Considerations before you buy your first home

Aug. 7, 2017, 6:29 p.m.

In Cambodia, purchasing a property for the first time can be an overwhelming task. If you are a first-time home buyer, you should consider the following points before you make any financial commitments.
Purpose of  the new home:  

Different types of houses will bring you and your family different advantages and disadvantages.

If you just want a house to live with your family, consider a villa home. Villas offer a lot of space for your family to grow, and a relaxed and private setting. If you intend to buy a home from which you can generate income through opening a retail shop, consider a shop house in a location where you can find consumers. These types of properties allow you both residential and commercial purposes. However, if you really value a location in the central city and want to live a more modern life, you can consider a condo unit. The extra benefit of a condo is that you should be able to rent it into the future, if you decide not to live in it yourself.

If you are planning on a profitable resale, you can consider buying a property off-plan (under construction) in a new development project. New Borey projects in the suburban areas usually have high potential for reselling in coming years. Or, if you have more money to invest, you can consider a new condo unit for higher returns when it comes time to resell. However, keep in mind that often these properties won’t be ready to live in right away, and also make sure your choose the right developer with the correct licenses and history.

Location of your first home:

Purchasing a home at the very heart of the city sounds like a good idea thanks to its fundamental infrastructure and utilities. However, with almost all property prices within central city reaching their peak in recent years, and worsening traffic congestion during rush hours, most new home-buyers (in particular, middle-income class Khmers) are preferring to buy in the suburban areas of the city, at lower prices.

The outskirts of Phnom Penh and other urban centers of Cambodia are an untapped area where there are offerings that have high potential for small businesses, commercial centers, population growth, and property price growth. At present, housing projects are shifting towards the suburbs to push the area to become more attractive and populated. Whether you buy to live, do business, or resell, you should look for a good location adjacent to markets, schools, hospitals, and other amenities. Location is an extremely important consideration for any property investment.

Budget plan:

Preparing a budget plan for your new home is very important for your future expenses. With a clear budget plan, you will be well prepared for your current and future payments. Without a regular income, you may run into problems after your first home purchase. If you’re planning on these costs in advance, it will make it easy for you to decide how much money you should and can borrow money from the bank.

Home loan application:

Most homebuyers in Cambodia usually do not have enough money to pay outright. This is why they turn to the bank for loan options to pay for their new home. Different banks will offer different types of home loans at various interest rates. However, when you get a home loan, you will be bound by the bank’s terms, including the interest rate charged on that loan. After qualifying for a home loan, you will be required by the bank to submit collateral, income confirmation letter, identity card and proof of a guarantor. For this reason, it might be best to consider your loan limits before you select your dream home.

Another option is to pay directly with the developer (if it is a new project). In this case, the interest rate on home loan may be higher than that of the former option - so be careful before you sign up.

Extra costs:

In fact, purchasing a new home does not mean that you pay only for your property’s price. You also should think about other extra costs in addition to the property’s value. There are a number of fees involved you need to know when you buy a property. Those costs or fees include ownership transfer tax, legal fees, property tax, title verification, loan processing fee, application for registration, property insurance, real estate agent’s fee, and ongoing costs.  Learn more about the details of these extra costs on realestate.com.kh today.

Read more great Home Loan and Mortgage Advice, on Realestate.com.kh today! Or, if you are ready, apply for a home loan on Realestate.com.kh today!

For the best mobile experience please use our app to: