7 Tips for owning a Property in Cambodia

So, you are moving to Cambodia and you want to invest in a property, either to run a business or simply just to reside or retire (like others did, and many of them are Westerners). If you are new to the Kingdom of Wonder, then there are a lot of things you need to know. If you are coming from a developed country, you will have to understand that absolutely everything here is different to where you come from. The cost of living may be high compared to other South East Asian countries, but the average wage is very low at about $25 USD per week.

Here are the frequently asked questions related to property investment in Cambodia, especially in Siem Reap.  

1.       Consider the Major Expenses attached or connected to the Property or Business.

With the improvement on rules and regulations set by the Government Administration, any foreigner can buy a business within the kingdom. Here are the major expenses to consider;

·         The purchase Price of the business

·         The Property Rental Price per Month, and

·         An understanding of the “Security Deposit” that covers any damages to the rented  property

·         Please take note that setting up a company costs you from about $900 - $1500, plus Attorney’s fees not lower than $500.00

2. Interested in High-Rise Condominium or in Gated Communities?

During my last visit to Phnom Penh, I have counted at least 15 new high-rise buildings under construction while on the rooftop of my hotel having breakfast. My thoughts were simple, “Wow! Who is going to be able to afford to live in these buildings?” Siem Reap is a bit different than Phnom Penh. There is no high-rise building boom here other than all the semi-detached houses that are in the newly built gated community villages, also known as Borei in Khmer language (allow me to correct myself, because here too there may be an over-supply of units).
 
If you are seriously considering investing in it, then here are the following considerations:

·         Bank Loan Repayments

·         Body Corporate Fees

·         Apartment Contents Insurance

·         Financial Return on Investment via a tenant or a buyer for your apartment

3.       Who can Buy and Who is not allowed to Buy?
It’s a Golden Question that I normally hear from my customer “Who can buy a piece of land at ground level in Cambodia?” In some countries, while in some countries, Foreigners are allowed to invest in property, but here in Cambodia there are rules to follow.

If your citizenship is not included in the list below, then you will need more advice.

·         Cambodians

·         Chinese

·         Vietnamese

·         Other foreigners can only buy land or any building that is at ground level via NOMINEE system.

·         Cambodian Government has a list of Foreign Nationals who are not allowed to buy property as per decree.

4.       How to secure property ownership?
This is a hot topic and often, my supposed to be short presentation tends to become rather lengthy due to many footnotes or anecdotes. In short, my clients prefer to have more information to help them make the right decisions.

·         You can buy a property through a nominee structure in which you buy the property in a Cambodian person’s name with provisions written into the agreement that gives you full control over the property.

·         You can buy a property through a local company (again with a written agreement).

·         You can buy a property by being Married to a Cambodian, in which case both the foreigner and the Cambodian’s names will be on the title.

·         You can buy a property after becoming a citizen of Cambodia after Paying about $320k to the Cambodian Government.

·         You can buy a property after becoming a citizen of Cambodia and by doing some great work for the Country or for the Cambodian Government.

If you have time, let’s meet and I’ll explain to you personally. 

5.       Available Property Titles

You have all the options, either Hard Title, Soft Title or via Private Ownership (Strata Title in Co-owned Buildings). Here are the types of property titles that they can issue to you as a buyer.

·         Hard title - firm property boundaries established and set after agreements with neighbors and road making and town planning authorities

·         Soft title - The property has preliminary property boundaries not yet agreed to by the neighbors and road making and town planning authorities.  You may lose some land when the final property boundaries are decided for the Hard title.

·         Private Ownership via Strata Title in Co-Owned Buildings
Remember to check if you will also own a car parking space under the Strata title.

6.       How About Zoning Rules in Siem Reap

Again, it’s another hot topic that it needs emphasis. The Apsara authority was established to protect the Angkorian Temple heritage sites and to also act as the counseling body responsible for deciding zoning laws; residential, residential and combined with light commercial, commercial, and heavy industrial, parkland, government owned land, national heritage, etc.

• Tip 1:  If you are going to, or planning to buy a property, you’d better check first that your intended location it isn’t in an Apsara zone. If it is in an Apsara zone, the Apsara authority can legally take it away from you. It might sound absurd, but that is a fact! 
• Tip 2: Make sure you have an exact property location marked out on a map and take it with you for approval.
• Tip 3: After it has been approved, you would want to have it in writing and signed by the authority that it is OKAY for you to do what you plan to do on this property (there are some rules here though).

As for my personal experience, my wife and I consider ourselves lucky, because we are planning to own a property that we really loved, but we just didn’t have enough money.  When we told the story to a friend of ours who had been a real estate agent for in Siem Reap for many years, he said we were fortunate that we didn’t buy it because the Apsara Authority can take it away from us any time they wish and we would have lost a big amount of cash. It goes without saying that this is a property that we at Temple City Real Estate will not be selling.

If you are curious to understand more of this, then let’s meet and I’ll show it to you on a big screen.

7.       Prices? Prices? Prices?

Price for a certain property varies from location to location. If you’re on a budget, find out in here their market value.  

• Simple Apartments: Western Style 1 bedroom-apartment (Semi or Fully Furnished) may range around $350 to $450 per month
• Luxury Apartments: Semi or Fully Furnished Western Style 1 bedroom-apartment is about $650 and more monthly.

• Siem Reap Houses: Well-designed house (Semi or Fully Furnished) to suit Foreigners can be rented about $500 per month.
• Siem Reap Private Villas: 3 to 4 bedrooms with swimming pool ranges from at least $1,200 per month while a Large Villa with 5 or 6 bedrooms and a swimming pool will cost you about $2,500 monthly.
• Tip: If you are on a small budget, then why don’t you head outside of town. The prices of housing in rural areas are lower in comparison to houses downtown, in or near the city center.

Overview of Siem Reap Property Market

Back in 2014, there were 450 Hotels and 50 under construction, 132 guest houses and numerous apartment blocks. Now over the last three years, more hotels have been built as well as ‘too many to count’ apartment blocks have been thrown up at a relentless pace.

It seems that there is no planning authority to regulate how many hotels and apartment blocks may be constructed. There are now so many that it has pushed rental prices down by some 20% to 30%, and if the apartments are not designed to meet western design and comfort levels, it will take much longer to find tenants.

As a property consultant, it is my job to know the ins and outs of this business and through this article, I was hoping that I can give some good guidance on how to buy a property within Cambodia.