Lonestar wrote:Juan,

I think that the big returns have already been made..........in Phnom Penh. However, since 2008-2009 and especially recently, land prices greatly increasing in the areas surrounding Phnom Penh. In the last few years, I have doubled up on a piece of land, my wife has doubled up on three pieces, my friends in Kampot have doubled their investment......and a friend who built near the Mekong has more than doubled his investment. It is not about investment based on past returns............for me, it is about the fact that Cambodia will follow the same development model as other countries. More and more people will move to the Capitol, and as land in Phnom Penh becomes too expensive

.......the city will spread and land in the outlying areas will increase in value.

I disagree with the Grinch in that I would not be looking to buy extremely expensive real estate in Phnom Penh and hoping it gets even more expensive. I like buying cheaper land farther out.

One caveat, I think you need some local knowledge and a lot of patience.

At least with land, you have a hard asset that you can borrow against.........or at the very least, put a house on if push comes to shove.

And......if the country goes tits up and descends into 90's style chaos, with foreigners fleeing the country in droves and land prices crashing........that would be just fine with me.

I'm not saying the city will not spread outwards, but more money is being invested in properties in the already established city centre's and that is where to invest. That is where the people and jobs are and that is where the money is. There may be more farm land and cows outside the city, but cows don't walk around with money , Lexus cars do.
Investment wise the city will go up, as it already has the infrastructure and services, more that it will go out, where totally new services have to be built.

To each his own. You can buy land for a few two thousand a square meter in the city center and hope it goes up to four thousand, you can buy land a few miles outside the city for a hundred a square meter and hope it goes to two hundred, or you can buy rice paddy land an hour a way for two dollars a square meter and hope it goes up to four. To me, it is a lot easier for something that costs two bucks to go to four bucks.........than it is for something to go from 2k to 4k.

I like Takmau quite a lot, and I think there is still a lot of affordable land in Kampot. A year or two ago, they were developing one of the "international villages" a couple of kilometers outside of Kampot and they were selling lots for 1,750.00 each. The lots were about ten meters wide by I think thirty meters deep. So for 3,500.00 you could buy two side by side and have a nice sized lot to build on. I wanted to buy but did not...and now they are worth more than twice that. For that kind of money.........what is the downside? Worst case is you have a nice piece of dirt you can put a house on.

There is always a risk in buying something.........but there is also a risk in not buying. Cambodia will continue to become more expensive in the future, and those who do not buy might find themselves priced out of living here.

Actually, Lonestar raised a good point, land can be used as security, but I think that would tie you to Cambodia.

I just think if you have spare cash lying around, why not buy in a country that has historically guaranteed land titles?

Or a country with a fairly stable future.

Or a country with a better infrastructure?

Not every one of them is that much more expensive, Cambodian real estate is way overpriced, imho.

I doubt any of you would not be wishing they were elsewhere when one particular person pops his clogs.

I think it's safe to say a shitstorm will happen.

vladimir wrote:Actually, Lonestar raised a good point, land can be used as security, but I think that would tie you to Cambodia.

I just think if you have spare cash lying around, why not buy in a country that has historically guaranteed land titles?

Or a country with a fairly stable future.

Or a country with a better infrastructure?

Not every one of them is that much more expensive, Cambodian real estate is way overpriced, imho.

I doubt any of you would not be wishing they were elsewhere when one particular person pops his clogs.

I think it's safe to say a shitstorm will happen.

No offense vlad but on the matter, a shitstorm of posts is all I'll take your word for.

vladimir wrote:Actually, Lonestar raised a good point, land can be used as security, but I think that would tie you to Cambodia.

I just think if you have spare cash lying around, why not buy in a country that has historically guaranteed land titles?

Or a country with a fairly stable future.

Or a country with a better infrastructure?

Not every one of them is that much more expensive, Cambodian real estate is way overpriced, imho.

I doubt any of you would not be wishing they were elsewhere when one particular person pops his clogs.

I think it's safe to say a shitstorm will happen.

I believe most banks will not take land as security unless it has a hard title, if you needed to borrow money [ that counts foreigners out ] which would leave you with the choice
of borrowing privately at higher interest rates and from unscrupuless dealers .




Sent on my Samsung Smart tv.

That's where the expensive banquet and the MC Hammer pants day finally becomes useful.

Duncan wrote:Sent on my Samsung Smart tv.

I think it would be a disservice to let this pass without comment. Top marks, Duncan.

TheGrinchSR wrote:

juansweetpotato wrote:

Lonestar wrote:There are two types of expats. Those who are buying land and seeing a huge return on their investment, and those who will sit on their bar stools and watch this fast moving economy pass them by.

Now is a great time to buy land. Cambodian real estate is greatly protected by the fact that most sales are in cash, so a huge market slump tends to result in a flattening or slight decrease in prices............but not the wholesale crash that occurs when all of the money is borrowed.

If this country is thrown into political chaos during the next election..........it will be another great time to get in.

Interesting view. I hope you are right. Do you have any precedents that you are basing your assumption on?

Land prices doubled and tripled etc in the 2008 to 2009 period before the crash, what's been happening to them lately? Haven't most of the big returns already happened?

Anyone investing in the future based on past returns is nuts. The trick to successful investing is to look for things in short supply. Such as land in central Siem Reap or Phnom Penh. Buying up land in the rest of Cambodia seems to have very little mid to long-term upside and the short-term upside is minimal compared to risk.

When I lived in the UAE everybody told me what a sucker I was not to buy into the property market. A year later, the inevitable crash arrived. I know people who lost millions. They were the "smart expats" of the original post. There's one born every minute and they're normally shouting about it online too.

Investments in Cambodia are generally high risk with little upside. When you can get 8-9% in an interest bearing bank account, you need a much, much higher rate of return to make investing here worthwhile. Don't count on land or property to deliver those returns. Particularly as we start to count down to the next election.

Lonestar already beat me to it, but you're displaying a lack of foresight. I've personally seen tons of places already double, triple, quadruple... I own real estate in the city as well as two plots of land in the countryside. Nothing huge, but they're good for me. Land in the city is prohibitively expensive and now requires a LOT of capital to buy. I'm not likely to see any more huge gains on what I have given the location. I'm thinking of selling off one place in the city to further invest in the countryside. I know of 4000sqm places for 2k. I've seen my land grow in value and friend's land grow even more.

In Phnom Penh the streets are already paved, water and electricity access are already there and so on. In contrast, in the countryside I've witnessed singletracks turn into paved roads, electricity poles being installed, plantations creeping up. The changes are happening there, not in PP. I've only been to Thailand once, but when I see Thai soap operas and their beautifully paved countryside with electricity and so on, I know that that's where Cambodia is headed. I'm currently broke as hell (all my money is tied up), but if I had spare cash, I'd buy more land. You do have to know where to buy, of course, but those who are always bitching don't know what they're talking about (Cambodia Daily readers?). It's not for everyone, but I'm quite comfortable investing in Cambodia. I've owned here for 6 years and wish I could have shown up here 20 years ago and bought up stuff back then.

First with a 9% rate of interest on savings accounts - that's double your money every 8 years with near zero risk.

Second, you are basing your chasing of real estate on past performance. "I've already seen double" is exactly basing things on past performance.

Third, investing in "expensive" land is smart. It's expensive because it's scarce. Map the property value trends of any (non-war zone) capital city and you'll see that - everywhere - there is nothing but upside. I know people here putting together land portfolios in the tens of millions of dollars ranges - they're not staggering round the countryside looking for cow paths - they're sticking they're money in PP and SR (and not SHV for which they see much less upside).

The price of an investment is a particularly poor way to evaluate that investment. The return is a much better thing to look at. Cambodia will never be Thailand. The work force is too small. The education system light years behind Thailand's. National infrastructure is nearly completely absent - no rail network, no power generation facilities of any significance, an embarrassing road network (particularly connecting Thailand to Vietnam) etc. makes Cambodia a non-starter for many forms of serious investment.

I'm not bitching about Cambodia. I like investments where the fundamentals are clear and not driven by "belief" or the price of entry. When you can throw your cash in the bank and guarantee that the principal will double every 8 years... you have to offer much better reasons for investing in land than the belief that one day Cambodia will be Thailand.

TheGrinchSR wrote:First with a 9% rate of interest on savings accounts - that's double your money every 8 years with near zero risk.

It's fairly easy to get 20%+ in the countryside with minimal risk. That rate is getting much more difficult to achieve within the capital.

TheGrinchSR wrote:Second, you are basing your chasing of real estate on past performance. "I've already seen double" is exactly basing things on past performance.

No, I'm basing my conclusion on trends. Urbanization, growth of provincial towns, extremely rapid growth of the road network, gentrification of urban populations (including provincial town residents) and so on. These are all facts that are fairly easy to assess/notice. If you're into fundamentals, then it should be fairly easy to accept the trends here for the past fifteen years in Cambodia. Have you noticed changes in Phnom Penh over that time period? Changes in Kompong Cham? Changes in Kampot?
The fact that my own investments have grown only help mitigate/help future potential losses. Is now the perfect entry point for owning land here? I honestly don't know and never claimed I did. No one does. The best time was 10-20 years ago. What I do know is that Cambodia will keep on developing whether you buy land or don't. Those who were sitting on the fence 7 years ago are still sitting on the fence, and will likely be sitting on the fence their whole lives (in regards to RE here).

TheGrinchSR wrote:Third, investing in "expensive" land is smart. It's expensive because it's scarce. Map the property value trends of any (non-war zone) capital city and you'll see that - everywhere - there is nothing but upside. I know people here putting together land portfolios in the tens of millions of dollars ranges - they're not staggering round the countryside looking for cow paths - they're sticking they're money in PP and SR (and not SHV for which they see much less upside).

I never said there was no upside in the city. There's still a lot, but Phnom Penh is still relatively expensive compared to similarly-sized cities in the region, and I personally feel the city is in a semi-bubble with limited short-term upside. If you want a safe and steady bet, then the city is still good. I'm just saying that it's easier to make even more money out in the countryside. And comparing your average expat investor with people who have million-dollar portfolios is a bit ridiculous. I'm not going to lie: one reason I've "branched out" is simply because I no longer have the capital to invest in the city. The countryside makes it possible for smaller players to make a few bucks. Plus, the allure of owning a nice little plot of land is great. If you're only into it for a quick buck, you're more likely to get burnt.

TheGrinchSR wrote:The price of an investment is a particularly poor way to evaluate that investment. The return is a much better thing to look at. Cambodia will never be Thailand. The work force is too small. The education system light years behind Thailand's. National infrastructure is nearly completely absent - no rail network, no power generation facilities of any significance, an embarrassing road network (particularly connecting Thailand to Vietnam) etc. makes Cambodia a non-starter for many forms of serious investment.

The purchase price is certainly an element worth considering. The same way you'd ease into the purchase of stocks by spacing out your entry points into thirds or fourths (and thus dividing up your capital), it's easier to do the same by investing in the sticks. If the lowest entry point to the Phnom Penh real estate game is say,100K, then you stand to lose a lot more if things go stagnant than with the low entry points in the countryside. That way you won't have as much cash tied up into real estate, which we all know is a fairly illiquid asset.

And again, the return is something I can personally talk about, given that I've experienced it. I've had these debates about twenty times in the past five years on K440 or here. Ultimately, those who think investing in RE/land is a good idea are those who have experience in it and have owned real estate/land for several years already and have seen good returns and perfected their approach. Those who think it's a bad idea are generally (99% of the time) people who have never owned land here. Essentially, those people are just saying it's a bad investment because deep down, it doesn't correspond to their risk profile. They're simply not comfortable with it, which is fine. Saying it's too risky for you is one thing, but stating it's a bad form of investing without having any personal experience in the matter is somewhat laughable. I also suppose you'll always have the types who think civil war is imminent (Vlad), but that just boils down to personality.

TheGrinchSR wrote:I'm not bitching about Cambodia. I like investments where the fundamentals are clear and not driven by "belief" or the price of entry. When you can throw your cash in the bank and guarantee that the principal will double every 8 years... you have to offer much better reasons for investing in land than the belief that one day Cambodia will be Thailand.

I think that's where you fail to see the light (and the fundamentals which you claim to like). I'm not saying Cambodia will "become Thailand", I'm saying that all that growth and development that Thailand has experienced over the past several decades has been slowly happening here over the past ten to fifteen years, and there's no reason to believe it'll suddenly stop in its tracks. More and more people in the countryside own cars. It will never be Thailand, I agree, but Cambodia is still playing catch up. You could have kept that money in a bank for 8%, or you could have bought a villa ten years ago somewhere in PP or land on the outskirts of Preah Vihear. Which do you honestly think would have given you the best return? I'm not saying it's easy. As with any investment, you need to do proper due diligence, but it's fairly easy to double your money in much less than 8 years or so by investing in land here, and I don't see a valid reason as to why the trend would slow down much over the next five to ten years.