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Unqualified developer? How real estate investment circumvents the developer trap

2020-01-19
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Summary:Unqualified developer may affect your investment plan, we may distinguish it first.

The overseas real estate market is diverse, with different property market policies and development maturities, but as long as real estate is involved, it is closely related to developers. Today, I will briefly introduce the real estate developers in Cambodia, a land of investment in Southeast Asia.

The construction and real estate industries in Cambodia have developed rapidly. In the whole of 2019, the total investment in the country's construction industry reached 11.437 billion U.S. dollars, almost doubling the 5.755 billion U.S. dollars in the same period of 2018. Investment has increased, and real estate projects have blossomed all over the country. From 2000 to 2019, the number of approved projects across the country has reached 48,446. In 2019 alone, 4,888 construction investment projects were approved. The explosive growth of the construction and real estate industry has had mixed advantages and disadvantages for Cambodia, which has just started, and developers have not been well regulated.

First. Characteristics of Cambodian property developers

Low investment requirements and more small developers. The Cambodian property market is an emerging market. At present, a mature market supervision system has not been established, and the review of developers is not rigorous. In addition, most of the real estate projects in Cambodia are small in scale and the development cost is not high, which has attracted many small-scale developers. Development of real estate.As foreign investment is rampant, developers from various countries are rushing to settle in. Cambodia has a suitable investment environment and is highly dependent on foreign investment. In addition to local developers, the Cambodian market also has developers from China, Japan, South Korea, Singapore and other countries. Foreign developers have well-known international housing companies, and there are many companies lacking real estate development experience. It is difficult for buyers to distinguish the strength and experience of developers from all walks of life.

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Second, the lack of market supervision, developers easily lead to problems
1. Small brand developers have limited strength. They quickly build a building after buying land. Insufficient supply of funds in the later stages can easily lead to the suspension of the project and cause buyers to suffer.
2. Except for a few branded real estate companies, many developers are new to the real estate industry for the first time, lack of project construction experience, the quality of real estate is uneven, and many projects fail to meet international standards, and even serious quality problems occurs.
3. Developers will also affect rental income.
As we all know, the development of new projects in Cambodia is dominated by apartments, and many apartments provide rent out services, which will involve revenue. If the developer's strength is insufficient and the later operation of the project cannot keep up, the rental income cannot be realized, and it is also damage the interests of the buyers.
4. If developer is unqualified, you may not be able to apply for a property ownership right certificate.The Cambodian property right certificate is divided into hard title certificate and soft title certificate, and the rights and interests are different. The non-compliance of the developer will affect the application of the real estate certificate, and it is more difficult to maintain rights in the future.In fact, a project is prone to a variety of problems from land acquisition, planning, building construction to sales, property management, and rental. If the developer does not have sufficient experience in property development and operation, even one step goes wrong will lead to failure. In the end, only buyers can bear the loss.

Third, How to avoid unreliable developers and Compass provide some investment suggestions

1. Identify famed brand developers

Brand real estate enterprises are rich in funds and are not prone to construction uncompleted situations. With rich experience in development and operation, there are projects all over the world. Their planning is more reasonable, perfect and comfortable.

2. Verify developer qualification

Developers need to get approval from the Ministry of land planning and construction to build and sell real estate. Before buying property, buyers need to check the documents. Only the certificates are complete, buyers can buy the property at ease. In addition, buyers better to check the developer's qualification certificate, operation period, registered capital, building quality qualification rate, development area and other information on the Internet in advance.

3. Developer's public praise and analysis of historical projects

Buyers can inquire about the performance of the project developed and constructed by the enterprise, the degree of market recognition and the social reputation. Consider whether the real estate enterprise is reliable through the historical project situation.

4. Background of real estate enterprises

Cambodia's top 10 well-known local developers have basically maintained friendly relations with government and have the Lord's title. The background of real estate enterprises is strong, which is conducive to the continuous and stable progress of the project. We can check the background of developers through professional consulting agencies, or directly choose developers who cooperate with professional agencies.

5. Chose a reliable agency or professional real estate platform

Cambodia's market is complicated. The first thing you need to know is know the market first, select a reliable agency, and cooperate with a professional real estate platform to get best result.

6. On the spot investigation of real estate

Even if a reliable developer has been selected, it is necessary to inspect the property on the spot before buying property to check construction and the schedule of the building.


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Disclaimer: The re-forward articles on Compass website are for the purpose of conveying more information, and it does not mean that the Compass website agrees with its views or confirms the authenticity of its content. Article noted as "Source: Compass original", please note that the source from Compass. The content of the article is for reference only and should not consider as investment advice, and it does not mean that Compass agree with its views.

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