Villa Vs. Condo? The Verdict is out

Looking to invest in the abundant real estate market in Phnom Penh but not sure whether to purchase a villa or a condominium?

villa or condo “Villas are the better choice”, advises Ms. Tang Hour, President of Amatak Property Services, “Investors will make more money in the short-term depending on the location.” Chee Yeong Yap, Project Director of Grand Phnom Penh International City agrees, “Ownership of landed property is better than condos, especially in underdeveloped countries like Cambodia.” Tang suggests Boeng Keng Kang 1 (BKK 1) as the top location with those located around Monivong or Norodom Boulevard as the next best choices. BKK 2 and BKK3 as well as Toul Tom Poung and Toul Kork are also lucrative options. [caption id="attachment_80518" align="alignleft" width="225"] Chee Yeong Yap, Project Director of Grand Phnom Penh International City[/caption]

ALL VILLAS FOR SALE IN PHNOM PENH

“You can make up to USD 1,000 extra per square metre after just six months to one year of selling a villa in BKK 1,” she says, adding that villas are far easier to resell than a condominium. It is important to note that when purchasing a villa in Cambodia, the average deposit amount required is between 20-30 percent of the total price. Then the outstanding balance is expected to be paid in one lump sum. Whereas when purchasing a condo, an initial deposit of between USD 1-3,000 is required up front, then 5-10 percent of the total price is paid each month as a mortgage repayment. Tang advises against investing in a villa within a Borey as this does not make as much money as a stand-alone location. “Buy landed property that has a hard title and proper development planning,” says Chee, “Make sure there is a longer term plan such as Township development as opposed to a Borey Development. Ensure that plans meet the government’s minimum requirements.” For those set on buying a condo, Tang says your best bet is to purchase more than one; aim to buy multiple units in order to get a better return in the longer-term, “Buying individual units won’t make money, it’s better to buy between 2-5 units if you can afford it”. [caption id="attachment_80918" align="alignright" width="200"] Tang Hour, president of Amatak Property Services[/caption] Chee advises to invest in a condominium located near international schools as this will be relatively safe in the longer term. Another good money-making option is to purchase land around riverside or BKK 1 and develop a condo complex. Tang says this will give you a decent return over time but to bear in mind the management costs involved. “Not many local buyers are willing to pay the monthly maintenance fees as these can be expensive,” says Chee.

INVEST IN CONDOS IN CAMBODIA

He adds, “Many condos in the city do not provide sufficient car parking for owners not to mention parking for their visitors. Long term this is a nightmare for residents particularly around high density condo developments.” Keep in mind that legislation passed at the beginning of April 2010 allows foreigners to own property in Cambodian buildings above the ground floor. This works well for apartments in condominiums, but does not apply to villas. Learn more about Cambodian land titles here.