Common Problems Of Cambodia's Residential Property Market For Foreigners

While investing in residential property might yield relatively significant annual returns, there are several drawbacks to be aware of before making a decision.

1. Developers with a shaky or non-existent track record

If at all feasible, buy from a developer with a track record, as examining their past finished properties will give you a solid idea of the building quality and upkeep standards.

2. Investing in the wrong area

If you're buying an investment property, do your homework on current and projected supply, as well as rental demand and market prices in the area. Consider whether there will be a steady stream of possible tenants to rent the units, as well as what will keep them there in terms of a vibrant community to support the people. Are there any schools, universities, retail malls, parks, or other things in the vicinity that will keep people interested in staying?

3. Be cautious of developers who are simply interested in making money

Consider who the developers are marketing to while selling condominiums, as well as who the condo buyers are. Local and resident expat buyers have a greater stake in keeping the home in good repair than abroad buyers who may only visit once a year to check on their investment and collect their rental income.

4. Management fees that aren't being paid or are escalating can be a red flag

The developer may manage the property for the first year and subsidize a lower management charge. Later, they hand over building management to a new firm that demands much greater costs. In other circumstances, some condo owners don't put in their fair share of effort, making it difficult to collect fees, particularly from foreign owners. This type of event could lower the value of the entire building's units.

5. Pay attention to where your money comes from

While we predict that condo investors will earn 6 to 8% on their investment, some local investors employ high-interest loans. There will be no profit from your investment if the interest rate on your loan is between 8% and 9%.

6. Find out who owns the development's title

When it comes to condo complexes, there can be issues with ownership titles. While this has not yet occurred, we advise investors to conduct thorough research.

7. Consider the supply trend in the future

While the present return on condo investment is at 10% to 12% per year, there will be more supply in the coming years. Returns may fall significantly as a result of the increased options available to investors.

If you have any questions or concerns about investing in Cambodian residential property, call Compass Real Estate for advice. You can also look at additional listings on Compass Real Estate Platform for any homes you're interested in.

Source: Post Property