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Real Estate Investment

Lifecycle Costing for Property Owners

LIFE CYCLE COSTING for Property Owners

Before moving to Cambodia and founding IPS-Cambodia, my previous life involved pouring over detailed financial models to determine the most cost-effective outcome for Public Infrastructure projects – Hospitals, Schools, Universities, Defense Facilities etc. When these public assets are broken down to a micro level, and the service components removed, you are effectively left with a Building Asset with many moving parts. A significant part of my role was to ensure these buildings and those items within it operated at optimum efficiency and maintained full durability at the lowest possible cost. Lifecycle Costing, also known as Whole of Life Costing (WOL) is about assessing the total cost of building ownership. It takes into account all costs of acquiring, owning and disposing of a building. Why Cambodian property owners need to consider Lifecycle Costing (LC) is very simple – it’s a great way to minimize cost and maximize income from your property investment. Given the relative level of sophistication of LC, I can understand single property owners dismissing the need for it, however, the principles apply whether the property is a 30sqm studio or a 20,000+ sqm commercial building. The key to understanding and implementing an LC model is to create an Asset Lifecycle …

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Property Management in Cambodia: Trends & Developments

Property Management in Cambodia- Trends & Developments

Property management is becoming increasingly important for Cambodia’s fast-growing serviced apartment and condominium sector. Effective property management plays a critical role in maximizing the life, assets and the all-around aesthetics of a building. In addition, delivery of building services is now playing a significant role in attracting and retaining tenants, as complexes search for a point of difference in a market rapidly growing in supply. From commercial buildings to single properties to large serviced apartment/condominium buildings, the property management sector is currently a mix of owner-managed properties delivering minimal services on a budget, to professional companies providing “full services” with varying success. Professional property management is a relatively new concept in Cambodia, however, this is starting to change. Given the number of new commercials, apartment and condominium complexes being built in Cambodia, it’s a good time to analyze the property management sector. APARTMENTS Property Management for both small and large residential apartment complexes has traditionally been the home of “family management”. Many complex owners are currently unwilling to pay the required fees for a professional management company with experienced staff, instead settling for cheaper options, often hiring family members with limited capabilities. This underskilled labour more often than not delivers …

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Needs vs. Wants: Things to Prioritize On Your First House Hunt

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Buying your first property is always exhilarating—countless nights are usually spent sleepless because of the excitement that comes with it; from renovation planning, estimating utility costs, down to décor ideas from Pinterest. Indeed, nothing thrills the modern city-dweller more than the idea of finally moving to his own place. Sure, the idea of fully-furnished lofts, four bedroom townhouses, and mansions with huge yards are exciting. But at the end of the day, you have to ask yourself—do you really need all these extra pizazz for your first home? IPS Cambodia breaks down the basics that you should prioritize on your first house hunt. Floor area Are you living solo, cohabiting with your partner, or buying a home for your growing family? Do you really need all those extra rooms for your first home when you’re sure staying single for the next couple of years? Rooms Is one bedroom enough, or is an extra room a must for frequent visitors? Do you need a huge kitchen, or are you more of a fast food take-away person? Do you like watching TV while lounging in your living room’s cozy couch, or you’re good with your streaming marathons in bed? Garage Do you really …

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Little Known Facts About Siem Reap’s Current Real Estate Market

Little Known Facts About Siem Reap’s Current Real Estate Market

Siem Reap is known for many things including an abundance of excellent foreign-owned and operated restaurants and pubs, disco’s and all-around vibrant nightlife. Local flavor is on exhibit everywhere from the Night Market to the hundreds of street-food vendors that pop up once the sun goes down. It’s easy to experience the fun and excitement of this little city just by stepping outside of your home, apartment or guesthouse. But Siem Reap has a serious side also, and for those wishing to stay awhile or perhaps invest in or rent a property or apartment, there are a few facts that make Siem Reap unique in the Cambodian economy. Tourism Drives the Siem Reap Economy Siem Reap is the home to one of the world’s top tourist attractions, Angkor Wat. According to TripAdvisor, Siem Reap was ranked as the number two tourist destination in the world as recently as such statistics became available in 2015. Like a college town in the west, a certain percentage of these young visitors fall in love with Siem Reap and decide to stay, make a home here and raise a family. (Read also: Relocation Guide: 10 Things to Consider When Moving to the Kingdom of …

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Guide to House Hunting for First Time Buyers

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Whether you have visited Siem Reap a few times or have lived here for a while, one cannot help but to be impressed with the phenomenal economic growth that is occurring. Construction is everywhere, on every street that crisscrosses our town. It’s only natural that you may want to participate in this growth by investing in a home in which to live or to rent out as an investment to the burgeoning number of international travelers. It is also quite natural, once the initial excitement of this investment opportunity wears off, to be a little apprehensive, not knowing the ropes, so to speak of a new country, new people and a new economy. It makes sense, therefore, to seek the assistance of a local real estate professional to guide you through your first real estate purchase.   Related: Biggest Mistakes First Time Home-Buyers Make IPS – Cambodia’s Premier Property and Real Estate Company is a local real estate firm that  has successfully handled hundreds of real estate transactions right here in town. Our agents will be there for you to answer any or all of your questions as you get more involved in the first time home buyer process. We …

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A Fool-Proof Guide to Property Valuation

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In a market that lacks transparency, an impartial and properly researched property valuation is an important source of information for residential and commercial property owners, banks, and investors. Unfortunately, the valuation process can often take a back seat in the sale process or can be clouded by the ‘opinions’ of interested parties. At its heart, a property valuation is an opinion. Most real estate agents will be able to offer you an opinion of the market value of a property, however, it is the processes and the research underlying a property valuation, which will determine its importance. So  why does property valuation take a back seat in the sale process? Property ownership in Cambodia has a relatively short history compared to the global norm. For many property owners in Cambodia, the sale of a property is often not a commercial decision, but often one based on necessity or opportunism. There is also an inherent lack of trust in companies and institutions; especially those claiming to wield the truth. Read also: New Commercial Office Spaces And How To Choose Your Next Office Why is valuation Important? Every property owner has an opinion of what their property is worth and every buyer …

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Expert Tips for First Time Home Sellers

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Selling a house for the first time always brings a bittersweet experience. Owners should come up with a careful and logical decision in which they would benefit from it but would not compromise the future buyer. (Read also: Top mistakes first time sellers make) Here are some guides that you can follow to make “home selling” be less stressful and (somehow) exciting: Plan ahead on your next house purchase Before you decide to sell your old house, you need to be sure of the next purchase. Be meticulous and coherent on deciding what to buy for a new house. Make it a point that your future investment will be for a long term or even be for a lifetime. This would help save more time, money, and effort. Moving several times is such a hassle. Check if you could avail mortgage loans which could help if the budget is kind of rusty. Determine the right selling price of your house Research the value of your house. Some first time sellers think that it would benefit them if they sell it for an excessive high price but sometimes, it also means the property could stay in the market for a longer time. …

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Top Mistakes First-Time Home Sellers Make

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With the Cambodian housing market emerging as a tough commercial battleground that swarms with cheap home-sellers, dabbling in the business can be downright challenging—especially if you are a neophyte. If you do not know your way around the market, you can unwittingly commit a lot of mistakes, which in turn can transform your home-selling venture into a massive disaster. Here are a handful of slip-ups you must avoid if you are a first-time seller who hopes to dodge the worst case scenario: Getting too emotionally involved in the process It can be difficult to emotionally detach yourself from your home, more so if you toiled hard day and night to get the means to secure it. There is a good chance that the property has practically been an extension of yourself throughout the years you spent living in it. But once you have made up your mind to put it in the market, you must stand up and perform the role of the businessman out and out. For instance, you might have loved how those walls were perfectly coated with peach-hued paint, but some people may not share the same opinion with you. Your best course of action is to …

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The Enforcement of Cambodia’s Business Laws

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Cambodia has traditionally been an easy place to set up and conduct business in SEA region, as the government has often lacked the will or capabilities to enforce a range of standard regulations and taxes. With loose regulations, many local and foreign businesses have had the luxury of picking and choosing which rules and taxes they adhere to. However, 2016 has witnessed a palpable shift at various government ministries with many of them shifting towards stronger enforcement resulting in many businesses scrambling to comply with the applicable laws.   One of the major areas which has been targeted by the government has been property related taxes. “Land or Property Tax” is the annual fee paid by owners of landed and hard title property and is now being enforced much more rigorously. Whilst seemingly straight forward, this has created a number of issues for businesses. Recently I have heard a number of frustrated business owners who are renting office space tell of a situation where their legal documents (certificate of incorporation, relevant licenses, etc.) are not being released by the Ministry until the landlord produces a property tax receipt for the corresponding year. This is a delicate situation as the business …

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The Nominee Structure for Foreign Buyers – How does it Work?

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The vast majority of properties purchased by foreigners in Cambodia uses what’s known as a “nominee structure”. At IPS Cambodia, approximately 95% of all our foreign clients choose this structure, as it’s cheap, secured and fast, especially when compared to alternative options such as a Land Holding Company (LHC). Often we have clients who have a Khmer partner or colleague who they put forward as a nominee, however if they don’t, there are a range of options available to source a nominee for the property for the duration of your ownership. Having a nominee by itself definitely carries some risk which is why we highly recommend using “nominee security agreements” in order to mitigate the risk of having your property held in a third party’s name. These security agreements are directly between the foreign buyer and the nominee and normally encompass a total of four securitization documents: When purchasing a property using a nominee structure, the process works as follows: 1. A property is purchased by the foreign client and the property title is transferred into the Nominees name. 2. When the new titles are received a mortgage and or lease is registered at the Sangkat office. The remaining nominee security …

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