally calculated based on the floor area of the apartment. There is no public area. However, there are also some developers who use the gross area for caculation.

8. Payment methods
Cambodian apartments are basically used for investment. The total price is relatively low, and full payment or installment payment is more common. In addition, foreigners' loans are more complicated. Generally, foreigners will not apply for loans.
9. Apartment facility
Cambodia has a large number of individual buildings with a small capacity, but apartment buildings basically have their own swimming pools and gyms, and residents can use them for free.
10.Currency settlement
You must consider the currency payment situation. Although Cambodia has local currency, it is generally settled in US dollars when buyer buying property. Be sure to prepare sufficient US dollars before buying property.


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