Hello Expats!
I am in the process of deciding whether to rent or buy a 1 BR condo up to 65 sqm (with a balcony and good river view), say, I am particularly interested in the Mekong Gardens or the Casa Meridian property (assuming the purchase price is $75k-$99k) where the location is no farther than 9km from NagaWorld Casino. Can anyone give me a good monthly estimate for the following:

1. The condo maintenance fee, taxes, and utilities.
2. The rent for the same sized condo unit (plus any utilities and other rent related expenses). Is high speed wifi included in most new buildings?

The answers to these questions will certainly help the decision making process. From an investment perspective, would you rent or buy? Would you pay cash? I appreciate your responses and hope to make some new friends. I use WhatsApp if any expat would like to discuss more in depth offline.

I'm not familiar with either property.

In general, unless your planning on living there for 5 or so years I'd skip buying in Cambodia. If your set on buying, then you need to find a local resource that really knows the lay of the land. There is a lot of these type developments going up and I'm sure some will do well and see strong price appreciation - there are going to be several that effectively become ghost towns.

Even if you pick a "winner" - being Cambodia - there is a decent chance that much of your "winnings" end up in someone else's pocket.

Good Luck

Buy or rent..depends on your age. how old are you? you need to do the math on CAPEX vs OPEX. I am in my 50's, so buying is a mugs game as rent even at $1500 per month works out less expensive than buying. If younger than say, 45, go for it.

MikeD wrote: ↑Wed Jul 03, 2019 8:41 pm Hello Expats!
I am in the process of deciding whether to rent or buy a 1 BR condo up to 65 sqm (with a balcony and good river view), say, I am particularly interested in the Mekong Gardens or the Casa Meridian property (assuming the purchase price is $75k-$99k) where the location is no farther than 9km from NagaWorld Casino. Can anyone give me a good monthly estimate for the following:

1. The condo maintenance fee, taxes, and utilities.
2. The rent for the same sized condo unit (plus any utilities and other rent related expenses). Is high speed wifi included in most new buildings?

The answers to these questions will certainly help the decision making process. From an investment perspective, would you rent or buy? Would you pay cash? I appreciate your responses and hope to make some new friends. I use WhatsApp if any expat would like to discuss more in depth offline.

You cannot get unit from Casa Meridian at that price anymore. The prices I have seen starts from $150k up. Not sure what is the Mekong Gardens but from one of the Mekong View Tower condos you might be able to get unit with that price as they seem to be building again new one.

1) Monthly maintenance/management fee is between $0,3 to $3 per sqm, usually around $0,5/sqm though. There might be additional sinking fee which usually $0,1-$0,5 per sqm (you might be able to pay it fully during key handovers or the previous owner might have pay it). Electricity can be $0,2-0,35/kwh, depending on the building and do they have generator etc. and tap water max. $5 per month. Property tax is the only tax and you can read more about it here: https://ips-cambodia.com/cambodia-property-tax/ but basically it's really tiny amount.

2) From Casa by Meridian you can get 1br for around $700 per month + internet and electricity. High speed internet is about $15-$50 extra depending on the speed you need and do you want mobile internet or fixed fiber connection.

I would say rent first and get to know the market before thinking of buying as I think you haven't really spent much time in Cambodia?

Renting and hotel vacancies shpuld be plentiful in PP. I am afraid these damn Chinese will turn PP into another "Chihanoukville", artificially inflating realestate prices in the process. I would like to read more responses.

I have been investing in apartments in different countries for 10 years now, and manage a small portfolio of studios, so I can share a few thoughts about your dillema.

It is very easy to decide: definitely renting is the better option in Phnom Penh for now (not so in Sihanoukville though).

1. The rental yields are actually very low in Phnom Penh if you compare them with some other 3rd world countries. A quality, new apartment in a reasonable location (not the one you mention, but in my development where I rent) costs around $2000 per square meter. 65sq m means $130k. At the same time, the same 65m condo can be rented for $350 per month (or $4200 per year). And that's standard around Phnom Penh - just compare rental vs purchase prices in the same buildings. It will take over 30 years for your investment to pay off if you were to buy in my block. Instead, invest your money with a higher return and use the monthly proceeds to rent the same apartment you intended to buy. You can invest money in a business, in an apartment in a higher-yielding country, in Micro Finance etc. for returns above 10%. For example, I own a few modern studio apartments in UB city, Mongolia. I bought them at +-$20k each, and have been renting them at $400 per month to locals and expats there. Instead of having just one apartment in Phnom Penh, I can have 5 in Ulaanbaatar, where rental prices are comparable to PP. Hint: It is better to buy than it is to rent in Ulaanbaatar. In Phnom Penh, it is the opposite. Reasons for yields/prices being at those level are complex, but something for a separate post.

2. If you buy, buy a small unit. Or in other words, rent luxury, buy utility. A Small apartment, let's say a studio 30m2, costs roughly the same per square meter as a large 3-bedroom 150m2 in most developments. Let's say you have chosen a condo building, and they offer you two choices, a studio, and a 3-bedroom. The price they sell is $1k per square meter, so you will pay $30,000 for the studio vs $150k for the 3-bedroom in the same building. But the rental situation is very different. While the small flat can be rented for $300 per month easily, the 3-bedroom in the same building will not achieve 5 times more - $1500 per month - no chance. More likely, rent will be around $700. So it makes more sense to rent larger, more luxury properties, but buy smaller ones. Example - instead of buying the 3-bed for $150K, buy five small units at $30K, rent them out for the total rental income of $1500 and rent your 3-bedroom from another landlord for $700, keeping $800 in your pocket every month.

3. Capital appreciation has little room to shine in Phnom Penh. Apartments are expensive - in fact very expensive, compared with average incomes, GDP per capita and other developing countries in the region. Property prices are always about the availability of cash. In some countries, (USA, UK, OZ, EU more recently) it means low-interest rates, growing wages, and banks willing to lend money. In others (Cambodia, China, Mongolia, other developing and Asian countries) it's about disposable income and savings. Basically, if there is lots of available money in the economy, the property prices go up, and vice versa. So what about Phnom Penh? The average wage is $300, and apartments cost $2000 per square meter. They are simply not affordable. It's not Hong Kong or London, and will not be (at least in our lifetime). Local banks are not very happy to lend, and if they do, the rates are 7-10% per year. With such rates and such low income, the market relies on Chinese buyers at the moment, but who will be buying your condo in 10 years' time at a higher price? Chinese? Would they not prefer new-builds where they get discounts, and of which tons are in the pipeline currently? Will they not choose another hotspot country by then and pull out from investing in empty condos in Cambodia?

4. Finally, renting gives you a degree of freedom - it's not your country, you never know what happens in the future. While you can occasionally strike a great deal if you buy at a lower than the market price, (e.g. from a desperate seller with sick mother who has to pay hospital bills), I would recommend to get to know the market first, know real, actual prices (rental and purchase), look at your financing options (if any - e.g. I bought my last apartment in Mongolia on a credit card advance), and then make your move if you see a good deal. From what I see though, Sihanoukville looks promising, with $1-1.5K per meter, and crazy high rents ($1k), maybe buy there, rent it out, and rent here yourself.

Thanks for your analysis. Can we discuss more via whatsapp?

And of course you neevr know hw well its been built in cambodia. Check fire escapes, sprinkler systems, did the contractor steal the rebar? I would not have any confidence in the condo being there in 10 year judging by the appaling state of some "newish" ones i have looked at. Windows not fitting, plumbing no working, tiles falling off the wall, cracked plaster and no obvious way of getting out in a fire except the lift or a central stairwell!!