How to Shop for the Right Land

• 21 March 2018
• Local News
• 6769 Views

As the trend of buying land has become very popular among investors in Phnom Penh, many ask about the associated risks.

For example, the land prices in Kandal Stueng district have dramatically risen following a rush to purchase land in the area after the news about the new airport being located there. Is it right or wrong to invest in this kind of land?

Construction & Property Magazine Reporter sat down with founder and CEO of Key Real Estate Co., Ltd., a real estate analyst, and former vice-president of the Cambodian Valuers and Estate Agents Association (CVEA) Mr. Sorn Seap to ask his advice on this hot issue.

Should we buy land by following trends?

Common sense says, if people don’t get a benefit out of doing something, they might not do it. People keep following the trend, meaning they gain the benefit of buying the land there. However, when it comes to my answer, I would answer Yes and No.

Yes, if you have spare money of your own and do not expect to get the benefit back in short-term. And Yes, if you are a land expert who have the skill to analyse the land status very well. However, I would say No, for those who just want to follow the trend and borrow money from others or the bank to invest in land and expect the benefit in the short term. You might lose your money in there for a long time and you also have to pay the interest on your loan.

Let me use the Kandal Stueng district case as an example. After the news about mega airport plan was released, people followed the trend and bought land there. But when will this project start? Even if it will start soon, when will it be completed? Your money will be stuck there for at least 10 years. Are you sure your land will be in a good location? It might be too close or too far from the airport; if so the land price will also not be high. Who will come and buy your land? Therefore, I advise every buyer to think carefully before buying.

What is your advice for choosing the right land to buy?

You should shop around like ladies going fish shopping at the market. They are very picky and they always wander around to seek the freshest fish and cheapest price. Similarly to buying land, it is long-term investment with a lot of money – you can’t just buy without a clear purpose as you cannot just sell your land one day after you have bought it. You have to ask yourself these questions before buying:

-Why are you buying that land? Are you buying it because it is cheap or because you are following others?
-When and how do you plan to sell it?
-How can you find your capital? Savings or a loan?
-What will be the future of the area your land is located in?

There are also many others factors to consider, but you need to find the answers to those questions first before deciding to invest. Then you will make the right choice.

Which part of Phnom Penh do you think is the best place for buying land right now?

If we are talking about the highest land price now, nowhere else except the Duan Penh, 7 Makara, and ChamkarMon District for example Boeng Keng Kong 1 and 2. Sen Sok district is also a good location as many projects are rising there. However, if you are looking for the future investment or something different, the east side of Phnom Penh is where I expect the real estate boom to go. I guess in the next five to ten years, especially when there is a bridge, the land prices will also go higher. It is a good location because we can see a view of the whole of Phnom Penh city from that side, which is good for building condominiums, hotels and serviced apartments in the near future. I expect a big boom there.

Besides Phnom Penh, Sihanoukville, and Siem Reap, where do you think will be the next potential?

I believe the next potential should be Kampot and Kep. The two provinces are likely to attract many developers and investors maybe in the next 10 years. The reason is that the land prices there at the moment are still affordable, which is good for developers to invest. They have beautiful beaches, along with mountains and other sightseeing attractions that can be a good location for hotels, condos, apartments, and others. Another reason is that both provinces attract a lot of Cambodian visitors especially from Phnom Penh. When more people visit, demands for accommodation as well as other facilities will also increase. The upgrade and expansion of National Road No.3 connecting Phnom Penh to Kampot and Kep, which will be completed in the near future, is also the factor.

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